Payments for ecosystem services (PES) is one effective approach to address serious ecological degradation caused by rapid socio-economic development. However, inappropriate PES policy can cause conflicts among stakeholders. Uncovering the ecological and socioeconomic impacts of PES is crucial to achieve sustainable development. Focusing on donor-side and receiver-side impacts of PES, this study proposes a systematic evaluation framework based on improved emergy analysis and cost-benefit accounting. A garlic farm in Xizhou Town, Yunnan Province, where conflicts between local famers and government arise after enacting the garlic banning policy, is adopted as the study case. After reviewing the local garlic cultivation situation for the period of 2014–2018 and conducting site investigations, three scenarios, including Traditional Planting Mode (TPM), Alternative Planting Mode (APM) and Ecological Planting Mode (EPM), are set up and compared based on local characteristics. Results show that natural conditions, market price and cultivated land area affect emergy inputs and the overall sustainability. Both environmental load and pollution impacts have been decreased, while the overall sustainability has been significantly improved after the implementation of the APM policy. However, from per household income perspective, the results are completely opposite because per household income has been greatly reduced. EPM has remarkably increased economic and ecological benefits from both aspects compared with TPM, though is still inferior to APM in terms of total ecological impact. Several policy suggestions are proposed, including generalizing EPM, increasing compensation amount and capacity-building efforts. • Emergy analysis is applied to evaluate the impacts of PES, combining with cost benefit analysis. • Three scenarios are established to compare which policy can lead to the best results. • APM has high ecological benefits, but reduces farmers' income. • Considering both ecological and economic benefits, EPM has an edge over APM. • Policy recommendations are raised to further improve the overall sustainability. [ABSTRACT FROM AUTHOR]