Financial and ecological compensation based on willingness to accept in sand mining of Progo River downstream

Abstract

Sand mining which occurs massively along the Progo River causes environmental degradation and infrastructure damage. Financial and ecological compensation funds will be used to compensate for the losses suffered by the community and efforts to conserve the environment. The purpose of this research is to estimate the value of compensation to be willing to accept or willingness to accept (WTA) by the community affected by sand mining in Banaran and Poncosari villages, also the spatial variations in WTA in Banaran and Poncosari villages. We established an ecological compensation accounting system based on respondents’ willingness to accept (WTA) with Contingent Valuation Method (CVM). The results shows respondents in Banaran Village has the highest average WTA value of IDR 271, 142 per month. Meanwhile, the average value of WTA in Poncosari Village is IDR 186, 818 per month. This value illustrates how people extremely feel disadvantaged by the degradation in the quality of the environment that occurs in their residence. WTA value obtained is influenced by the subjectivity of respondents in assessing environmental conditions and can be influenced by income and some economic characteristics. With this compensation, environmental balance is expected to be maintained without neglecting the utilization of natural resources.