Optimizing payment for ecosystem services in a drinking water source watershed by quantifying the supply and demand of soil retention service

Payment for ecosystem services (PES) plays a vital role in coordinating the relationship between ecosystem services supply and demand sides in watersheds. The upstream soil retention service brings significant off-site benefits to the downstream stakeholders. To fill gaps in the supply and demand of soil retention services for PES, we developed an approach that combined long-term observation data, hydrological model, and cost-benefit analysis. We applied and demonstrated the approach in a typical drinking water source watershed. By con-structing the relationship between water clarity and the demanded trophic state, we identified the demand for soil retention as the suspended sediment concentration <= 4.4 mg L-1 at a transboundary station. Then, a well-calibrated hydrological model was applied to simulate the downstream sediment reduction under 36 upstream reforestation scenarios. Results showed that cropland reforestation effectively reduced downstream sediment loads by up to 37.8%. However, the efficiency of cropland reforestation for soil retention supply was influenced by its area, slope, and location. The cost-benefit analysis revealed that the feasible sediment reduction was 11,000 t per year, and the market-equilibrium price was 5800 CNY (Chinese Yuan, 7 CNY equaled 1 USD in 2020) per ton. The downstream side should pay 64 million CNY annually for soil retention provided by refor-esting at upstream sloping cropland of 8 degrees or above. This study suggested that the approach was helpful for integrating soil retention service supply and demand at a watershed scale to support PES decision-making.

Automated summary

Payment for ecosystem services (PES) is crucial in managing the relationship between ecosystem services supply and demand in watersheds. This study developed an approach that combines observation data, hydrological modeling, and cost-benefit analysis to address the gaps in the supply and demand of soil retention services for PES. The results showed that cropland reforestation can effectively reduce downstream sediment loads, but its efficiency is influenced by factors such as area, slope, and location.