Abstract: As a natural geographical unit centered on water resources, watersheds serve as critical entities for coordinating the development and protection of territorial spaces. Establishing an ecological compensation mechanism based on the “water-land” relationship has become a vital approach to reconcile the conflicts between environmental conservation and socio-economic development in watersheds. It plays a significant role in advancing mo-dern watershed governance and achieving green, high-quality development. Xin’an River Watershed is the first cross-provincial ecological compensation pilot in China. With it as a case, we adopted a comprehensive research approach centered on scenario analysis and logical deduction to systematically examine the evolutionary trajectory of the compensation mechanism, diagnose shortcomings in the existing compensation system, and construct a dynamic compensation framework based on the disturbance of the “water-land” relationship. We found that the current compensation mechanism was lacking in whole-process management under the “post-event compensation” model and was insufficient for self-sustaining development due to its unitary compensation approach. An integrated watershed assessment system, based on the linkage of water quality “effect value”, “measured value”, and “target value”, could overcome the limitations of traditional evaluations that rely solely on measured values and thus enable precise tracing of water and land environmental issues. Differentiated targeted compensation pathways, informed by diagnostic results from water and land environment assessments, could help enhance the focus and sustainability of governance measures. The systematically constructed dynamic compensation framework would facilitate the institutional transition of the ecological compensation mechanism from “post-event remediation” to “whole-process governance”. This study would provide new perspectives, ideas, and methodologies for the integrated governance of watersheds and territorial spaces.

Key words: watershed, ecological compensation mechanism, water environment, territorial spatial governance