Eco-compensation is a multi-disciplinary topic. There is no consensus on the issue of river eco-compensation across districts. Although policies regarding river eco-compensation have been issued in China since 2008, due to the high cost, eco-compensation has not been well implemented in the Taihu pilot region. Therefore, a simplified method based solely on water quality (both water quality and water volume included in the Taihu method) was proposed for North Jiangsu province (NJP). However, the formula was flawed and it led to payments being too low. Three problems need to be solved: (1) how to specify the eco-compensation areas; (2) how to test a reasonable eco-compensation model and (3) how to determine the compensation criterion. Solving these issues is already a priority. In this paper, three potential solutions surrounding eco-compensation are discussed: (1) three principles for selecting the representative eco-compensation areas are suggested; (2) the compensation calculation method based on contaminant flux above the ultra standard is revised and (3) a compensation criterion model based on the treatment costs of sewage is proposed. In the NJP case in 2009, the average eco-compensation criterion for chemical oxygen demand (COD) is 2,000 Chinese Yuan (CNY) per ton and ammonia nitrogen (NH4-N) and total phosphorus (TP) are 8,000 CNY and 80,000 CNY per ton, respectively. Five districts needed to be compensated. The payments in the revised scheme were 4.15-586 million CNY, which were 16-48 times greater than that in the draft method. The new method can provide an important template for managers when drafting river eco-compensation schemes.