Economic loss value from land and forest fires in oil palm plantation in Jambi, Indonesia

Peat fires have always become a problem for the country and result to enormous negative impact and losses to the environment and surrounding community. To clear the issues, we assess the economic valuation of peat fires in palm oil plantation in Tanjung Jabung Timur Regency, Jambi Province, Indonesia. Here, we focused on the economic losses from air pollution, environmental/ecological damage, and benefit loss of goods and services due to peat fire on 2002-2014. These economic losses are calculated based on Regulation of Minister of Environment No. 7/2014. We found the enormous total economic loss due to peat fire of more than IDR 4.46 trilion. Benefit loss of goods and services accounts for more than 50% of the total economic loss, followed by the loss from carbon emission. The area affected by the fire in the large scale-company owned palm oil plantation is found more than 29 times larger than the smallholder, but the impact/ha for the smallholder is more than twice of that in smallholder palm oil. These high lost due to peat fire on the oil palm plantation strongly suggest to escalate the fire prevention effort in the palm oil plantation to avoid further devastating peat fire and severe economic loss.