Economic Valuation

In the consideration of Act No. 32 of 2009 on Environmental Protection and Management, it is stated that the environmental quality, which gradually decreases, has threatened the continuance of our life . Thus, environmental protection and management are required to be conducted seriously and consistently by all stakeholders.

Resource economic valuation, using the approaches of Impact Analysis, Partial Valuation, as well as Total Valuation, is an assessment of environmental value in the form of monetary value especially related with oil and gas field development.

On the other sides, this value is very important to be known related with the scheme of environmental management to be carried out. Such economic value can be a basis for the initiator to conduct the environmental recovery or to answer if there are any claims from the community related with the potential damage.

In general, the loss of environmental economic value is a burden for the affected community, however, the initiator is hopefully able to identify the amount of lost value due to the activities. Furthermore, it becomes a responsibility of initiator that is manifested in the scheme of environmental management. Thus, the burden of environmental damage due to the activities does not become social cost, which is indemnified by the community, so the community’s welfare does not decrease due to the presence of development activities in oil and gas fields.