The Ecological Compensation Mechanism in a Cross-Regional Water Diversion Project Using Evolutionary Game Theory: The Case of the Hanjiang River Basin, China

Round 1

Reviewer 1 Report

The manuscript entitled "Research on the Ecological Compensation Mechanism of a Cross-Regional Water Diversion Project Based on Evolutionary Game Theory - Taking the Hanjiang River Basin as a Case" provides an interesting view of the challenges imposed by the major cross-regional water diversion project, SNWDP. To contribute to the realization of a consolidated market-oriented water allocation approach, the Evolutionary Game Theory is applied as a means to reach consensus among the main stakeholders, upstream and downstream regional, and central governments. In the simplified approach, using a limited number of parameters, the mechanism of reaching a consensus on the monetary values of ecological compensations is exemplified. The rationale could serve as a decision support tool, in the far more complex process of Integrated Water Resources Management Process. The paper is well designed and of interest to a wide range of stakeholders in water and river basin management. The introduction summarizes recent research related to the topic. The utilized methodologies are appropriate. The results and the conclusions drawn appear solid.

 

I recommend that the manuscript entitled " Research on the Ecological Compensation Mechanism of a Cross-Regional Water Diversion Project Based on Evolutionary Game Theory - Taking the Hanjiang River Basin as a Case" to be accepted after minor revision.

Minor revision

Please consider that the values expressed in yuan should also be expressed in euros or dollars

 

 

 

Author Response

Dear Reviewers:

Thank you for your comments concerning our manuscript entitled "Research on the Ecological Compensation Mechanism of a Cross-Regional Water Diversion Project Based on Evolutionary Game Theory - Taking the Hanjiang River Basin as a Case". Those comments are all valuable and very helpful for revising and improving our manuscript, as well as the important guiding significance to our research. We have carefully evaluated your critical comments and thoughtful suggestions, responded to these suggestions point-by-point, and revised the manuscript accordingly. Revised portion are marked in red in the manuscript, all page numbers refer to the revised manuscript file with tracked changes. The main corrections in the manuscript and the responds to comments are as flowing:

 

Please consider that the values expressed in yuan should also be expressed in euros or dollars.

Response:

We have labeled all the financial numbers in the manuscript with the USD version and have labeled the exchange rates at the time of conversion in the appropriate places. Revised portion are marked in red in the manuscript, and the modified content is on lines 580—586, 591, 636—650, and 742—745.

Reviewer 2 Report

This manuscript presents an investigation on the mechanism of ecological compensation in the Hanjiang River Basin cross-regional water diversion project using evolutionary game theory. At a glance, the model building (using evolutionary game theory) and testing (in the river basin case) indicate the rigorousness of the research process. However, some missing information and inadequate presentations require significant revisions/additions. The following comments intend to enable the authors to disseminate their work at the highest possible quality.

NOTE: Section/subsection numbering in this review refers to the suggested structure for better clarity and linearity.

Title.

• The current title is pretty long (25 words) and contains unnecessary words for a title ("research on", "based on", "taking the", "as a case"). It could be shortened and simplified into, for example, "Ecological Compensation Mechanism in Cross-Regional Water Diversion Project using Evolutionary Game Theory: Case of Hanjiang River Basin, China" (18 words).

Section 1. Introduction.

• Lines 69-72. After concluding that the "PES has been widely ... implemented on numerous national and regional scales" (lines 69-72), the follow-up paragraph begins with talking about China's economic development. The explanations between these two paragraphs seem loose and not immediately connected through bridging statements. In maintaining the linearity, it would be better if the follow-up paragraph immediately talks about PES in China.
  1. Consider making the third sentence (lines 75-78) as the beginning of the paragraph, followed by the second sentence (lines 72-75), and the fourth sentence (lines 78-82).
  2. Please rephrase these sentences to fit the reordered arrangement. The authors may mention the impact of economic development as minor parts between these sentences.
• Research aim (focus). Since this study is a case-based research (SNWDP in HJRB), the research aim (lines 126-128) should consistently be case-specific. Please rephrase the sentence to include the case as part of the aim.
• Research questions. In response to the aim, the authors should add a couple of research questions at the end of the section. Since the research aim is translared into several research objectives, each research question should correspond to one specific research objective. These questions would be the guiding corridor of explanations in this manuscript.
• Research contributions. The placement of research contributions in the Introduction section is more appropriate for a research proposal document (for conciseness purposes). In a research article, the placement breaks the principles of linearity.
  1. As an example, prior paragraphs (lines 39-125) have not elaborated on evolutionary game theory, yet the second and third contributions (lines 130-134) suddenly talk (and decide) about it.
  2. Since the contributions appear after this research produces its results, the contributions should linearly appear as part of the Discussion section.

Section 2. Case Overview.

• In maintaining the shape of this study as a case-based research, the Introduction section should be followed up by an overview of the case. Please convert the current case description (lines 520-565) into a new "Case Overview" section after the Introduction.
• In converting, please elaborate more on the critical position of the SNWDP-HJRB project among numerous PES-relevant projects in China. It would help readers make sense of the underlying ideas why an investigation on the case (this study) would be scalable for other PES-relevant cases.

Section 3. Methodology.

• Research design. Since this research is one-half model building (evolutionary game models) and one-half model testing (in SNWDP-HJRB case), the third section could begin with the design of the research (Research Design). Despite the mention of several research activities (variable selection, scenarios, hypotheses, model building, model testing, analysis, etc.), the authors should use one subsection to present all research activities (in order) as a systematic design of this research (step-by-step of research). It would convince readers that this research was systematically designed and has included all necessary activities.
  1. Adding one Figure as a virtual representation of the research design would be much appreciated.

Section 4. Model Building: Evolutionary Game Models.

• The model building using evolutionary game theory (lines 320-518) could stand as an independent "Model Building" section. It would deliver a better emphasis on the building process of the model, including the underlying thought process of the authors.

Section 5. Model Testing: The SNWDP-HJRB Case.

• After the building process of the model, the model testing in the SNWDP-HJRB case follows. Please convert lines 566-621 as an independent "Model Testing" section. It would clear up what content constitutes the second half of the research.

Section 6. Discussion.

• This section could be better arranged by following the original order of research questions (hence following the logic of research objectives). Please divide this section into a couple of subsections, in which one subsection corresponds to one specific research question. It should be clear which key finding(s) would answer which Research Question.
• This section also requires a more rigorous compare-and-contrast process between each key finding of this study to the results of relevant literature. This way, the Discussion section is the place where authors show the de facto proof of their scientific contributions.
• Then, this section should include relevant literature covering both sides (positive vs. negative results; intuitive vs. counter-intuitive results) compared to the results of this research. It would significantly enrich the whole discussion.

Section 7. Conclusion.

• Research limitations. The "research limitations" (lines 714-739) should be part of the Conclusion section. Placing them in the Discussion section weakens the entire research before it is even concluded. Please move them to the end of the Conclusion section.

Cosmetics.

• Currency code. Please use "CNY' instead of "yuan" for every mention of China's currency.
• Currency conversion. Please put the USD version of every financial number for comparative purposes. The authors may use the currency exchange rate at the time of conversion, and put the rate as a footnote on the first occasion.

Author Response

Dear Reviewers:

Thank you for your comments concerning our manuscript entitled "Research on the Ecological Compensation Mechanism of a Cross-Regional Water Diversion Project Based on Evolutionary Game Theory - Taking the Hanjiang River Basin as a Case". Those comments are all valuable and very helpful for revising and improving our manuscript, as well as the important guiding significance to our research. We have carefully evaluated your critical comments and thoughtful suggestions, responded to these suggestions point-by-point, and revised the manuscript accordingly. Revised portion are marked in red in the manuscript, all page numbers refer to the revised manuscript file with tracked changes. The main corrections in the manuscript and the responds to comments are as flowing:

 

1、The current title is pretty long (25 words) and contains unnecessary words for a title ("research on", "based on", "taking the", "as a case"). It could be shortened and simplified into, for example, "Ecological Compensation Mechanism in Cross-Regional Water Diversion Project using Evolutionary Game Theory: Case of Hanjiang River Basin, China" (18 words).

Response:

We have revised the title to "Ecological Compensation Mechanism in Cross-Regional Water Diversion Project using Evolutionary Game Theory: Case of Hanjiang River Basin, China". Revised portion are marked in red in the manuscript, and the modified content is on lines 2—4.

 

2、Introduction. Lines 69-72. After concluding that the "PES has been widely ... implemented on numerous national and regional scales" (lines 69-72), the follow-up paragraph begins with talking about China's economic development. The explanations between these two paragraphs seem loose and not immediately connected through bridging statements. In maintaining the linearity, it would be better if the follow-up paragraph immediately talks about PES in China.

Consider making the third sentence (lines 75-78) as the beginning of the paragraph, followed by the second sentence (lines 72-75), and the fourth sentence (lines 78-82).

Please rephrase these sentences to fit the reordered arrangement. The authors may mention the impact of economic development as minor parts between these sentences.

Response:

We have revised this paragraph according to the detailed suggestions you gave to make the logic of the preceding and following text smoother. Revised portion are marked in red in the manuscript, and the modified content is on lines 72—82.

"A system similar to PES has been widely used in China to solve environmental pollution problems effectively, but it is referred to as ecological compensation, and its application to water protection is known as watershed ecological compensation [21]. China is plagued by water pollution [22], such as that in the Huaihe River [23], the cyanobacteria events of Tai Lake [24], and eutrophication and heavy metal pollution in the water supply area of China's South-to-North Water Diversion Project (SNWDP) [25]. Watershed ecological compensation policies are widely implemented in these watersheds, the Environmental Protection Law in China stipulates that watershed ecological compensation should follow the principle of "who develops, protects; who destroys, restores; who benefits, compensates; who pollutes, pays" and aim to strengthen the paid use of water resources and the "polluter pays" policy through economic means [26]."

 

3、Research aim (focus). Since this study is a case-based research (SNWDP in HJRB), the research aim (lines 126-128) should consistently be case-specific. Please rephrase the sentence to include the case as part of the aim.

Response:

We have rephrased the research aim to make HJRB an important part of it. Revised portion are marked in red in the manuscript, and the modified content is on lines 127—130.

"This paper focuses on the evolution of upstream, downstream, and central governments' decision-making behavior in watershed ecological compensation for cross-regional water diversion projects and examines the impact of opportunity costs on upstream government behavior within the HJRB."

 

4、Research questions. In response to the aim, the authors should add a couple of research questions at the end of the section. Since the research aim is translared into several research objectives, each research question should correspond to one specific research objective. These questions would be the guiding corridor of explanations in this manuscript.

Response:

Based on your suggestions (4 and 5), we removed the original "research contributions" and added several "research questions", so that each research question correspond to one research objective, the revised paragraph has reasonable logic and looks clearer. Revised portion are marked in red in the manuscript, and the modified content is on lines 131—137.

"The main research questions of this paper are as following:

• What is the difference in the evolution of the game between upstream and downstream governments before and after the introduction of the central government?
• How do opportunity costs affect the decision-making behavior of upstream governments?
• Is the current compensation rate from the central government to upstream governments in HJRB reasonable?"

 

5、Research contributions. The placement of research contributions in the Introduction section is more appropriate for a research proposal document (for conciseness purposes). In a research article, the placement breaks the principles of linearity. As an example, prior paragraphs (lines 39-125) have not elaborated on evolutionary game theory, yet the second and third contributions (lines 130-134) suddenly talk (and decide) about it. Since the contributions appear after this research produces its results, the contributions should linearly appear as part of the Discussion section.

Response:

Based on your suggestions (4 and 5), We have moved the original "research contributions" in this paragraph to the discussion section to make it more linear. We named it "7.5. Main contributions". Revised portion are marked in red in the manuscript, and the modified content is on lines 789—800.

"7.5. Main contributions

The main contributions of this paper are as following:

• it focuses on the impact of cross-regional water diversion projects on the decision-making behavior of upstream and downstream governments.
• it adopts an evolutionary game model to study the change in subject behavior strategies in watershed ecological compensation according to the behavioral characteristics of stakeholders.
• it introduces the central government into the game model of upstream and downstream governments and constructs a three-party evolutionary game model.
• it studies the relationship between opportunity costs and upstream governmental behavior in the implementation of watershed ecological compensation using actual data from the HJRB."

 

6、Case Overview. In maintaining the shape of this study as a case-based research, the Introduction section should be followed up by an overview of the case. Please convert the current case description (lines 520-565) into a new "Case Overview" section after the Introduction. In converting, please elaborate more on the critical position of the SNWDP-HJRB project among numerous PES-relevant projects in China. It would help readers make sense of the underlying ideas why an investigation on the case (this study) would be scalable for other PES-relevant cases.

Response:

 We have moved the original "4.1" section to a position immediately after the "1. Introduction" section and named it "2. Case overview", we have further detailed the key position of the SNWDP-HJRB project among numerous PES-related projects in China, and has been modified to make this case look more representative and important based on your helpful suggestions. Revised portion are marked in red in the manuscript, and the modified content is on lines 138—180.

"2. Case overview

The SNWDP is currently the world's largest water project benefiting the largest number of people and spanning the largest area. It is an important initiative to address the uneven spatial distribution of water resources in China [36]. The HJRB is a strong backbone of the SNWDP. The Hanjiang River is 1,532 km long and is an important bridge connecting the Yangtze River Economic Belt and the Silk Road Economic Belt. The middle and lower reaches of the Hanjiang River are an important ecological and economic corridor in Hubei Province [37,38]. The HJRB covers an area of approximately 159,000 square kilometers, involving 20 cities and 78 counties in a total of five provinces and cities in Hubei, Shaanxi, Sichuan, Chongqing, and Gansu. With the rapid population growth and economic development in the basin, much domestic sewage and industrial wastewater are discharged into the HJRB, thus seriously polluting the basin's waters [39]. The Ministry of Ecology and Environment has set up more than 60 monitoring sections in the HJRB to evaluate the water environmental quality condition and conduct the dynamic monitoring of water pollution in key areas. The latest study concluded that the water bodies of the HJRB showed eutrophication, enrichment of nutrient salts such as N and P, and an overall increasing trend of heavy metal content, with Fe and Mn being the main pollutants [40–42].

As an important water source of the SNWDP, the water quality condition of the Hanjiang River directly affects the operation of the whole project. The Hanjiang River is the largest tributary of the Yangtze River [43,44]. Figure 1 shows that the HJRB is located in midwestern China, where the economy is relatively backward, arable land resources are relatively scarce, and abundant mineral resources [45–47]. These areas have a strong desire to develop. However, over-exploitation of resources can cause severe pollution of local water resources [48,49]. To ensure the delivery of high-quality water resources to the northern provinces, water sources must comply with stricter water quality standards. Nevertheless, it is difficult to balance economic development and environmental protection [50]. Water source areas have made great sacrifices for the cross-regional water transfer projects, to solve the problem of relatively backward economic development of water source areas, the central government needs to compensate ecological compensation for water source areas to compensate for this imbalance of rights, to achieve sustainable development of water source areas, and thus promote coordinated regional development.

Clarifying the evolution of the decision-making behavior of upstream, down-stream and central governments in cross-regional water transfer projects is the key to the study of watershed ecological compensation. This study takes HJRB as the case, combines the specific situation of SNWDP, and uses realistic data to study the changes in decision-making behavior of the upstream government as the main responsible parties for protecting water sources, which can not only provide data support for local watershed ecological compensation standardization but also provide case references for other watersheds in similar situations.

 

7、Research design. Since this research is one-half model building (evolutionary game models) and one-half model testing (in SNWDP-HJRB case), the third section could begin with the design of the research (Research Design). Despite the mention of several research activities (variable selection, scenarios, hypotheses, model building, model testing, analysis, etc.), the authors should use one subsection to present all research activities (in order) as a systematic design of this research (step-by-step of research). It would convince readers that this research was systematically designed and has included all necessary activities. Adding one Figure as a virtual representation of the research design would be much appreciated.

Response:

We have split the original "3. Model and Analysis" section into two parts, "4. Methodology" and "5. Model Building". In addition, we have added a new subsection "4.4 Research design" to present all research activities in a sequential manner, and we have designed a new Figure in this subsection to show the entire research design in a clear and systematic way. Revised portion are marked in red in the manuscript, and the modified content is on lines 357—368.

"4.4. Research design

Figure 4 illustrates the technical scheme of this study. First, this study abstracts several hypotheses from realistic watershed environmental problems and decomposes them into specific variables. Second, different players have different behavioral strategies, dividing the game model into different contexts and forming different payoff matrices. Finally, the whole evolutionary process follows a selection mechanism, which determines the replicated dynamic equation by the payoff matrix and finds the contained solution, and a variation mechanism, which is used to test whether the evolutionary equilibrium is stable, i.e., to verify whether the solution found by the replicated dynamic system is an evolutionary stabilization strategy.

 

8、Model Building: Evolutionary Game Models. The model building using evolutionary game theory (lines 320-518) could stand as an independent "Model Building" section. It would deliver a better emphasis on the building process of the model, including the underlying thought process of the authors.

Response:

We have included the model building section as an independent "5. Model building" section. Revised portion are marked in red in the manuscript, and the modified content is on lines 369—568.

 

9、Model Testing: The SNWDP-HJRB Case. After the building process of the model, the model testing in the SNWDP-HJRB case follows. Please convert lines 566-621 as an independent "Model Testing" section. It would clear up what content constitutes the second half of the research.

Response:

We have included the model testing in the SNWDP-HJRB case as an independent "6. Model testing" section. Revised portion are marked in red in the manuscript, and the modified content is on lines 569—654.

 

10、Discussion. This section could be better arranged by following the original order of research questions (hence following the logic of research objectives). Please divide this section into a couple of subsections, in which one subsection corresponds to one specific research question. It should be clear which key finding(s) would answer which Research Question.

Response:

We have divided the original discussion section into 5 subsections, and each of the revised subsections provides a detailed answer to one specific research question (research objectives) :

"7.1. Watershed ecological compensation with nonsupervision of the central government", this subsection answers the question "How would the decision-making behavior of upstream and downstream governments evolve without central government intervention?".

"7.2. Watershed ecological compensation with the supervision of the central government", this subsection answers the question "How would the decision-making behavior of upstream and downstream governments evolve with central government intervention?".

"7.3. The relationship between opportunity costs and the decision-making behavior of upstream governments in the HJRB", this subsection answers the question "How opportunity costs influence upstream government decision-making behavior in the SNWDP-HJRB case?".

"7.4. Comparison with previous literature", this subsection answers the question "What are the similarities and differences between the key findings of this study compared to previous literature?". Demonstrates that this study is rigorous and scientific.

"7.5. Main contributions", Based on your suggestion 5，we have moved the original research contribution to here.

The discussion section of this manuscript became more logical after revising it according to your suggestions. Revised portion are marked in red in the manuscript, and the modified content is on lines 671—800.

 

11、Discussion. This section also requires a more rigorous compare-and-contrast process between each key finding of this study to the results of relevant literature. This way, the Discussion section is the place where authors show the de facto proof of their scientific contributions. Then, this section should include relevant literature covering both sides (positive vs. negative results; intuitive vs. counter-intuitive results) compared to the results of this research. It would significantly enrich the whole discussion.

Response:

We have added a new subsection "7.4. Comparison with previous literature" to the Discussion section, which is dedicated to show how this study has similar and different findings from other related literature and further elaborate the reasons, we have compared and contrasted them carefully.

Again, we thank you for your suggestion and the revised subsection provides strong evidence of the scientific validity of this study and demonstrates how this study differs from previous studies (Innovation Points). Revised portion are marked in red in the manuscript, and the modified content is on lines 751—788.

“7.4. Comparison with previous literature

This study finds that the initial willingness of upstream and downstream governments to cooperate largely influences the outcome of the game model, and that central government regulation accelerates the game model to a steady state. This finding is similar to previous literature [9,32,59,69], and much previous literature has placed high expectations on central government regulation because upstream and downstream governments are the central stakeholders in watershed protection and economic development. Consequently, they will inevitably prefer to make decisions that yield faster benefits in the game. However, short-term benefits often come at the expense of the ecological environment, which is not in the public interest. Therefore, it is necessary to introduce incentives and penalties from the central government.

However, the previous literature has argued that ecological compensation without the supervision of the central government is impractical and that upstream and downstream governments cannot spontaneously cooperate in implementing ecological compensation systems [9]. Whereas the results of this paper conclude that as long as the initial willingness to cooperate between the two sides of the game is high, although there is no intervention by the central government, upstream and downstream governments cooperate to protect the water environment, but doing so may consume more time and evolve several times to reach the stable state, which is obviously different from the findings of the previous literature. The main reason for this difference may be that when upstream and downstream governments realize that cooperation in managing the water environment is the only way to achieve sustainable development, the initial willingness of the two sides of the game to cooperate is significantly increased, and an alliance of interest is formed. Nevertheless, China's current watershed management model is based on administrative regions, where local governments are responsible only for the water environment under their jurisdiction. The entire watershed is divided into several parts by different administrative regions, leading to higher management and governance costs, which also makes upstream and downstream governments less willing to cooperate initially due to the existence of different interests. Specifically, upstream governments are driven by the interest of making full use of water resources to develop the local economy, including enterprises that may cause severe pollution to the water environment. The flowing river links the upstream area to the downstream area, and the polluted water then spreads to the downstream area, so downstream governments will refuse to compensate upstream governments. Therefore, it is essential to increase the initial willingness of upstream and downstream governments to cooperate. In other words, strengthening the sense of cooperation between upstream and downstream governments can allow for the unnecessary wasting of resources to be avoided and the achievement of better results in terms of protecting the water environment at a smaller cost.”

In addition to the above revisions, we have revised subsections "7.1" and "7.2" in the Discussion section to make them appear more comprehensive, mainly to explain the findings of this study in more depth. Revised portion are marked in red in the manuscript, and the modified content is on lines 671—725.

“7.1. Watershed ecological compensation with nonsupervision of the central government

According to the results in section 5.1, the initial willingness to cooperate directly affects the final decision making of upstream and downstream governments. The initial willingness to cooperate reflects the inclination of upstream and downstream governments toward different strategies, and simulating different scenarios through the evolutionary game model allows for the exploration of more realistic results. When the initial willingness to cooperate is high, upstream governments are willing to choose to protect the water environment, and downstream governments are willing to choose compensate. In this case, the evolutionary game model quickly stabilizes in the optimal state; i.e., the model converges to point M3. In contrast, the evolutionary game model may also reach a stable state under certain constraints when the initial willingness to cooperate is low. Nevertheless, the time consumed increases significantly, and there is a greater possibility of stabilizing in the worst state; i.e., the model converges to point M1.

The reason may be that when upstream and downstream governments participate in watershed ecological compensation, the willingness of downstream governments to pay compensation fees is low due to the high cost of environmental treatment. Upstream governments reduce investment in ecological protection due to a lack of subsidies, leading to an imbalance in the game between the upstream and downstream governments, affecting the basin's ecological sustainability. Therefore, it is necessary to increase the cooperation willingness and consciousness between upstream and down-stream governments, to achieve stable implementation of the watershed ecological compensation mechanism, and to protect water resources.

7.2. Watershed ecological compensation with the supervision of the central government

According to the results in section 5.2, under the supervision of the central government, it is easier for upstream and downstream governments to reach a stable state. Regardless of their initial willingness of upstream and downstream governments to cooperate, the central government's regulatory actions can significantly shorten the time for the evolutionary game model to reach a stable state. It is worth noting that this point N3 (1, 1) is the only state-stable equilibrium, which indicates that under the regulation of the central government, upstream and downstream governments must eventually achieve positive cooperation.

It can be speculated that under the central government intervention, as the prob-ability of the downstream government taking measures increases, the attitude of the upstream government will change from initial non-cooperation to cooperation, and they will collaborate to promote environmental management in the basin further. When the downstream government has a higher probability of implementing compensation policies, the upstream and downstream governments will adopt a more positive attitude to solve the watershed environmental problems, conducive to the sustainable development of the basin and the realization of public values.

The behavioral choices of upstream and downstream governments have a strong coupling synergy, i.e., the behavioral choices of one party have a strong influence on the behavioral strategies of the other party. The results of the evolutionary game model show that the watershed ecological compensation mechanism needs to be jointly governed by the central and local governments. The central government should clarify the interests of all parties in the watershed and promote the cooperation between the upstream and downstream governments by promoting them to get the corresponding ecological compensation benefits through a perfect reward and punishment mechanism.

In reality, the central government rarely imposes economic punishment on local governments, and such punishments are mainly in the form of administrative orders, notifications, and disciplinary actions, but the compensation is mainly economic in nature, which can be more easily quantified. The regulation of the central government can effectively solve the prisoner's dilemma of upstream and downstream governments. Whether the compensation amount is reasonable is the key issue that needs to be considered by the central government to implement the regulation, which has been discussed in this paper.

 

12、Conclusion. Research limitations. The "research limitations" (lines 714-739) should be part of the Conclusion section. Placing them in the Discussion section weakens the entire research before it is even concluded. Please move them to the end of the Conclusion section.

Response:

We have moved the "Research limitations" section to the end of the "Conclusion", and added an explanation of future work. This manuscript looks more logical after revising it according to your suggestions. Revised portion are marked in red in the manuscript, and the modified content is on lines 839—863.

“The limitations of this paper and future work are as following:

• The evolutionary game model constructed in this paper is applicable only to watershed ecological compensation mechanisms in which the same type of government would maintain consistent actions. Suppose that there is not enough solidarity among both upstream and downstream governments. In such a case, there may be competition among them; i.e., different upstream governments may compete for water use rights and compensation fees, while different downstream governments may shift compensation responsibilities to each other to compensate less or not at all. A more complex model to analyze this situation can be constructed in future studies.
• The cross-effects of different variables may affect the applicability of the evolutionary game model constructed in this paper. This paper analyzes the effects of the following variables on the model: governance costs, ecological benefits, central government compensation and penalties, and initial willingness to cooperate. However, this paper does not consider whether there is a cross-effect between these variables and considers only the strategy choice of the game subjects under a single factor change.
• Similar to other works, this paper is based on model-derivation-assuming strategies or pure interest needs of upstream and downstream governments in the basin, which may lead to gaps between our work and reality. However, we use actual data in the case study section, which makes our work more realistic than other only model derivation studies.
• The study of the opportunity costs of watershed governance is more complex and is related to many aspects of the economy and society. Therefore, in the future, more influencing factors can be added to the model constructed in this paper to study and calculate more reasonable opportunity costs.”

 

13、Currency code. Please use "CNY' instead of "yuan" for every mention of China's currency.

Response:

We have replaced all the "yuan" in the manuscript with "CNY". Revised portion are marked in red in the manuscript, and the modified content is on lines 580—586, 591, 636—650, and 742—745.

 

14、Currency conversion. Please put the USD version of every financial number for comparative purposes. The authors may use the currency exchange rate at the time of conversion, and put the rate as a footnote on the first occasion.

Response:

We have labeled all the financial numbers in the manuscript with the USD version and have labeled the exchange rates at the time of conversion in the appropriate places. There are many modifications involving financial numbers, the following is the first conversion of CNY to USD, all modifications have been marked in red in the manuscript, and the modified content is on lines 580—586, 591, 636—650, and 742—745.

"since 2008, the central government has been practicing ecological compensation for the water sources of the Hanjiang River, with annual compensation rates of 870 million CNY (137.112 million USD. Exchange Rates: 1 USD ≈ 6.3465 CNY, similarly hereinafter) in Hanzhong city, 770 million CNY (121.352 million USD) in Ankang city, 520 million CNY (81.952 million USD) in Shangluo city, 680 million CNY (107.168 million USD) in Nanyang city, and 750 million CNY (118.2 million USD) in Shiyan city."

Round 2

Reviewer 2 Report

After a thorough check on the revised manuscript, I see that the authors have put effort into revising their first submission. I want to suggest the following revisions for this second review round.

.

Language concern. The language used in texts added as part of the first round revision seems unnatural. Even though end-to-end proofreading is unnecessary, it would be appreciated if the authors do moderate proofreading on all added texts before resubmitting.

Line 256. Research design ⇒ Methodology.

Line 368. Is "technology frame" the correct title for Figure 4? How about "research design"?

Figure 4. This figure needs a Legend to explain the meaning of different box types, line types, and arrow types/thicknesses.

Lines 752-788.

• The addition of this subsection is much appreciated. However, the inclusion of four (4) literature to compare/contrast this research with prior literature is inadequate. Please do the compare/contrast process for each argument, making an active discussion between the findings of this research and the findings of other studies.
• Rather than merely putting citations at the end of sentences, the authors should elaborate more on what each cited reference was talking about the discussed finding. This would prove that every cited reference is part of the flowing discussion.

Lines 789-800. Since Subsection 7.4 should have covered the contributions of this research among published literature, Section 7.5 becomes redundant and should therefore be merged (literally merged, not only moved) into Section 7.4.

Lines 823-838. Rather than making bullet points with few correlations, the authors should include them in a single paragraph with flowing explanations. This way, readers would easily make sense of how the suggestions emerge in the first place.

Lines 839-864. The lines should get the same treatment as above.

Cosmetics.

• Decimal digits. Throughout the manuscript, please use consistent decimal digits for all financial values (either in CNY or USD).

.

I appreciate all efforts the authors have made to address the concerns of the reviewers. I would like to say a piece of good luck with the publication, and for the continuity of research on similar or other relevant topics.

Author Response

Dear Reviewers:

Thank you for your comments concerning our manuscript. We have carefully evaluated your critical comments and thoughtful suggestions, responded to these suggestions point-by-point, and revised the manuscript accordingly. Revised portion are marked in red in the manuscript, all page numbers refer to the revised manuscript file with tracked changes. The main corrections in the manuscript and the responds to comments are as flowing:

 

• Language concern. The language used in texts added as part of the first round revision seems unnatural. Even though end-to-end proofreading is unnecessary, it would be appreciated if the authors do moderate proofreading on all added texts before resubmitting.

Response: We carefully checked the manuscript. In order to improve the readability of the manuscript, we got the help of AJE (American Journal Experts).

 

• Line 256. Research design ⇒

Response: We have revised this section title. Revised portion are marked in red in the manuscript, and the modified content is on lines 256.

 

• Line 368. Is "technology frame" the correct title for Figure 4? How about "research design"?

Response: We have revised this the title for Figure 4. Revised portion are marked in red in the manuscript, and the modified content is on lines 368.

 

• Figure 4. This figure needs a Legend to explain the meaning of different box types, line types, and arrow types/thicknesses.

Response: We have revised Figure 4 and added a new legend. Thank you for your suggestion to make Figure 4 look more understandable.

Revised portion are marked in red in the manuscript, and the modified content is on lines 367.

 

• Lines 752-788. The addition of this subsection is much appreciated. However, the inclusion of four (4) literature to compare/contrast this research with prior literature is inadequate. Please do the compare/contrast process for each argument, making an active discussion between the findings of this research and the findings of other studies. Rather than merely putting citations at the end of sentences, the authors should elaborate more on what each cited reference was talking about the discussed finding. This would prove that every cited reference is part of the flowing discussion.

Response: We have reworked this subsection.

• First paragraph.Relate this study to the same findings in the previous literature, which both this study and the previous literature agree on: "initial willingness of upstream and downstream governments to cooperate largely influences the outcome of the game model".
• The second and third paragraphs.We explain the key finding of this study that differs from previous literature: "it is possible for upstream and downstream governments to reach cooperation even without central government oversight", and explain in detail the reasons.
• Fourth paragraph.It mainly explains that this study has conducted a case study using realistic data, which may be closer to the facts than previous literature.

Revised portion are marked in red in the manuscript, and the modified content is on lines 750-805.

“7.4. Comparison with previous literature

This study finds that the initial willingness of upstream and downstream governments to cooperate largely influences the outcome of the game model; this finding is similar to previous literature. In reality, upstream and downstream governments are the central stakeholders in watershed protection and economic development [69]. Consequently, they will inevitably prefer to make decisions that yield faster benefits in the game [59]. However, short-term benefits often come at the expense of the ecological environment, which is not in the public interest [32]. Therefore, it is necessary to introduce incentives and penalties from the central government. Based on this, the game model after central government regulation is studied in section 5.2, which concludes that central government regulation accelerates the game model to a steady state. Many previous studies have placed high expectations on central government regulation because the central government has the power to reward and punish local governments, and there is a difference in administrative status between them [9].

However, the previous literature has argued that ecological compensation without the supervision of the central government is impractical and that upstream and downstream governments cannot spontaneously cooperate in implementing ecological compensation systems [9]. However, the results of this paper conclude that as long as the initial willingness to cooperate between the two sides of the game is high, although there is no intervention by the central government, upstream and downstream governments cooperate to protect the water environment but doing so may consume more time and evolve several times to reach the stable state, which is obviously different from the findings of the previous literature.

The main reason for this difference may be that when upstream and downstream governments realize that cooperation in managing the water environment is the only way to achieve sustainable development, the initial willingness of the two sides of the game to cooperate is significantly increased, and an alliance of interest is formed [70]. Nevertheless, China's current watershed management model is based on administrative regions, where local governments are responsible only for the water environment under their jurisdiction [71]. The entire watershed is divided into several parts by different administrative regions, leading to higher management and governance costs, which also makes upstream and downstream governments less willing to cooperate initially due to the existence of different interests. Specifically, upstream governments are driven by the interest of making full use of water resources to develop the local economy, including enterprises that may cause severe pollution to the water environment [72]. The flowing river links the upstream area to the downstream area, and the polluted water then spreads to the downstream area, so downstream governments will refuse to compensate upstream governments. Therefore, it is essential to increase the initial willingness of upstream and downstream governments to cooperate. In other words, strengthening the sense of cooperation between upstream and downstream governments can allow for the unnecessary waste of resources to be avoided and the achievement of better results in terms of protecting the water environment at a smaller cost.

The criteria for watershed ecological compensation are not only a focus of government management but also one of the hot issues discussed in academia [68,73]. The previous literature has proposed the concept of opportunity cost by analyzing the law of cost and linking utility to cost [74,75]. Since then, opportunity cost accounting has been widely used in ecological compensation studies and used as an important basis for determining ecological compensation standards [76], and the method is often used in the measurement of the minimum compensation amount for ecological compensation [77]. In the HJRB, the main purpose is to compensate the upstream government for the loss of giving up other development opportunities so that the upstream government can gain enough incentive to participate in watershed protection. While previous literature has estimated ecological compensation standards mainly by accounting for the economic value of natural resources [78], this study uses actual data from the HJRB to demonstrate that the current compensation standards are not reasonable, which makes the results of this study more realistic compared with those of previous literature.”

 

• Lines 789-800. Since Subsection 7.4 should have covered the contributions of this research among published literature, Section 7.5 becomes redundant and should therefore be merged (literally merged, not only moved) into Section 7.4.

Response: We are sorry for our inaccurate expression. We have merged these two subsections.

 

• Lines 823-838. Rather than making bullet points with few correlations, the authors should include them in a single paragraph with flowing explanations. This way, readers would easily make sense of how the suggestions emerge in the first place.

Response: We have rephrased the paragraph and tied all the suggestions together to make them seem more linear and logical.

Revised portion are marked in red in the manuscript, and the modified content is on lines 828-846.

“Based on the analysis in this paper, the following suggestions are made to improve the watershed ecological compensation in the HJRB:

The model results show that initial willingness is crucial, so the willingness of upstream and downstream governments to cooperate and form an ecological community of interest should be increased. In addition, the central government's supervision can make the game model reach a steady state faster, and the current compensation standard of the central government to the upstream government of the HJRB is unreasonable; therefore, the central government should strengthen the supervision of the implementation of the HJRB ecological compensation system and increase economic compensation to upstream areas. The relationship between opportunity cost and the compensation amount is complex and should be systematically studied, and diversified compensation methods should be explored. For example, ecological compensation mechanisms can be combined with the river chief system, unified management of watersheds should be implemented, and the negative impact of administrative divisions on the integrity of watershed protection work should be eliminated. On the other hand, it is also important to address the root causes of watershed pollution. The transformation of highly polluting industries in upstream areas to green and low-carbon areas should be promoted, and downstream areas should be suggested to make full use of ecological advantages to build eco-friendly industries.”

 

• Lines 839-864. The lines should get the same treatment as above.

Response: We have rephrased the paragraph. Revised portion are marked in red in the manuscript, and the modified content is on lines 847-869.

“The limitations of this paper and future work are as follows:

First, the evolutionary game model constructed in this paper is applicable only to watershed ecological compensation mechanisms in which the same type of government would maintain consistent actions. Suppose that there is not enough solidarity among both upstream and downstream governments, there may be competition among them; i.e., different upstream governments may compete for water use rights and compensation fees, while different downstream governments may shift compensation responsibilities to each other to compensate less or not at all. A more complex model to analyze this situation can be constructed in future studies. Second, the cross-effects of different variables may affect the applicability of the evolutionary game model constructed in this paper. This paper analyzes the effects of the following variables on the model: governance costs, ecological benefits, central government compensation and penalties, and initial willingness to cooperate. However, this paper does not consider whether there is a cross-effect between these variables and considers only the strategy choice of the game subjects under a single factor change. Third, similar to other works, this paper is based on model-derivation-assuming strategies, or the pure interest needs of upstream and downstream governments in the basin, which may lead to gaps between our work and reality. However, we use actual data in the case study section, which makes our work more realistic than other only model derivation studies. Finally, the study of the opportunity costs of watershed governance is more complex and is related to many aspects of the economy and society. Therefore, in the future, more influencing factors can be added to the model constructed in this paper to study and calculate more reasonable opportunity costs.”

 

• Decimal digits. Throughout the manuscript, please use consistent decimal digits for all financial values (either in CNY or USD).

Response: We have standardized the decimal digits for all financial values in the manuscript, all modifications have been marked in red in the manuscript, and the modified content is on lines 582-592, 636-654, 742-745.

This manuscript is a resubmission of an earlier submission. The following is a list of the peer review reports and author responses from that submission.