| Summary: | Horizontal/interregional eco-compensation is an important policy to promote regional ecological and environmental cooperation and realize sustainable development for river basins. To solve these problems, a horizontal compensation framework based on integrated water rights (IWRs) transaction has been established. Taking the Yellow River basin as an example, the IWRs scheme realizes sustainable development, to a certain extent, improving the current issues of shortages, the low utilization efficiency of water resources, and weak water environmental carrying capacity. Evidence for this improvement includes: (1) an increased revenue of USD 244.71; (2) the water use efficiency in the middle and upper streams (Qinghai, Gansu, Ningxia, Neimenggu, Shanxi) and the overall river basin being obviously improved (the maximum improvement value is 0.1273 m<sup>3</sup>/USD); (3) the overload situation of water resource carrying status being relieved in some subareas (Ningxia, Neimenggu, Henan, Shandong) and improved in the whole basin (from 0.6366 to 0.6124); (3) the water environmental carrying rate (COD and NH<sub>4</sub><sup>+</sup>-N) of the middle and upper streams (Qinghai, Gansu, Ningxia, Neimenggu, Shanxi) and the whole river basin obviously decreasing (with maximum decreasing values of 0.43 and 1.14, respectively).
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