Paying for Watershed Services: Mechanisms, Modes and Compensation Methods in the River Basin, China--Case Study of Jinhua River

Payment for watersheds services (PWS) is an important instrument of watersheds protection and management, which can transform fortune and reduce the inequity of environment and development between the upper reach and lower reach. Both government and market play a key role in the course. Based on case study of Jinhua River, the analysis on the payment mechanism and modes of environmental services and compare compensation methods: WTP, direct payment and opportunity costs of watershed services, opportunity cost of limitation of development rights on paying for watershed services in China, and estimates the value of water resource based on water quality and water quantity. We get the results: (1) Clear original water property and the criteria of water quality and water quantity are primary to watersheds payment; (2) The government still plays an important role in payment for watershed service (3) The largest loss in the upper reaches is from the limitation of development rights, so it is important that the government offers good policy to support and foster green industry and ecological agriculture and build local capacity for healthy watershed. The payment criteria based on water resource value is feasible which is evaluated by water quality and water quantity and (4) Due to the larger OCLDR, so building local development capacity and land planning for healthy watershed is very important.