Ecological Indica o s 151 (2023) 110334
A ailable online 12 May 2023
1470-160X/© 2023 The Au ho s. Published by Else ie L d. This is an open access a icle unde he CC BY-NC-ND license (h p://c ea i ecommons.o g/licenses/by-
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A Bi-le el op imiza ion app oach o educe he pollu ion bu den o lake
wa e wi h ecological compensa ion
Linhuan He
a
,
b
, Liming Yao
a
,
*
, Pe a Sabe Va bano
b
a
Business School, Sichuan Uni e si y, Chengdu 610065, China
b
Sus ainable P ocess In eg a ion Labo a o y –SPIL, NETME Cen e, Facul y o Mechanical Enginee ing, B no Uni e si y o Technology - VUT B no, Technick´
a 2896/2,
616 69 B no, Czech Republic
ARTICLE INFO
Keywo ds:
Wa e en i onmen al ecosys em
Lake ecological compensa ion
Bi-le el op imiza ion
Equi abili y
Cos -e iciency
ABSTRACT
Lake Ecological Compensa ion (LEC) mechanism is a localized app oach o paymen o ecosys em se ices o
add ess he con lic be ween economic de elopmen and ecological conse a ion. Howe e , how o mo i a e
egional s akeholde s o pa icipa e in wa e quali y p o ec ion is a challenge. Based on he adi ional Coase
Theo em, e ical eco-compensa ion mechanism has been p oposed o sol e pollu ion o lake basin. The quan-
i ica ion o LEC is cha ac e ized by key wa e quali y indica o s (NH
3
-N and COD) in his pape . In eg a ing LEC
mechanism wi h he ecological-economic model, his pape p oposes a bi-le el op imiza ion amewo k o he
conse a ion o he lake wa e en i onmen . Re e ing o Coase’s heo y, he leade ’s goal is o dis ibu e was e
load pe mi s equally o sub- egions while ollowe s aim o minimize en i onmen al cos s. The app op ia e
applica ion o his me hod o Taihu Basin demons a es i s e iciency and p ac icali y. The LEC mechanism wi h
di e en scena ios is analyzed and sugges ions o lake wa e quali y a e made. The esul s show ha : (1)
Conside ing equi able p inciple, he new COD alloca ion scheme has educed he o al amoun o emissions by
17% compa ed o he da a in 2020, and he o al amoun o NH
3
-N has dec eased by 16%. (2) Wi h he coop-
e a ion o lake basin ins i u ions, he LEC mechanism is p o ed o be an e ec i e measu e in p omo ing he
conse a ion o he lake wa e en i onmen . (3) The spillo e e ec o en i onmen al and ecological policies in
lake wa e indica es he need o upg ade indus ial s uc u e. This pape p oposes o p o ide a mo e eliable he
conse a ion o he lake wa e en i onmen pa adigm.
1. In oduc ion
Paymen o Ecosys em Se ices (PES) has been p oposed and
ope a ed as economic incen i es o ecological conse a ion ac oss
di e en egions and coun ies o abou wo decades (Engel e al., 2008;
Ouyang e al., 2016; Zhang e al., 2022; Wunde e al., 2008). Ecological
conse a ion is a gene al beha io a ge ing he na u al en i onmen .
The di e si ica ion o PES p ac ice is an ine i able esul o a ious
en i onmen al and ins i u ional se ings (Zeng e al., 2021). Fo es
Res o a ion P og ams in he wes e n US (Bela enu i e al., 2022), he
Oka ango Ri e Basin in Sou h A ica (Wang and Nuppenau, 2021), and
he Lake E ie Wa e shed (Xu e al., 2018) a e all success ul applica ions
o PES. How he PES mechanism adop ed, comp ehended and imple-
men ed by he Chinese local go e nmen s is no ewo hy o ecological
conse a ion. Fo he localiza ion o PES in o he Chinese ecological
conse a ion, eco-compensa ion is concep ualized as a na ional
en i onmen al p o ec ion policy in China (Feng e al., 2018).
Wa e shed PES (US$24.7 billion in 62 coun ies in 2015) (Salzman
e al., 2018), also known as wa e shed ecological compensa ion, mainly
es ic s he beha io o pollu e s h ough he design o a ewa d and
punishmen mechanism. The ecological compensa ion mechanism, as an
e ec i e en i onmen al policy, ha uses economic ins umen s o co-
o dina e he in e es s o s akeholde s has been he ocus o many
schola s (Conno e al., 2022; Jiang e al., 2019). Howe e , ew o hem
syne gize he ins i u ional s uc u e o lake basins wi h ecological
compensa ion mechanisms. Exis ing s udies ha e paid li le a en ion o
lake ecological compensa ion (LEC) o he conse a ion o he lake
wa e en i onmen , which means speci ic beha io a ge ing wa e
quali y.
Lake basin, as in eg a ed place o accommoda e wa e bodies, plays
i al ecological oles such as lood egula ion and s o age, wa e di e -
sion o i iga ion, d inking wa e sou ces, aquacul u e, and ou ism
* Co esponding au ho .
E-mail add ess: [email p o ec ed] (L. Yao).
Con en s lis s a ailable a ScienceDi ec
Ecological Indica o s
jou nal homepage: www.else ie .com/loca e/ecolind
h ps://doi.o g/10.1016/j.ecolind.2023.110334
Recei ed 15 Ma ch 2023; Recei ed in e ised o m 28 Ap il 2023; Accep ed 4 May 2023
Ecological Indica o s 151 (2023) 110334
2
(Wa son e al., 2016; Woolway e al., 2021). Howe e , he con inuous
de e io a ion o lake ecological en i onmen has become an impedimen
o he sus ainable de elopmen o social economy. The inc easing nu-
ien s in lakes has pu wa e quali y a isk wo ldwide. Va ying deg ees
o wa e eu ophica ion and wa e quali y deg ada ion ha e been
disco e ed in he No h Ame ican G ea Lakes (Riccia di and MacIsaac,
2000), Lake Biwa in Japan (Ma e al., 2022), Lake Bolsena and Lake
Chiusi in cen al I aly (Fische e al., 2016), and Lake E hai in China (Lin
e al., 2021). Acco ding o he Uni ed Na ions’ Sus ainable De elopmen
Goals (SDGs) (Pe ei a and Ma ques, 2021; Wang e al., 2022), clean
wa e o SDGs 6 and 4 is u gen ly needed o he whole wo ld. Based on
wa e quali y moni o ing and combined wi h modelling s udies
(V¨
o ¨
osma y e al., 2010), e iews o global wa e pollu ion indica e
e ec i e measu es need o be aken o con ol he ecosys em pollu ion o
lake wa e s.
LEC mechanism is one o he sensible economic means o wa e
pollu ion con ol and ecological conse a ion (Shen e al. 2021). I seeks
o in e nalize he ex e nali ies ela ed o human beha io s and c ea es
incen i es o sub- egions o ensu e ecological se ice p o ision. To
cla i y ha , he dominan pape s o PES esea ches a e summa ized in
Table 1.
The quan i ica ion o compensa ion is a key link in he imple-
men a ion o ecological compensa ion o wa e quali y pollu ion. Nash
equilib ium model (Nimubona and Pe eau), op imal model (Zhao e al.,
2013), S ackelbe g game (Fe nandez, 2013), and he e olu iona y game
(Gao e al., 2019) a e ypical me hodologies used in p e ious esea ch.
Wa e quali y equi emen s o he lake and discha ge s anda ds a e he
aim o pollu ion planning and he key indica o s o decision-making.
To he bes o he au ho s’ knowledge, exis ing li e a u e lacks
comp ehensi e s udies ha combine ma hema ical models o lake
wa e en i onmen al ecology and was e load alloca ion o quan i y he
lake ecological compensa ion mechanism. Wha ’s mo e, in he ins i u-
ional s uc u e sys em, wo le els o decision-make s a e included
which a e he Lake En i onmen Commi ee and sub- egional au ho -
i ies. The Lake En i onmen Commi ee is he p io i y decision-make
ha makes i necessa y o alloca e he was e load pe mi s e ec i ely.
The sub- egional au ho i ies, as he lowe -le el decision make s, y o
minimize he en i onmen al cos s unde he LEC mechanism.
This pape makes signi ican con ibu ions in h ee aspec s. Fi s ly, i
e ines an analy ical amewo k o quan i y lake ecological compensa-
ion, which helps o esol e he con lic be ween economic de elopmen
and he conse a ion o he lake wa e en i onmen . Secondly, a bi-le el
op imiza ion model is p oposed based on he Coase Theo em, which
enables equi able was e load alloca ion and easonable annual planning
o wa e quali y con ol. Thi dly, a ious scena ios o join go e nance
o he lake wa e ecosys em in Taihu Basin a e discussed, p o iding
suppo o i s sus ainable de elopmen .
2. Key p oblem s a emen
The o e -exploi a ion o wa e esou ces in lakes has agg a a ed he
de e io a ion o wa e quali y. The e o e, how o coo dina e egional
economic de elopmen wi h wa e en i onmen al p o ec ion has
a ac ed widesp ead a en ion. In his pape , wo pe spec i es a e
conside ed which a e was e load amoun con ol and wa e pollu ion
concen a ion con ol based on he go e nance sys em. Each pe spec i e
has mul iple conside a ions. This esea ch is conduc ed o shed ligh on
he s a egy o main aining sus ainable de elopmen o he lake wa e
ecosys em.
2.1. Mul i-s akeholde go e nance sys em
The o ma ion and e olu ion o lakes a e no only a ec ed by he
changes o na u al ac o s in he basin bu also in luenced by human
ac i i ies. Hence, lakes p esen di e en egional e olu iona y cha ac-
e is ics and ecological p oblems.
Coase Theo em (Hahn, 2013), p oposed by a Nobel P ize winne , is
well-known in ecological conse a ion. Based on Coase Theo em, en i-
onmen al ex e nali ies a e u ned in o p ope y igh p oblems, as i
uses a ma ke mechanism o maximize he en i onmen al and economic
bene i s based on clea p ope y igh s. Coase’s heo y also suppo s he
quan i ica ion and equi able alloca ion o was e load pe mi s. The con-
se a ion o he lake wa e en i onmen is mainly mani es ed mainly in
h ee aspec s.
1. The apid economic de elopmen o he lake a eas, as he ocus o
local go e nmen s, will ine i ably cause wa e quali y deg ada ion,
o he pollu an -holding capaci y o lakes is limi ed. The equi able
alloca ion o limi ed was e load pe mi s (WLP) is a easible me hod
o he conse a ion o he lake wa e en i onmen .
2. The lack o an e ec i e beha io al egula o y mechanism a ec s he
sus ainable de elopmen o lakes. I he local go e nmen conduc s
li le in e en ion in local sewage discha ge, he pollu ion o lakes
will be disas ous.
3. The sus ainabili y o he wa e ecosys em in he basin needs mul i-
index and mul i-dimensional measu es ins ead o simple e alua-
ion. Mul i-sec o al in ol emen , co e ing Lake En i onmen Com-
mi ee and sub- egional au ho i ies, is equally i al.
Fo he ins i u ional s uc u e o lake managemen , he Lake En i-
onmen Commi ee wo ks as he uppe -le el decision make (Leade )
and sub- egional au ho i ies o lakes a e he lowe -le el decision make s
(Followe s). As he supe iso o he o e all wa e quali y in he lake
basin, he Lake En i onmen Commi ee ocuses on how o a ionally
alloca e he o al amoun o WLP as i is limi ed. Fu he mo e, he Lake
En i onmen Commi ee o mula es he LEC mechanism and egula es
egional beha io s by moni o ing sec ion da a. Regional go e nmen s
mainly wo k on he annual a e age concen a ion o pollu an s wi hin
Table 1
P ac ice and applica ion o paymen o ecosys em se ices.
A icles Resea ch objec Key p oblem and inno a ion Eco-compensa ion
Mechanism
Me hods
Nimubona and
pe eau, 2022
We land To analyze he economic e iciency be ween he bene icia ies and
p o ide s hough no el paymen schemes.
√ A Nash equilib ium model wi h
h ee ypes o agen s
Zhao e al., 2013 Lake To compu e he cos o minimized ans e ax a e along wi h he
educ ion quan i ies o indi idual egions.
A bi-le el p og amming
amewo k
Fe nandez, 2009;
2013
T ansna ional
i e
To help s akeholde s bea pollu ion aba emen cos s and sha e wa e
moni o ing esponsibili y.
A S ackelbe g game and Nash
Equilib ium
Gao e al., 2019 T ansbounda y
i e
To explo e how ecological bene i s a e dis ibu ed be ween di e en
go e nmen s.
√ An e olu iona y game o mul i-
go e nmen s
Lu e al., 2020 T ansbounda y
i e
To build an econome ic model o economic loss and calcula e he
amoun o compensa ion o economic loss due o wa e pollu ion.
An econome ic model o
calcula e he economic loss
Smi h e al., 2019 Land To design a land paymen o ecosys em se ices mechanism and
examine spa ial coo dina ion on he demand side o he ma ke .
√ Spa ial simula ion modelling
L. He e al.
Ecological Indica o s 151 (2023) 110334
3
he mechanism. The decision a iables ep esen he ac ual discha ge
amoun in he egion om he leade pa and he annual a e age wa e
quali y concen a ion o he moni o ing sec ion om he lowe pa . The
goal is o ind he balance be ween economic bene i s and he sus ain-
abili y o he wa e ecosys em.
2.2. S uc u ing incen i e mechanism
A g owing amoun o esea ch sugges s ha using he LEC mecha-
nism as economic incen i es o main ain wa e sus ainabili y is a mo e
di ec app oach o achie ing he goal (Guan e al., 2021; Li e al., 2022).
Howe e , he exis ing quan i a i e analysis o lake eco-compensa ion is
no su icien ly sys ema ic and is somewha de ec i e. To ill hese gaps,
we explo e he es ablishmen o LEC mechanism based on wa e quali y
and he quan i y o discha ged con aminan s. A adeo occu s when
was ewa e emission inc eases because o economy p oduc ion and
ecology alue educes acco dingly . Howe e , a syne gy wo ks when all
sub- egions ake he sus ainabili y o lake wa e en i onmen as hei
own mission.
The LEC mechanism is an embodimen o PES which e e s o ewa d
and punishmen . Beha io s ha p o ec he wa e en i onmen a e
ewa ded, while beha io s ha cause damages a e punished (Wu e al.
2018). In essence, he LEC is an en i onmen al and economic incen i e
policy and i akes he o m o iscal unding be ween he Lake En i-
onmen Commi ee and indi idual sub- egions. Fu he mo e, as he e is
no s ic di ision be ween ups eam and downs eam in he lake, how o
judge he impac o sewage among di e en egions is also ega ded as a
ough assignmen .
The con ol o pollu an concen a ion is he main indica o o he
LEC mechanism. Th ough he da a analysis o he moni o ing sec ion,
he ewa d and punishmen o sub- egions can be judged. The lake eco-
compensa ion mechanism is exp essed as he ollowing unc ion g(yij):
g(yij) = {−
α
pi,0<pi⩽1
βpi,pi>1
α
,β>0(1)
Pi=
μ
0∑
n
j=1
kj
yij
Cijo (2)
whe e p is he compensa ion index o he moni o ing sec ion, i is he sub-
egion loca ed a he same lake, and j p esen s di e en con aminan s.
μ
0
is he lake wa e quali y s abili y coe icien which mainly conside s he
in luence o na u al condi ions such as ain all and uno ；kj is he
indica o weigh coe icien ；yij is he annual mean concen a ion alue
o he indica o ；Cij0 is he basic limi o he indica o , whe e he lowe
limi o he III class o wa e quali y is used as he s anda d. The decision
amewo k o lake wa e en i onmen managemen is illus a ed in
Fig. 1.
Fig. 1. Decision amewo k o lake wa e en i onmen managemen in his pape .
L. He e al.
Ecological Indica o s 151 (2023) 110334
4
3. Me hod
A bi-le el op imiza ion model has been de eloped o he lake eco-
compensa ion mechanism o he wa e shed by analyzing he s uc u e
o he lake wa e en i onmen managemen . The o mula ion p ocess
placed a s ong emphasis on he model’s easibili y and p ac icali y,
aking in o accoun he eal-wo ld con ex o he p oblem.
3.1. F amewo k o he model
3.1.1. Assump ion
The comple e he conse a ion o he lake wa e en i onmen e-
qui es he Lake En i onmen Commi ee o alloca e was e load pe mi s
equally o sub- egional au ho i ies. On he o he hand, sub- egional
au ho i ies should con ol he a e age annual concen a ion o wa e
con aminan s wi hin he LEC egula ion amewo k. The implemen a-
ion o he LEC mechanism has s imula ed he p o ec ion o wa e
quali y in he egion. Be o e es ablishing he basic model, ou hy-
po heses a e made as ollows.
Assump ion 1.The e is no ob ious ups eam o downs eam ela ionship
in he lake. Regional au ho i ies sha e equal powe in lake managemen , and
he Lake En i onmen Commi ee has he p io i y igh o supe ise all o
hem.
Assump ion 2.Each sub- egion o he lake is willing o implemen he lake
ecological compensa ion mechanism.
Assump ion 3.The planned in e al is one yea . The concen a ion o
wa e con aminan as an indica o is based on he a e age alue o he
moni o ing sec ion in sub- egions.
Assump ion 4.Regional au ho i ies a e esponsible o wa e pollu ion
aba emen cos s and ake cos minimiza ion as he objec i e unc ion o de-
cision-making.
3.1.2. Uppe -le el op imiza ion model
Equi able alloca ion o WLP is conside ed o be he main goal o he
Lake En i onmen Commi ee based on he Coase Theo em. As he
leade decision-make , Lake En i onmen Commi ee concen a es on
a ionally alloca ing he annual amoun o he sewage o sub- egion.
Gini (Dal on, 1920) p oposed he Gini coe icien o measu e income
inequali y, and i also has been used o measu e land inequali y and
wa e alloca ion inequali y in ecen yea s. The h eshold o he Gini
coe icien is 0 o 1, and he lowe he alue, he mo e equi y i is.
Speci ically, he Gini coe icien can be cons uc ed o was e load
alloca ion in he wa e shed sys em (Hou e al., 2021). Equi y is speci -
ically exp essed as he di e ence o in was e load pe mi s pe uni o
economic bene i wi hin sub- egions. This pape p oposes ha he
smalle he di e ence, he mo e easonable i is. The speci ic model is
exp essed in e ms o he Gini coe icien . The i s op imiza ion objec-
i e can be w i en as:
MinG =∑
n
j=1
1
2m∑m
i=1
xij
EBi∑
m
l=1∑
m
h=1
xlj
EBl
−xhj
EBh
(3)
whe e xij is he decision a iable, which means he amoun o WLP
alloca ed o suba ea i o con aminan j. m is he egion ela ed o he
same lake. EB
i
is he annual a e age o economic bene i s as an indica o
o egional economic de elopmen . The cons ain s a e o mula ed as
ollows.
(1) Limi ed was ewa e load capaci y cons ain . The o al
en i onmen al ca ying capaci y o he whole lake basin is limi ed. Tj is
he o al amoun o WLP ha can be alloca ed by he Lake En i onmen
Commi ee unde he condi ion o ensu ing he sus ainable de elopmen
o he wa e shed.
∑
m
i=1
xij⩽Tj(4)
(2) Sa is ac ion o basic de elopmen cons ain . When making
decisions, he uppe le el needs o conside ha he ac ual emission
igh s o he egion a e g ea e han he ac ual amoun o pollu ion
emi ed. The ac ual discha ge o egional wa e pollu an s should be
lowe han he alloca ed amoun . ϕi p esen s he educ ion a e o
con aminan . Qi ep esen s he a e age annual was ewa e low. yij is he
annual concen a ion o he moni o ing sec ion con olled by he sub-
egion au ho i ies unde he LEC mechanism.
∑
n
i=1
h1+ϕi)xij⩾∑
n
i=1
Qiyij (5)
3.1.3. Lowe -le el op imiza ion model
Sub- egional au ho i ies implemen he ac ic o achie e i s op imal
a e age annual concen a ion a he lowes en i onmen al cos unde
he lake eco-compensa ion mechanism. Fo lake sub- egions, he To al
En i onmen al Cos (TEC) con ains wo pa s, co e ing pollu ion
educ ion cos and eco-compensa ion ee.
MinTECi=∑
n
j=1
η
ijϕixij +g(yij)(6)
whe e
η
ij is he uni educ ion cos o con aminan . g(yij)is he exp es-
sion o he lake eco-compensa ion mechanism which is shown as Eq.(1).
yij is he decision a iable. The ecological compensa ion alue can be
posi i e o nega i e. A posi i e numbe ep esen s an inc ease in he
o al en i onmen al cos o penal ies due o he high concen a ion o
wa e discha ged. Nega i e alue is he opposi e. The cons ain s a e
o mula ed as ollows.
(1) Limi ed was ewa e load capaci y cons ain . Fo a sub- egion
o he lake, ac ual annual discha ge amoun should no exceed he
allowable emission pe mi s. The educ ion o con aminan s can inc ease
he o al amoun o emission pollu ion. Qi ep esen s he a e age annual
was ewa e low.
Qiyij⩽h1+ϕi)xij (7)
(2) Sa is ac ion o minimum equi emen cons ain . As pollu-
ion emission and economic de elopmen a e closely ela ed in some
way. The igh o pollu ion emission can be seen as he igh o economic
de elopmen . In o de o ensu e he basic de elopmen o economy, he
o al amoun o pollu an s has a minimum alue.
Qiyij⩾Mmin
ij (8)
whe e Mmin
ij is he basic emission equi emen o egional economic
de elopmen .
(3) Wa e quali y index cons ain . Pollu an concen a ion is a
signi ican indica o in lake wa e en i onmen managemen . The main
unc ion o he wa e quali y moni o ing sec ion o he lake is o de ec
he pollu ion concen a ion.
yij⩽Cmax
j0(9)
whe e Cmax
j0 is he uppe limi o he concen a ion s anda d.
3.2. Global model
In e ac i e decision-making managemen be ween Lake En i on-
men Commi ee and mul iple sub- egional au ho i ies in he lake is
p oposed in ou model. Hie a chical decision p ocess is conside ed as a
S ackelbe g game model (Fische i e al., 2017). The objec i e unc ion
o he uppe le el is o maximize he equi y o alloca ion, and he lowe
le el is mainly o minimize he en i onmen al cos s.
L. He e al.
Ecological Indica o s 151 (2023) 110334
5
MinG =∑
n
j=1
1
2m∑m
i=1
xij
EBi∑
m
l=1∑
m
h=1
xlj
EBl
−xhj
EBh
s.
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⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
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⎪
⎪
⎪
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⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎩
∑
m
i=1
xij⩽Tj
∑
n
i=1
h1+ϕi)xij⩾∑
n
i=1
Qiyij
xij⩾0
MinTECi=∑
n
j=1
η
ijϕixij +g(yij)
s.
⎧
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎨
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎪
⎩
g(yij) = ⎧
⎨
⎩
−
α
pi,0<pi⩽1
βpi,pi>1
Pi=
μ
0∑
n
j=1
kj
yij
Cij0
Qiyij⩽h1+ϕi)xij
Qiyij⩾Mmin
ij
yij⩽Cmax
j0
yij⩾0
μ
0>0
α
,β>0
(10)
4. Case s udy and esul s
4.1. S udy a ea
Taihu Basin, spanning Jiangsu, Zhejiang and Shanghai, co e s a o al
a ea o 31,800 km
2
. As a majo pa o he Yang ze Ri e Del a, he a ea
wi nesses a la ge popula ion densi y, de eloped indus ial and ag icul-
u al p oduc ion, as -g owing GDP and high pe capi a income. In his
case, Taihu Basin includes 4 ci ies in Jiangsu P o ince (Suzhou, Wuxi,
Changzhou and Zhenjiang), 3 ci ies in Zhejiang P o ince (Huzhou,
Jiaxing and Hangzhou), and 3 owns in Shanghai (Lian ang, Jinze and
Zhujiajiao). Fig. 2 displays he loca ion o Taihu Basin and demons a es
he poo wa e quali y in he basin. Acco ding o he change in he
nu ien index in he Taihu Lake Heal h S a us Repo (2012–2018), he
wa e body o Taihu Lake is in a mode a ely eu ophic s a e. The e o e,
e ec i e measu es o he conse a ion o he lake wa e en i onmen
a e necessa y o he sus ainable de elopmen o he lake.
4.2. Da a collec ion
The da a collec ed in his case is om he O e all Plan o Comp e-
hensi e Wa e En i onmen Managemen in Taihu Basin in 2013 and
2022 om he Na ional Bu eau o S a is ics in China and he Depa men
o Ecology and En i onmen o he h ee a eas. Acco ding o he la es
documen , he main pollu ion indica o s o he basin a e COD and NH
3
-
N. Basic da a o Taihu Basin in 2020 a e shown in Table 2. As shown in
he able, Jiangsu has he la ges a ea in he basin while Shanghai has
he smalles .
I can be seen om Table 2 ha Jiangsu P o ince in Taihu Basin has
he wides a ea and he la ges amoun o sewage. Only a small pa o
Shanghai is loca ed in he Taihu Basin, so he index alue is he smalles
acco dingly. As i s pollu ion load in o he lake is ela i ely la ge, Jiangsu
is conside ed as a key a ea o he p e en ion and con ol o pollu ion
loads.
Fo mo e de ailed da a, o calcula e he op imal model, he ini ial
assignmen based on his o ical da a is summa ized in Table 3. In e ms
o loca ion, Jiangsu and Zhejiang ha e mo e es ua ies ela ed o he lake,
while Shanghai is close o he lowe each o Taihu. The e o e, Shanghai
poses a ela i ely smalle impac on he lake. In he calcula ion alue o
he P
i
, 15 mg/L was used as he basic limi o COD and 0.5 mg/L o
NH
3
-N.
4.3. Op imal esul s
A e assigning he pa ame e alues, he so wa e is u ilized o
calcula e he op imiza ion model in his sec ion. In addi ion, he cha -
ac e is ics o egional decision-making beha io in di e en scena ios
a e also discussed. Fu he mo e, i p o ides da a suppo o he p o-
ec ion and sus ainable de elopmen o he lake ecological en i onmen .
Acco ding o he abo e model cons uc ion, his is a linea bi-le el
op imiza ion p oblem ega ded as NP-ha d. Bi-le el p og amming is
mo i a ed by S ackelbe g o sol e he unbalanced economic ma ke
p oblems (Colson e al. 2005). Gene ally, Ka ush-Kuhn-Tucke (KKT)
(Lu e al., 2006; Shi e al., 2005; Sinha and Sinha, 2002) ans o ma ion
app oach has been applied o mul i-le el decen alized op imiza ion
model.
This pape ega ds P
i
>1 as he base scena io. Th ee egions a e
chosen as he paye s o ecological compensa ion o economic de el-
opmen . En i onmen Commi ee o Taihu Lake as he leade pu sues
he equi able alloca ion o WLP, and ini ial esul s a e shown in Fig. 3.
The alue o he uppe objec i e unc ion is 0.58. Zhejiang has been
alloca ed he la ges amoun , Jiangsu he second and Shanghai he leas .
Al hough Jiangsu has a la ge a ea han Zhejiang, he decision make
gi es Zhejiang mo e WLP. Fo he eason, economic de elopmen is one
ac o , and on he o he hand, Zhejiang is willing o pay mo e
compensa ion. The annual a e age pollu an concen a ion o moni-
o ing poin s is used as he main indica o o ewa d and punishmen ,
and is supe ised by he uppe le el.
The new COD alloca ion scheme has educed he o al amoun o
emissions by 17% compa ed o he 2020 da a, and he o al amoun o
NH
3
-N has dec eased by 16%. The ed moni o ing poin s in Fig. 3 a e no
ac ual moni o ing poin s, bu only ep esen he phenomenon o wa e
quali y de ec ion, which is no mal in eali y. The e a e many ac ual
moni o ing poin s o na ional and p o incial le els. Wi h hese wa e
quali y da a, manage s can p e en excessi e wa e pollu ion, and local
go e nmen can adjus policy di ec i es h ough he concen a ion da a.
The ini ial calcula ion esul s o lowe le el a e shown in Table 4,
which con ain he annual a e age concen a ion o pollu an s, o al
en i onmen al cos s and ecological compensa ion alues. The eco-
compensa ion alues a e all posi i e, meaning ha all h ee egions
ha e op ed o pay pollu ion ines. Zhejiang has he la ges ecological
compensa ion alue. I is demons a ed ha in his case, in o de o
de elop he economy, Zhejiang would like o pay o wa e pollu ion.
5. Discussion
5.1. Scena io analysis
Unde he ecological compensa ion mechanism, each egion has wo
L. He e al.

Ecological Indica o s 151 (2023) 110334
6
op ions: ei he be penalized o a la ge amoun o pollu an discha ge o
be ewa ded o educing emissions. As he di e en choices o sub-
egions will a ec he alloca ion made by uppe -le el decision-make s.
The Taihu Basin is di ided in o h ee egions, esul ing in a o al o eigh
scena ios. Fig. 4 p esen s a scena io analysis, which mainly e lec s he
egional go e nmen s’ p io i ies ega ding en i onmen al p o ec ion.
P
i
ep esen s he willingness o local go e nmen o pa icipa e in
en i onmen al p o ec ion. P
i
>1 means ha he egion chooses o pay
he compensa ion alue, he eby expanding he amoun o sewage. 0 <
P
i
≤1 means o be ewa ded wi h ecological compensa ion o con-
olling pollu an discha ge. P1 ep esen s Jiangsu, P2 p esen s Zhejiang
and P3 p esen s Shanghai. As can be seen in Fig. 4, h ee egions choose
o be punished in scena io 1. Jiangsu chooses o be ewa ded and Zhe-
jiang and Shanghai choose o be punished in scena io 2. Zhejiang
chooses o be ewa ded and Jiangsu and Shanghai choose o be punished
in scena io 3. Shanghai chooses o be ewa ded and Jiangsu and Zhe-
jiang choose o be punished in scena io 4. Shanghai chooses o be
punished and Jiangsu and Zhejiang chooses o be ewa ded in scena io
5. Zhejiang choose o be punished and Jiangsu and Shanghai chooses o
be ewa ded in scena io 6. Jiangsu chooses o be punished and Zhejiang
and Shanghai chooses o be ewa ded in scena io 7. Th ee egions
choose o be ewa ded in scena io 8.
As can be seen in Fig. 4, when a egion chooses o ecei e ecological
compensa ion incen i es, he annual a e age concen a ion o pollu -
an s will dec ease. The main objec i e o he lowe le el is o minimize
he en i onmen al cos s ha a e a ec ed by he go e nance cos and
ecological compensa ion alue. The index ha a ec s LEC alue is he
concen a ion o pollu an s. Regional go e nmen s can con ol he o al
en i onmen al cos s h ough he annual concen a ion o pollu an s.
As shown in Fig. 3, he e a e many wa e quali y moni o ing poin s,
and his pape uses he annual a e age concen a ion o wa e quali y
moni o ing poin s o ep esen he alue. Acco ding o Eq. (1), di e en
concen a ion alues will a ec he ecological compensa ion alue. The
Table 2
Basic da a o Taihu Basin in 2020.
Sub egion A eas
loca ed a
he basin
A ea da a GDP
(10
9
yuan)
Main wa e quali y
indica o s ( )
Basin
a ea
(km
2
)
P opo ion COD NH
3
-N
Jiangsu 4 ci ies 16,854 53.0% 4366 327,690 22,000
Zhejiang 3 ci ies 10,621 33.4% 2482 156,897 11,894
Shanghai 3 owns 4325 13.6% 277 5257 538
Taihu
Basin
— 31,800 100% 7125 489,844 34,432
Fig. 2. Loca ion map and wa e quali y si ua ion o Taihu Basin.
L. He e al.
Ecological Indica o s 151 (2023) 110334
7
op imal concen a ion is in scena io 8, whe e each egion chooses o
con ol wa e pollu ion discha ge, and hus ecei es a ewa d.
As can be seen in Fig. 4, he willingness o local go e nmen s o
pa icipa e in wa e ecological en i onmen p o ec ion will di ec ly
a ec he local wa e quali y concen a ion. When local go e nmen s
a e willing o make e o s o p o ec wa e quali y, he concen a ion o
pollu an s will be lowe . Economic incen i e policies ha e a ce ain
deg ee o in luence on ecological and en i onmen al p o ec ion, bu he
a i ude o local go e nmen s is also e y impo an . On he one hand,
local go e nmen s should ollow he cen al en i onmen al policy. On
he o he hand, i should adjus he en i onmen al p o ec ion s a egy
acco ding o local eali ies.
5.2. LEC sensi i i y analysis
How do changes o he ewa d and punishmen se ings o he LEC
mechanism impac he concen a ions o pollu an s? The es ablishmen
and implemen a ion o a c edible scien i ic LEC mechanism has become
an e ec i e go e nance measu e o coo dina e he ela ionship be ween
p o i and loss wi hin a i e basin, and also an impo an gua an ee o
p omo e equi able de elopmen among egions. This pa discusses he
sensi i i y o LEC in eigh scena ios om 1 o 8. Posi i e numbe s o eo-
compensa ion mean being punished, and nega i e numbe s mean being
ewa ded.
En i onmen al policy is an impo an measu e o p omo e he sus-
ainable and coo dina ed de elopmen o bo h he economy and he
en i onmen . The en i onmen al policy could be di ided in o h ee
ypes: command-con ol en i onmen al policy, ma ke -based en i on-
men al policy and public pa icipa ion en i onmen al policy. En i on-
men al policy is mainly h ough he design o en i onmen al
mechanisms o educe pollu ion emissions. Ma ke -based en i onmen al
policy is ega ded as an incen i e-based egula ion app oach which e-
lies on ma ke incen i es o educe pollu ion and minimize pollu ion
con ol cos s.
Acco ding o Fig. 5, when he punishmen is inc eased, he concen-
a ion will dec ease. The maximum punishmen o LEC can each
180.90 million yuan and he maximum ewa d can each 89.4 million
yuan. High paymen cos s d i e egions o con ol he concen a ion o
pollu an s. Fo Jiangsu, he LEC alues o scena ios 2, 5, 6, and 8 a e
posi i e, which means ha Jiangsu chose o pay he penal y ee. In
scena ios 1, 3, 4, and 7, Jiangsu chose o be ewa ded. Zhejiang is
punished in scena ios 1, 2, 4, and 6, and ewa ded in scena ios 3, 5, 7,
and 8. Shanghai chose o be punished in scena ios 1, 2, 3, and 5, and
ewa ded in scena ios 4, 6, 7, and 8. Di e en egions ha e di e en
sensi i i ies o en i onmen al policies. Jiangsu is he mos sensi i e one
o policies, indica ing ha i s egional de elopmen is closely ela ed o
policies. Shanghai is less a ec ed by policies due o i s smalle a ea.
Table 3
Ini ial assignmen o main pa ame e s o model calcula ion.
Sub egion Quan i y o was ewa e (Qi, 10
6
m
3
) Reduc ion a e
(ϕi,%)
Demand limi (Mij,
)
Adjus men coe icien (
μ
0) Concen a ion uppe limi
(Cmax
j0, mg/L)
Compensa ion
coe icien
(yuan)
COD NH
3
-N COD NH
3
-N
α
β
Jiangsu 3120 85 158,978 16,800 0.75 30 1.5 10
6
10
7
Zhejiang 1575 80 139,259 8490 0.8 30 1.5 10
6
10
7
Shanghai 840 70 5157 416 0.85 30 1.5 10
6
10
7
Fig. 3. The calcula ion esul s o uppe le el a ini ial pa ame e alue.
Table 4
The ini ial esul s o lowe decision a iables and objec i e unc ion.
Sub egion Decision
a iables o
he lowe
le el (mg/L)
Objec i e unc ion alue
o he lowe le el
(TECi,10
8
yuan)
Lake ecological
compensa ion alue (g
(y), 10
8
yuan)
Yi1 Yi2
Jiangsu 12.82 0.85 2.3 3.4
Zhejiang 16.93 0.95 2.8 4.2
Shanghai 9.52 0.74 1.4 2.7
L. He e al.
Ecological Indica o s 151 (2023) 110334
8
Fig. 4. Op imal concen a ion o COD and NH
3
-N unde eigh scena ios.
L. He e al.
Ecological Indica o s 151 (2023) 110334
9
F om he esul s o he en i onmen al Gini coe icien in Fig. 5, i can be
ound ha local beha io will a ec he decision o uppe -le el decision-
make s. When all h ee egions choose o p o ec he en i onmen , he
Gini coe icien is a i s lowes a 0.46, indica ing ha he uppe -le el
decision-make s a e making he mos equi able alloca ion.
5.3. Policy ecommenda ions
Th ee policies o wa e quali y managemen in he Taihu Basin a e
p oposed om he pe spec i es o s akeholde s, incen i e mechanism,
and ex ensibili y, based on he compu a ional esul s and analysis p e-
sen ed abo e.
5.3.1. In e ac i e hie a chical ins i u ional s uc u e is equi ed
F om he pe spec i e o pa icipa ing s akeholde s, he in e ac i e
communica ion be ween di e en le els is o g ea help o wa e
en i onmen managemen wi hin he basin. Collabo a i e go e nance
o ansbounda y wa e sheds e e s o he o ma ion o a join go e -
nance mechanism o ansbounda y en i onmen al pollu ion manage-
men in acco dance wi h he idea o di ision o labo , cos sha ing, and
bene i sha ing. I highligh s he join p o ec ion o he ecological
en i onmen in Taihu Basin. The go e nance o Taihu Basin equi es no
only he managemen commi ee om he uppe le el, bu also he
ac i e pa icipa ion o local go e nmen s om he lowe le el. The
uppe -le el go e nmen needs o decide he e ec i e alloca ion o WLP
acco ding o he o e all si ua ion o he wa e shed and local beha io s.
Meanwhile, Fig. 5 illus a es ha local go e nmen s need o adjus hei
de elopmen s a egies acco ding o he uppe policies. As shown in
Fig. 1, he coupling managemen be ween mul iple subjec s makes he
go e nance o he en i e wa e shed e en mo e e ec i e.
5.3.2. LEC mechanism is an e ec i e economic incen i e policy
F om he pe spec i e o incen i e mechanism, eco-compensa ion o
lake can e ec i ely mo i a e egional au ho i ies o con ol pollu ion
emissions, and i he punishmen is inc eased, he e ec will be mo e
ob ious as demons a ed in Fig. 4 and Fig. 5. LEC is an economic
incen i e means o e ec i ely balance he ela ionship be ween
wa e shed economic de elopmen and wa e quali y p o ec ion. The
es ablishmen and implemen a ion o a scien i ic and easonable
ecological compensa ion mechanism has become an e ec i e go e -
nance measu e o coo dina e he ela ionship be ween p o i and loss
wi hin lake basins. Based on he abo e analysis, a sound basin LEC
mechanism should co e he ollowing basic con en s: basin manage-
men mechanism, compensa ion s anda ds, compensa ion mode, and
compensa ion subjec and objec . These in e ela ed con en s wo k
oge he o o m he amewo k o LEC mechanism wi h an aim o
achie e he goals o ecological g een de elopmen , coo dina ed eco-
nomic g ow h, and common social p og ess in he lake basin.
5.3.3. Spillo e e ec o lake en i onmen al conse a ion policy dese es
a en ion
F om he pe spec i e o ex ensibili y, he spillo e e ec o lake
wa e en i onmen al policy dese es a en ion (B¨
o ne e al., 2017). The
spillo e e ec o lake en i onmen al policy means ha when he go -
e nmen implemen s an en i onmen managemen policy o he lake, i
will no only p omp he adjus men o he emission o he o al pollu ion
as expec ed, bu also has an impac on local indus ial ins i u ions (Feng
e al., 2021). The adjus men o pollu an amoun s o ces he ans-
o ma ion o indus ial s uc u e. Taihu Basin, loca ed in he Yang ze
Ri e Del a as shown in Fig. 2, is one o he egions wi h he mos ac i e
economic de elopmen , he highes deg ee o openness and he s on-
ges inno a ion capabili y in China. The go e nance o Taihu Basin
wa e en i onmen will ine i ably p omo e he change o indus ial
s uc u e in he Yang ze Ri e Del a. Al hough his pape does no
analyze he beha io s o en e p ises, he managemen o he lake en i-
onmen canno be sepa a ed om he pa icipa ion o local en e p ises.
The upg ada ion o indus ial s uc u e is su ely conduci e o i s
en i onmen - iendly de elopmen .
6. Conclusion and u u e wo ks
An analy ical amewo k is e ined o localize he PES o add ess he
con lic be ween economy and he conse a ion o he lake wa e
en i onmen . Acco ding o Coase Theo em, a bi-le el op imal model is
Fig. 5. The alue o LEC and Gini coe icien unde di e en scena ios.
L. He e al.