Valuation Study

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Damages of Fire and Haze

Attributes

Medium: Land

Country: Indonesia

Analytical Framework(s): Economic Analysis

Study Date: 1997

Publication Date: 1998

Major Result(s)

Category Resource/Environmental Good IDR, million currency units
(1997)
IDR, million currency units
(2014)1
USD, million currency units
(2014)2
Fire-related Timber 1,234,250.00 3,593,592.93 292.22
Fire-related Agriculture 1,176,000.00 3,423,994.56 278.43
Fire-related Direct Forest Benefits 1,762,500.00 5,131,624.50 417.29
Fire-related Indirect Forest Benefits 2,692,750.00 7,840,103.19 637.54
Fire-related Capturable Biodiversity 75,000.00 218,367.00 17.76
Fire-related Fire Fighting Costs 29,250.00 85,163.13 6.93
Haze-related Short term health 2,310,000.00 6,725,703.60 546.92
Haze-related Tourism 176,000.00 512,434.56 41.67
Haze-related Other 44,000.00 128,108.64 10.42

About the Inflation Adjustment: Prices in Indonesia (IDR) changed by 191.16% from 1997 to 2014 (aggregated from annual CPI data), so the study values were multiplied by 2.91 to express them in 2014 prices. The study values could be expressed in any desired year (for example, to 2025) by following the same inflation calculation and being sensitive to directional (forward/backward) aggregations using your own CPI/inflation data.

Study Note: EEPSEA is a development cooperation program supporting research and training in environmental economics in 10 SE Asian countries. Established in 1993, its current sponsors include Canada (IDRC & CIDA), Sweden (Sida), MacArthur Foundation, and the Foreign Affairs Ministries of Denmark, Holland, and Norway.WWF is dedicated to protecting the world's wildlife and wildlands. The largest privately supported international conservation organization in the world, WWF has sponsored more than 2,000 projects in 116 countries over the past 36 years. WWF directs its conservation efforts toward protecting endangered spaces, saving endangered species, and addressing global threats.

Study Details

Reference: Economy and Environment Program for Southeast Asia (EEPSEA) and the World Wide Fund for Nature (WWF). 1998. The Indonesian Fires and Haze of 1997: The Economic Toll. EEPSEA Research Report, No. 1998-RR.

Summary: This paper presents findings from a study completed in May 1998 by WWF-Indonesia and EEPSEA to assess the economic value of damage caused by the 1997 fires and haze. The work was carried out by EEPSEA and WWF staff and academic researchers in Indonesia, Malaysia and Singapore, with methodological advice from international experts. The study covers the period August - December, 1997. A book-length version of this report ("Indonesia's Fires and Haze: The Cost of Catastrophe") was published by ISEAS and IDRC in August, 1999. Copies can be obtained ISEAS from or IDRC.

Site Characteristics: Fires and haze affected 5 million hectares in Indonesia and 70 million people throughout the region.

Comments: A Capturable biodiversity refers to the potential income lost to Indonesia from international conservation expenditures i.e. the amount that international agencies and NGOs have shown they are willing to pay to conserve tropical forests. It does not reflect the intrinsic value of species whose extinction has been hastened; the potential value of ecotourism or internationally marketed pharmaceuticals; the human cultural diversity of indigenous forest-based cultures; or other benefits too difficult to value. These losses are shared by Indonesia and the rest of the world.

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