As an effective emission reduction approach, CO capture and storage (CCS) combined with enhanced water recovery (EWR) technology can not only reduce CO emissions, but can also recover deep saline water resources to relieve pressure on regional water resources, and can ensure the energy supply and both social and economic development. However, the environmental benefits and application costs of CCS-EWR are uncertain, and are determined by the technology level, geological conditions, and other physical factors. In this study, an optimal source-sink matching model and a techno-economic assessment model were developed to evaluate the contributions of CCS-EWR to carbon emission reduction and the increase of the water supply by considering various uncertain factors, as well as the corresponding costs. In addition, the Yellow River Basin (YRB) in China was selected as the research region because, while there are abundant coal-fired power plants (CFPPs) in the YRB, the water resources are scarce. The results revealed the following. (1) The maximum CO capture capacity of the 236 CFPPs in the YRB is about 738.77 Mt/a, and nearly 13.14 Gt of fresh water could be provided until the 236 CFPPs in the YRB retire, which can partially relieve the pressure on the supply of water resources. (2) With the consideration of the CCS-EWR benefits, the average cost of the 236 CFPPs in the YRB in their residual lifetime to reduce their CO emissions by 90% will be no more than 180 CNY/t. (3) The incentive effect of the increase of the industrial water price on the profits of CCS-EWR projects is not significant. CCS-EWR technology has better application prospects in China under the dual constraints of carbon-neutral targets and water shortages, and more policy support is required for its deployment.