On Thursday, September 30, the Department of Economics, Faculty of Economics and Business, Universitas Airlangga held a guest lecture on the topic “Watershed Conservation” with the title “Payment for Environmental Services: Willingness to Pay for Watershed Preservation” . The guest lecture was part of the Guest Lecture Series in the Inbound Staff of the Department of Economics, FEB UNAIR, presenting a speaker who is a Professor from the Department of Economics, Ateneo de Manila University , namely Rosalina Palanca-Tan, PhD. The speaker presented her research online via Zoom Meeting with the research title “Payment for Environmental Services (PES) The Case of The Cagayan De Oro River Basin Mindanao, Philippines”.
Presentation session by Dr. Rosalina Palanca-Tan, PhD, at the Guest Lecture of the Department of Economics, FEB UNAIR
on September 30, 2021. (Photo: SS Zoom).
In the presentation session, Prof. Roalina Palanca-Tan also emphasized that, “Most participants are already familiar with the term payment for environmental services (PES), which is a scheme to generate financial resources to fund and reward initiatives to restore and conserve ecosystems.”
Furthermore, the research objective is to estimate the economic value of all the benefits that can be derived from a sustainable aquatic environment. Specifically, the research location, in accordance with these conditions, is the Cagayan de Oro River Basin.
"This research focuses on stakeholder group , namely households living around the Cagayan River, more precisely in Cagayan de Oro City," said Prof. Rosalina.
Prof. Rosalina further explained the importance of calculating the estimated benefits. The reason is that the estimate will serve as the basis for the amount of funds that can be disbursed under the PES scheme. In real terms, this can be seen in the lives of residents living downstream who benefit from the natural resources, such as food supplies (fish), flood control, a stable supply of clean water, recreational activities (whitewater rafting and others), fresh air due to carbon absorption by the forest, and biodiversity.
There is a technique in this research that uses individual respondents' statements or opinions regarding their preferences among a set of options. This technique is the Contingent Valuation Method (CVM) , which is used to calculate estimated profits.
Prof. Rosalina explained that, "CVM is a non-market . In economics, if we want to determine the profit derived from a good or service, we must look at the market. This is because in the market, every good has a market price. Therefore, a non-market to measure profit."
By directly asking their Willingness to Pay , various types of benefits can be classified into use values and non-use values , explained Prof. Rosalina. This makes it easier to estimate the benefits residents derive from the surrounding ecosystem and thus determine the amount of funding that should be allocated to maintaining a beautiful environment.