Valuation of Environmental Services of Catchment Forests Within Baubau Wonco Watershed

Catchment forests cover a total of 2.750, 11 Ha. This is about 31,85% of the total area of Baubau Wonco watershed. This forested land provides both tangible and intangible benefits of which some are perceived as environmental services. However, it has encountered high rate of deforestation and forests degradation [7]. A well managed catchment forests can bring about advantages to a wide range of stakeholders, normally far away from the forests in the form of water for domestic use, agriculture, industry, and preventing from flooding, erosion and landslide hazards. To this view, it is a logical assumption that these various stakeholders who are mostly living in the downstream area should provide costs for a good forest management as incentives to the local community who mostly occupy the upstream area. Therefore, the need of a model that regulates the upstream and downstream mechanism should be explored. The research is planned to be conducted for two years. The first year research has been carried out from July to October 2015. The study employed various methods of data analysis. Those are as follow: (i) Hedonic Price is used for estimating economic value of water for domestic and industrial use; (ii) Productivity approach used for analyzing economic value of water for agricultural use; (iii) Willingness to Pay (WTP) is used for analyzing economic value of catchment forests to preventing from erosion, flooding and landslide hazards. The results of the first year research show that the total volume of water domestic consumption reachs 6.163.488,50 m 3 year -1 , which is used by 18.950 households with the economic value obtains of Rp. 40.062.668.750 year -1 , while the economic value of water for agricultural use achieves Rp. 30.199.167/ha year -1 . This research will be continued to the second year study to (i) estimate the economic value of industrial water, (ii) to analyze the Total Economic Value of hydrological environmental services provided by catchment forests of the watershed area, and (iii) to develop a model that can facilitate downstream-upstream mechanism of a payment for the hydrological environmental services.