Investigating the Horizontal Carbon ecological Compensation Mechanism in the Yellow River Basin: Construction, Validation, and Policy Impact

Haiyan Lu Xiaofei Zhao ^*

• Lanzhou University of Finance and Economics, Lanzhou, China

This study aims to explore and validate the construction and effectiveness of a horizontal carbon ecological compensation mechanism in the Yellow River Basin (YRB). The aim is to enhance the ecological and environmental management capabilities within the YRB. Using data from 2013 to 2022, we calculated the net carbon emissions across the provinces in the YRB, distinguishing between carbon surplus and carbon deficit provinces. These calculations form the basis for constructing an evolutionary game model, which is used to analyse the dynamic evolutionary game under the introduction of incentive and punishment mechanisms, identifying key factors affecting the horizontal carbon ecological compensation mechanism in the YRB. This study advocates for the horizontal carbon ecological compensation mechanism in the YRB through a voluntary trading approach. By quantifying the influencing factors and employing machine learning techniques, we predict the net carbon emissions under the voluntary trading scenario, serving as evidence of the effectiveness of the ecological compensation mechanism. The results of our study demonstrate that with market-based incentives and proper guidance, the control and conservation of carbon emissions in the YRB can be significantly enhanced, providing a theoretical foundation for horizontal carbon ecological compensation within the basin. The innovation of this study lies in the development of a horizontal ecological compensation mechanism based on carbon emission trading and the application of machine learning methods to verify its effectiveness. This mechanism not only offers a new solution for the ecological protection of the YRB but also provides a reference model for the ecological governance of other river basins.