A DEA-based method of watershed ecological compensation allocation and liability sharing and its application: a case study of the Xin’an River

The watershed ecological compensation mechanism is an effective policy instrument for promoting the protection of the watershed ecological environment and the development of the regional economy in river basin areas. However, the related compensation for quality control investment and liability for water quality damage should be determined carefully. In the present study, based on data envelopment analysis, we firstly established a compensation allocation model with fairness, considering both efficiency and the scale of river basin areas. Secondly, incorporating the opportunity cost method, we establish a total liability model and liability-sharing model to ensure consistency between compensation and liability. We study the Xin’an River basin in Anhui province as an empirical example, showing that She County deserved the highest compensation in both 2018 and 2019, and Xiuning County received the lowest compensation in 2018. Only Jixi County should bear liability in 2018, but in 2019, Tunxi District bears the highest liability and Xiuning County the lowest liability. The compensation allocation and liability sharing results align with the equality principle, and the allocation model is feasible. This paper provides suggestions for compensation allocation and liability sharing for provinces in the watershed ecological compensation mechanism.