Assessment of the Payments for Watershed Services Policy from a Perspective of Ecosystem Services: A Case Study of the Liaohe River Basin, China

Payments for Watershed services (PWSs) have been emerging as a critical tool for environmental governance in watershed, yet their comparative effectiveness across implementation models has remained poorly understood. Based on a comparative analysis of Eco-Compensation (EC) and Payments for Ecosystem Services (PESs) frameworks, examining both theoretical foundations and implementation practices, this study aims to quantitatively assess and compare the effectiveness of two dominant PWSs models—the EC-like model (Phase I: October 2008–April 2017) and the PESs-like model (Phase II: 2017–December 2021). Using the Liaohe River in China as a case study, utilizing ecosystem service value (ESV) as an indicator and employing the corrected unit-value transfer method, we compare the effectiveness of different PWSs models from October 2008 to December 2021. The results reveal the following: (1) Policy Efficiency: The PESs-like model demonstrated significantly greater effectiveness than the EC-like model, with annual average increases in ESV of 3.23 billion CNY (491 million USD) and 1.79 billion CNY (272 million USD). (2) Functional Drivers: Water regulation (45.1% of total ESV growth) and climate regulation (24.3%) were dominant services, with PESs-like interventions enhancing multifunctionality. (3) Stakeholder Impact: In the PESs-like model, the cities implementing inter-county direct payment showed higher growth efficiency than those without it. The operational efficiency of PWSs increases with the number of participating stakeholders, which explains why the PESs-like model demonstrates higher effectiveness than the EC-like model. Our findings offer empirical evidence and actionable policy implications for designing effective PWSs models across global watershed ecosystems.