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Local Watershed Payments

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Local Watershed Payments1

Lombok Island, Indonesia

The Rinjani forest is located in the North of Lombok Island, part of the Indonesian province of West Nusa Tengarra located to the East of the island of Bali. Rinjani’s savanna, semi-deciduous, mountain evergreen and tropical evergreen forests hold the endangered Ebony Leaf monkey, and many of Nusa Tengarra’s endemic bird, mammal, reptile and plant species. Nearly 3 million people depend on the Rinjani watersheds for their water supplies and many of the local Sasak people still depend on the forest resources for a significant part of their livelihoods.

The Rinjani forests have been under significant pressure over the last decade, and the Provincial Planning Board of West Nusa Tengarra reported in 2002 that approximately 30% of the Rinjani area had been deforested in the previous decade. The principle causes of this deforestation include the issuing of logging permits, and illegal logging and encroachment. The removal of the forest cover has impacted on the vital water supplies from Rinjani, leading to flooding, soil erosion, and unstable water supplies. For example, around 43% of the large springs surrounding the Rinjani forest have dried up during the last decade.

An economic evaluation was performed by the Provincial Planning Board, Forestry Service Unit, Mataram University and WWF in order to evaluate the economic benefits of the Rinjani forests and to explore the possibilities of payment for environmental services schemes that could support forest management and reverse deforestation.

The valuation found that the watershed services of the Rinjani forest underpinned the US$50 million per year value of the irrigated agricultural sector in the Rinjani area and US$14 million per year for domestic water use. The forests also provided significant economic benefits in the form of the international tourist visitors and the provision of water to local industries. The valuation also assessed the willingness of residents of Lombok to pay to conserve the Rinjani forests. It found that local people favoured support for forest conservation through the payment of access charges to visit protected areas and additional payments placed on the value of products and services sourced from Rinjani, for example mineral water.

The findings of the valuation inspired the district governments in Lombok to develop regulations on environmental services. WWF has been working with local NGO Konsepsi and the local water supply company to establish a payment scheme in the Segara River basin in the north-east of the Rinjani Forest. 95% of the 43,000 households who receive water from the PDAM Mataram water company in Mataram City at the foot of the Segara River have agreed to a special payment of up to US$0.60 per month towards preservation of the watershed forests at the head of the Segara River.

The funds will be transferred to an independent body set up by WWF and partners with agreement from West Lombok District Council and Mataram Municipality. The independent body will be responsible for managing the fund to implement conservation and development projects with the communities in the Rinjani Forest at the head of the Segara River, with activities to include forest landscape restoration, social services and the provision of public facilities.

The economic valuation played an important role in making the government of the West Nusa Tengarra province aware of the watershed and eco-tourist values of the Rinjani Forest. It encouraged a shift in policy away from logging of the forest towards support for the provision of environmental services. The valuation allowed for the identification of the groups who would be willing to pay towards watershed conservation, allowing for the design of mechanisms for increased income to be channelled into forest restoration, and the provision of alternative livelihoods for poor local communities.

  • The establishment of payment schemes takes time, preparation and partnerships. Without these, schemes can become a potential source of conflict, whereas a co-operative approach can reduce time and costs. Awareness raising of the scheme needs to be continuous and systematic.

  • Combining economic valuation with campaign activities can be an effective tool to influence government policy.

  • A broad spectrum of stakeholders should have a basic understanding of freshwater ecosystems.

  • Effective monitoring and evaluation should be part of any payment for environmental services schemes; these help to re-design and change the process as necessary.

Contact: Tri Agung

Project Manager


Kantor Taman A9, Unit A-1

JL. Mega Kuningan Lot. 8.9/A9

Kawasan Mega Kuningan

PO Box 5020 JKTM 12700


+62 21 576 1070

1 WWF. The Green Buck, written by Tom Le Quesne and Richard McNally, WWF-UK, and produced by The WWF Sustainable Economics Network

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