Willingness to pay estimation of microhydro power plant user for hydrological ecosystem services in North Buton Wildlife Reserve Area

Abstract

One of community empowerment programs implemented by the Ministry of Environment and Forestry is the construction of a Micro Hydro Power Plant (MHP) for communities around forest areas. One of the environmental services provided by forests is hydrological benefit in the form of water source to drive MHP turbines. The existence of the perceived benefit will trigger public awareness to participate in preserving forest functions. Rewards for benefits generated from forests can be manifested through efforts to conserve water resources jointly between the community and the party that manages the area. In this regard, this research is conducted to determine the willingness to pay of MHP users around the North Buton wildlife reserve to maintain the MHP unit and support forest resource conservation activities. This study employes the contingent valuation method (CVM) to calculate the willingness to pay value. The results show that MHP users are willing to pay IDR 2,611.- for each kWh of electric power. The willingness to pay is influenced by the amount of electricity consumption and the amount of income of the respondent. If it is calculated based on the volume of water used, the total willingness to pay for environmental water service is IDR 414.-per 1 liter per second.