Abstract: The establishment of ecological compensation mechanism is an important institutional guarantee to promote the collaborative maintenance of ecological environment security between the upstream and downstream of the basin, and to realize the benefits and benefits of ecological environment protection economic benefit is an important way to win-win. Under the background of establishing socialist ecological civilization, based on differential game theory, Nash non-cooperative strategy is constructed, centralized strategy and ecological compensation strategy with cost sharing contract, and discusses the interactive game strategy between the central government's participation in subsidizing upstream and downstream pollution control investment and upstream and downstream choosing to share pollution control cost, The corresponding optimal feedback strategies of the upstream and downstream of the basin and the optimal trajectory of pollution control over time are obtained and compared, and a bargaining model is designed to distribute the environmental benefits of the basin. The following conclusions are drawn:①Downstream local governments and central governments should give priority to ensuring the long-term benefits of upstream local governments by establishing a perfect vertical transfer payment mechanism and formulating cost sharing contracts.②Only with the coordination of the central government and reasonable cost sharing between the upstream and downstream can the economic growth of the basin achieve Pareto improvement, and it is considered to improve the ecological compensation of the basin. The focus of the mechanism is to improve the financial transfer payment mechanism combining horizontal and vertical. By improving the central financial compensation mechanism, local governments are encouraged to control pollution and reduce emissions by means of tax adjustment, policy preference and special funds for ecological protection.③In the long run, due to the existence of the natural attenuation rate of pollution control, the joint efforts of governments at all levels, social organizations, people and other parties in the basin are more needed for the environmental problems of cross administrative regions. Finally, the relevant parameters are analyzed through an example to verify the effectiveness of the conclusion, which provides theoretical support for the upstream and downstream local governments to establish long-term cooperative environmental governance and formulate ecological compensation policies.

Key words: central local collaboration; differential game; ecological compensation; optimal control method; pollution governance investment