Sekolah valuasi uncovers nature’s invisible economic value

In our world, where market system is the norm, market prices have been guiding economic, business and policy decisions. More often than not, the signals sent through market prices are distorted and misguide economic agents into thinking that resources with little or without market prices as things with little or even without values. This often leads into disasters.

Nature has been providing invaluable services to us, yet these services are not reflected into market prices. Prof. Robert Costanza of the Australian National University recently estimated that nature has been providing Indonesian people US$ 1,660 billion worth of ecosystem services, equivalent to 76% of its GDP. However, these values are invisible to the existing system of market economy, these are often ignored by economic agents. As a result, environmental destruction often lead to dire and fatal consequences. The recent fatal case of flash flood in Garut regency, near Bandung, for example, was caused by the conversion of the forest into food crops agriculture. No signal is visible informing the valuable function of forest as flood protection.

The invisibility of nature’s economic value need to be uncovered not only for conservation purposes but to avoid fatal environmental disasters. Despite little applications in many economic decisions, the methodology to put prices into nature’s services have been well advanced in economics. Sekolah Valuasi or School of Valuation is an initiative to educate society on the importance of uncovering the economic invisible value of nature.

Sekolah Valuasi has been conducted three times (Now is the third phase) and is organized by the Economy and Environment Institute (EEI) INDONESIA in collaboration with SDGs Center of Universitas Padjadjaran. Its third phase was attended by more than 25 participants from various background including private sectors, NGOs, government agencies and academics. Participants coming from various parts of Indonesia including Sulawesi, Sumatera, East Nusa Tenggara, and many others regions of Indonesia. Sekolah Valuasi III was held from 29 September to 1 October 2016 in Bandung.

In Sekolah Valuasi, participants learn the conceptual framework of environmental valuation in the context of market economy, study various tools of valuations including contingent valuation method, choice modeling, hedonic property values and many other standard valuation tools. Teachers of Sekolah Valuasi are experienced researchers and practitioners of valuation with years of international experience and are all research associates at EEI-INDONESIA and UNPAD’s SDGs Center.

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