Economic valuation of water services related to protected forest management: a case of Bukit Batabuh in the RIMBA corridor, Central Sumatra, Indonesia

Abstract

The context of daily household needs of rural communities, particularly the needs for water, often remains insufficiently considered in tropical forest management as it is facing an important decision-making trade-off between profit and preservation. We conducted a choice experiment study to elicit preferences of the rural community members in Central Sumatra, Indonesia, who perpetually depend on the ecosystem services of tropical forests. To inform a spatial planning policy for the protected forest, we focus on the valuation of water services in the protected forest area of Bukit Batabuh where the surrounding communities living rely on upstream watershed and water storage management. We find that those communities have a strict preference for improving forest water provisioning services, compared to the current situation (status quo), with the estimated aggregate benefit of non-commercial use ranging between USD 2.71 million and USD 2.47 million per year for each of the options of (1) maintaining and enhancing water storage, (2) rehabilitating forest in the upper watershed or (3) restoring the riparian forest. This study also identifies preference attributes, such as water storage capacity, water scarcity and water turbidity which can be used in other tropical landscape contexts in Indonesia and beyond.