A hectare of Morowali forest carries three different prices, and the distance between them is Indonesia's most consequential valuation problem

Three numbers were put beside each other in a discussion of nickel producing regions reported on 28 August 2026, and the distance between them is the substance of the story.

A hectare of forest is valued at Rp395,000 in the administrative calculations that govern compensation. Rehabilitating a hectare of forest costs between Rp30 million and Rp50 million. And the forest of Morowali district, taken as a working ecosystem, produces economic value of Rp2.81 trillion a year.

Those are three prices for the same asset, and they differ by orders of magnitude. Moh Ahlis Djirimu, Professor of International Economics at the Faculty of Economics, Tadulako University, put the first figure in terms that are hard to improve on. Indonesian forest, he observed, is valued at about the price of two pairs of shoes from a street stall.

This is not primarily a story about damage. It is a story about a measurement that has fallen out of step with what is being measured, and about a country that already owns the tools to fix it.

What the fuller valuation actually finds

The Rp2.81 trillion figure comes from a valuation of Morowali's forest carried out by Aksi Ekologi dan Emansipasi Rakyat, working with academic researchers. It is not an advocacy number. It was produced under Ministry of Environment Regulation No. 15 of 2012, the national guideline for the economic valuation of forest ecosystems, using ArcGIS spatial overlay analysis combined with market and benefit transfer methods, and covering direct benefits, indirect services, existence value, and option and bequest values.

The result exceeds Morowali's own 2023 revenue realisation of Rp1.94 trillion by 44.61 percent. The district's forest, valued properly, is worth more each year than the district government collects.

The spatial detail is specific. Some 133,256.84 hectares of forest sit inside nickel concessions, of which 97,790.78 hectares is primary forest, 35,200.30 hectares secondary dry forest, and 265.79 hectares mangrove. Seventy nickel mining permits cover 241,806.79 hectares, around 35 percent of Morowali's administrative area. The forest absorbs more than 1.1 million tonnes of carbon dioxide equivalent a year. Of the total economic value, Rp1.07 trillion a year already lies inside concession boundaries, with a further Rp568 billion a year exposed if concessions extend.

Akhmad Fauzi, Professor at IPB University, framed the underlying principle directly. Natural resources cannot be treated merely as factors of production. They have to be understood as natural capital.

An asset recorded at Rp395,000 a hectare and an asset that costs Rp30 million a hectare to restore cannot both be correctly priced. One of those numbers is doing work it was never built to do.

Why the gap has fiscal consequences

The measurement gap is not academic, because these numbers feed real transfers. Research by Professor Djirimu with a team drawn from four universities compared what the region receives against what it carries. Industrial taxes remitted from the Morowali and North Morowali mining areas run to around Rp18.56 trillion a year, while village fund allocation for the twelve villages of East Petasia sub district totals Rp4.25 billion, about 0.02 percent of the tax generated. Central Sulawesi's revenue sharing receipt has been cited at Rp10 billion. A simulation of smelting activity across 2021 to 2024 put ecological cost at around Rp20 trillion against roughly Rp2 trillion in state revenue over the same window.

Those ratios are contested and depend heavily on method, and Sirkularium would not present any single one of them as settled. What is not contested is the direction. When the environmental side of the ledger is priced at Rp395,000 a hectare, it will always appear small next to a tax figure in the trillions, regardless of what the forest actually does.

Chitra Retna of Article 33 Indonesia made the sharper point about what to measure. The test is not whether the benefit shared with a region grows larger. It is whether the distribution of that resource rent changes the direction of the region's development.

Indonesia already holds the instruments

The encouraging part of this picture is that nothing new has to be invented.

Permen LH No. 15 Tahun 2012 already sets out how to value a forest ecosystem, and the Morowali study demonstrates it produces defensible, auditable figures when applied with spatial data. Permen LH No. 7 Tahun 2014 already sets out how to price ecological damage, environmental economic loss, and recovery cost, and courts have used it to reach concrete rupiah judgments. AMDAL establishes the environmental baseline at permitting. Reclamation guarantee funds hold money against future obligations, and Indonesia has been working on a national reclamation cost standard. GIS and remote sensing make land cover change and disturbance footprint measurable on a repeatable schedule at low marginal cost.

Government is also moving on the governance frame. The Coordinating Ministry for Economic Affairs has been preparing a Presidential Regulation covering critical and strategic minerals, drawing in environmental and social parameters alongside the 47 critical and 22 strategic minerals the government has designated, and Kusti Erawati of the ministry has pointed to that work. Alongside it sit the mineral and strategic commodities exchange announced for January 2027 and the export governance system now running through Danantara Sumberdaya Indonesia. Each of these exists to make a number that was previously assumed into a number that is verified.

The environmental column is the one that has not yet been brought into that programme.

Sirkularium's view

Indonesia has spent 2026 rebuilding how it prices what it takes out of the ground. Benchmark price formulas were rewritten. Production quotas were tied to royalty contribution. An exchange was announced to establish a domestic reference price. An export single window was built to catch under invoicing. That is a serious and coherent body of work, and it deserves to be recognised as such.

The same discipline now needs to reach the land. Three observations for government and public institutions.

First, the administrative per hectare figures should be revised against real rehabilitation cost. A compensation value of Rp395,000 set against a restoration cost of Rp30 million to Rp50 million is not a policy choice about how much to charge. It is an out of date input. Updating it requires no new law, only a recalculation under methodology that already exists.

Second, total economic value should enter the permitting and revenue sharing calculation rather than sitting in studies alongside it. The Morowali work shows a district level TEV can be produced under the national guideline with GIS and published data. Commissioning that for each major producing district, on a fixed cycle, would give both central and regional government a defensible figure to plan against.

Third, regions carrying the environmental load are the ones least equipped to measure it. Central support for periodic, independently verified valuation in Central Sulawesi, North Maluku, Southeast Sulawesi, and West Nusa Tenggara would be a targeted intervention with a clear beneficiary and a modest cost.

For operators, the reading is practical rather than adversarial. The administrative figures that currently understate environmental value also leave companies exposed, because a number that low invites challenge and offers no defence when one arrives. A company holding its own rigorous, independently verified valuation of the land, water, and ecosystem position of its concession, built from GIS and ground data under national methodology, is in a far stronger position with the Ministry of Environment and Forestry than one relying on a figure everyone already knows is wrong.

What to watch next is whether the critical minerals Presidential Regulation carries an ecosystem valuation requirement, whether per hectare compensation values are revised toward rehabilitation cost, and whether any producing district publishes a total economic value figure as part of its own planning documents.