| The South-to-North Water Transfer Project(S-NWTP) is one of the key national inter-basin water resource joint regulation projects. The Middle Line South-to-North Water Transfer Project (MLS-NWTP) is the indispensable part of the S-NWTP. This project transferred water from Danjiangkou reservoir in Hubei province. The major parts of Shaanxi area in the south of Qinling Mountain are located in the upstream of Danjiangkou reservoir, which included Danjiang River Basin and Hanjiang River Basin. It takes 65.6% of the total control area; and the reservoir annual inflow water takes 70% of the reservoir average inflow. As the main drinking water source of the MLS-NWTP, Shannxi water source area should improve the standard of wastewater discharge standard and the quality of eco-construction and increase the investment of the eco-construction and water environment protection. However, it would aggravate the conflicts between the eco-environment protection and the existence and development right of the local people. According to the principle of "justice", "beneficial owner compensation" and related ecological compensation policies and laws, proper countermeasures should be taken for reasonable compensation of water source area. Ecological compensation of inter-basin water transfer is an important mean in adjusting the interest relationship between ecological protectors and beneficial owners, coordinating the regional development, and promoting social fairness.Taken Shannxi water source area of MLS-NWTP as an example, this paper evaluated the harmonious sustainable development ability in the research area. In calculating the ecological compensation in Shaanxi province, the burden sharing proportion between the intake area and water source area was developed. Ecological compensation mechanism of Shannxi water source area was established and put forward the diversification compensation way in water resource. The main research achievements are as follows:(1) A treelike index system of sustainable development built in Shaanxi water source area. Based on eco-environment, economy and social development, the sustainable development ability in this area was calculated by the coordination degree model. It shows that in the sustainable development system of the research area, the eco-subsystem was weak by coordination degree model. The economy subsystem and society subsystem was weak maladjustment. When compensated to the water resource area, it should emphasize particularly on the aspect of ecological construction of research area and the peasant and local government income improvement.(2) Research approach of ecological compensation in the research area was put forward from the following four methods:the cost of eco-environment construction and management in water source area; the economic enduring capacity of intake areas; water resources value of the water source area; lost value of Pollution-Discharge Right of environmental capacity.(3) The compensation of cost in protection of research area and water conservation involve of the compensation of point pollution management, non-point pollution management and the loss right of develop chance. Using mean concentration method, the non-point sources pollution load taken more than the 70% in the total load. Non-point sources pollution was the major source in water pollution of the research area. However, the compensation of control in non-point source pollution was still weak. Therefore, this paper analyzed the compensation of management in the non-point sources pollution specially.①Using the export coefficient method, the water loss and soil erosion, chemical fertilizer losses, farm population life pollution and unused lands were the major type of non-point sources pollution in the research area;②The main non-point source controlling management cost in water source area from 2006 to 2015 was 54.63×108yuan/a and from 2016 to 2020 was 45.92×108 yuan/a which was calculated by cost accounting method;③The ecological value loss of non-point source pollution in Shannxi water source area is 140×108yuan/a which was calculated by shadow price method;④The non-point source control compensation quantity based on the voluntary negotiation model between non-point source control cost and the ecological value loss caused by the non-point source. The minimum compensation in water source area was,54.63×108yuan/a from 2006 to 2015, and 45.92×108yuan/a from 2016 to 2020.(4) The ecological compensation quantity was calculated by the following models:devotion of ecological and environmental construction and management in water source areas; enduring water resources cost capacity in intake areas; water resources value and the loss value of environmental capacity use right; soil and water conservation eco-compensation quantity of the water source area. The results of the four models was the eco-compensation quantity was 104.09×108yuan/a from 2006 to 2015, and 95.38×108yuan/a from 2016 to 2020.(5) The models for eco-compensation fund sharing were established using single index method, aggregative indicator analysis method and deviation square method respectively. The result showed that the model based on deviation square method was reasonable and objective. The proportion of ecological compensation from the benefits of water source area to the water resource area was 0.80:0.20.(6) The eco-compensation area of Shannxi is 31 counties (city and district) in Baoji, Hanzhong, Ankang, Shangluo and Xi'an of Shaanxi province. The compensation subject is the nation, Beijing, Tianjin, Hebei, Henan, Hubei and Shannxi water source areas. In addition, the compensation object is the local government and people of Shaanxi water source area. Several compensation approaches was put forward for the nation, province and local government. The approach of the national financial compensation as the main subject in Chinese eco-compensation policy was discussed too.
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