Eco-Compensation for Watershed Services in the PRC

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Eco-compensation not only shares characteristics with payments for ecological services, but also encompasses fiscal transfer schemes between provincial governments to improve the apportioning of funding for and clarify responsibilities and tasks on environmental management, especially on ecological service flows that cross administrative and regional boundaries, such as watershed ecological services. Such innovations have been at the core of the government’s ongoing efforts to identify and address the underlying institutional drivers of the People’s Republic of China’s (PRC) water crisis.