Valuation Study

Cost of Implementing Forest Management Options

Attributes

Medium: Land

Country: Indonesia

Analytical Framework(s): Other

Study Date: 2008

Publication Date: 2009

Major Result(s)

About the Inflation Adjustment: Prices in Indonesia (IDR) changed by 33.16% from 2008 to 2014 (aggregated from annual CPI data), so the study values were multiplied by 1.33 to express them in 2014 prices. The study values could be expressed in any desired year (for example, to 2024) by following the same inflation calculation and being sensitive to directional (forward/backward) aggregations using your own CPI/inflation data.

Study Note: This research lists some alternative policy options for a controlling system to improve forest fire prevention and mitigation. The research assessed the options based on criteria to eliminate weaknesses in current policy. Methods that were used include literature review, stakeholder consultation, economic valuation, and workshop and focus group discussion.

Study Details

Reference: Luthfi Fatah, Udiansyah. 2009. An Assessment of Forest Management Options for Preventing Forest Fire in Indonesia. EEPSEA Research Report, No. 2009-RR9.

Summary: Manageable and controllable fires can be profitable tools that help human beings deal with their environment. However, when fires are unmanaged or uncontrollable they can be a potential threat to sustainability. Almost every year in Indonesia, from February to March and from August to October, forest fires take place. Numerous policy recommendations have been made to national and regional governments, and many initiatives have been taken by the government and other stakeholders. However these efforts have proved to be ineffective and satisfactory results are still a long way off. The problems of fire and smoke haze keep coming back year after year, particularly during the periods of prolonged drought. Current policies have some weaknesses and the suspected root cause of most of the problems is the absence of a controlling system. The study results indicate that recommended alternative policy options for improving land and forest fire prevention and mitigation, as well as for filling gaps in existing policy are: improving policy implementation in the field (this requires funding of an additional 65 percent on the top of the existing budget or 4,905 million rupiahs); implementing a reward and punishment system (50 percent or 3,773 million rupiahs); and establishing an institution to monitor and record stakeholder compliance and violation (an additional 70 percent or 5,282 million rupiahs). The policy implication of these research results is that the government of Indonesia may need to reorganize itself in order to ensure a significant and equal commitment at both central and local government levels to ensure appropriate responses when land and forest fires start. This is the first step. The second step is for all levels of government to approach the parliament and the wider stakeholders in their locations to raise awareness and lend support via the allocation of an adequate budget. The third step is the implementation of all three options high-priority highlighted in this study (see above). Of the three options, it would probably be best to first establish institutions responsible for the monitoring and recording of stakeholder compliance and violation. Out of all of the recommended steps, there is one very important point that needs to be taken into consideration for the successful implementation of the options - all stakeholders have to work together to stop bribery, corruption and collusion from taking place. One effective way for this to happen would be to promote transparency and to give communities some kind of monitoring capacity.

Site Characteristics: Indonesia experienced the most serious forest fires in 1997-8. The main contributor to this problem was the severe El-Niño, which induced drought. The result was catastrophic. Many Indonesian cities were covered in a blanket of haze. Visibility was limited because the density of the smog was high so vehicles moved very slowly. Many members of the population experienced health problems such as coughs, sore throats, stinging eyes, and difficulty in breathing. Fires, when manageable and controllable, can be profitable tools to help human beings deal with their environment. However, when fires are uncontrollable they are a potential threat to the sustainability of the environment. Fires can affect ecosystems, contribute to carbon emissions, and have a negative impact on biodiversity (Tacconi 2003). By early 1998 nearly 10 million ha had been affected by Indonesia's forest fires, incurring damage of almost US$10 billion. Smoke from these fires shrouded much of Southeast Asia in haze for months (Barber and Schweithelm 2000). Large areas were burned, producing persistent haze over large areas of Sumatra and Kalimantan. These unwanted fires are recurrent - they happen every year during the dry season. Normally the haze dissipates in September when heavy rains extinguish the fires, but this was not the case in 1997. In 1997 the rains failed, the fires intensified, and the haze thickened and spread to neighbouring countries. Haze reached Malaysia and Singapore in July, and air quality deteriorated steeply in September. The haze covered an area of 1 million km 2 , affecting about 70 million people. The haze prompted an outburst of complaints from neighbouring countries that drew global media attention. Land, air, and sea transport accidents were linked to the poor visibility caused by the haze, including a ship collision in the Straits of Malacca that killed 29 people. Hospitals and clinics were filled with people seeking treatment for respiratory, eye, and skin ailments. Schools, businesses and airports closed, and tourists stayed away, inflicting economic hardship on the region.

Comments: The scope of forest management policy is wide so this research will focus on an assessment of policy options that address the root causes of forest fires. The research will highlight weaknesses in current government policy and try to formulate alternative policies based on examples from other countries and from the ideas of key informants. To help sharpen the research results a study case was conducted in Riau Province. Riau is the province that has the greatest number of forest fires - based on data recorded by NOAA during 2001-06, on average, Riau had 8,839 hotspots. Central and West Kalimantan followed Riau with 7,080 and 5,285 hotspots respectively. Although the case study was conducted in one province only, the problems of forest fires are similar regardless of which province or forest area is affected. There is not much variation in the causes, impacts and values, either for benefit or loss, that arise from using fires for land clearing or other activities. The key informants were not only from Riau Province and the institutions in Riau that relate to forest management and forest fire problems, but also from relevant institutions at a national level. Therefore, suitable policy options for a controlling system to deal with forest fires that resulted from this study apply to Indonesia as a whole.

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