The national compensation system provides crucial economic support for eco-environment construction and protection in western China. However

this compensation is only policy and is not safeguarded by any legal mechanism. Also

it is not integrated with a social compensation system

so it is hard to ensure that sustainable development results from the eco-environment construction and protection. The benefit of eco-environment construction and protection do not always materialize. Resolution of existing issues concerning the sources of compensation funds and the criteria and forms of compensation for the eco-environmental construction and protection in the western China are explored through consideration of the establishment and operation of the law and institutions of the national compensation system. Forms of social compensation systems for eco-environmental construction and protection are also discussed.