A Critical Evaluation of Fifteen Years of Payment for Environmental Services on the Lombok Jangkok Watershed and the Case for Decommodified Watershed Governance

Diemas Sukma Hawkins

Faculty of Postgraduate Studies, Universitas Mataram
Rinjani-Lombok UNESCO Global Geopark and Biosphere Reserve Management Agency

Abstract

In 2009, a payment for environmental services (PES) scheme was established on the Jangkok watershed in Lombok, West Nusa Tenggara, channelling a monthly environmental-services levy from roughly forty thousand customers of the Mataram–West Lombok water utility toward the conservation of upstream water sources in the Sesaot forest. Marketed by its sponsors as a regional success story, the scheme has now operated for over fifteen years against a documented backdrop of continuing hydrological deterioration. This article offers a critical evaluation of that experience and argues that it illustrates a structural limitation intrinsic to market-based watershed governance rather than a remediable defect of implementation. Drawing on critical international political economy, ecological-Marxist theory, and the political ecology of conservation, the article advances three claims. First, the dominant policy framing of the watershed as natural capital rests on a commodity-fetishist abstraction that obscures the metabolic relation between upstream stewardship and downstream accumulation. Second, the Ostromian common-pool-resource paradigm, while the most serious rival to a critical reading, underweights the structural-class asymmetry between subsistence agroforesters and a corporatised commercial water utility, and therefore cannot by institutional design alone reconcile a survival logic with an accumulation logic. Third, the prevailing PES architecture does not abolish but rather monetises and institutionalises the metabolic rift, converting an ecological contradiction into a permanent low-grade revenue transfer that bypasses the principal beneficiary of extraction. In response, the article develops a programmatic alternative: PES reconstituted as a transitional, decommodified instrument resting on public-trust ownership of the watershed, opportunity-cost-plus compensation to upstream stewards under secure cooperative tenure, mandatory and progressively scaled downstream contribution, and an autonomous publicly accountable basin fund. The argument is positioned as a contribution to island-systems scholarship, where the spatial compression of upstream and downstream within a single small catchment renders the contradiction unusually legible.

Introduction

Few policy instruments have travelled as far or as fast through the conservation imagination of the global South as payment for environmental services. Premised on the deceptively simple proposition that environmental degradation persists because the services rendered by intact ecosystems are unpriced, and that pricing them will realign private incentives with collective ecological interest, PES has become a near-default prescription for watershed management across Southeast Asia. The instrument carries an unusual rhetorical advantage: it promises ecological repair without confronting the structure of property or production, offering instead a technical correction to a market that has merely failed to form. It is precisely this advantage that this article seeks to interrogate.

The Jangkok watershed in Lombok, West Nusa Tenggara, presents an unusually instructive case, because it is not a hypothetical site awaiting a PES intervention but a basin on which such a scheme has operated for more than fifteen years. In 2009, with brokerage from a major international conservation organisation, an agreement was reached with the regional water utility serving Mataram and West Lombok under which its customers would pay a small monthly environmental-services levy earmarked for the protection of the upstream water sources on which the city depends (WWF Indonesia, 2018). The scheme has been presented, by its sponsors and in subsequent regulatory advocacy, as a decade-long success and a model for replication elsewhere in Indonesia (Article 33 Indonesia, 2016). Yet over the same period the hydrological condition of the basin has continued to deteriorate, and as recently as 2025 the utility was compelled to warn its customers against consuming raw water drawn from the very upstream springs the scheme exists to protect, following turbidity episodes traced to the catchment (Suara NTB, 2025).

This conjunction—an instrument acclaimed as successful, operating over a basin that has nonetheless declined—is the empirical puzzle that motivates the article. The central argument is that the conjunction is not paradoxical but diagnostic: it is what one should expect when an instrument designed to monetise an ecological relation is deployed within, and on the terms of, the accumulation dynamic that produces the degradation in the first place. The article therefore reads the Jangkok scheme not as a well-intentioned programme requiring better calibration but as a revealing instance of what Fletcher and Büscher (2017) term the PES conceit: the tacit acceptance of neoliberal capitalism as simultaneously the cause of and the remedy for ecological crisis.

The contribution is developed in three movements, each of which corresponds to an objection that a sceptical reader would rightly press. The first movement concerns theory and rivalry. The most formidable alternative to a critical reading of the Jangkok scheme is not market fundamentalism but the common-pool-resource tradition associated with Elinor Ostrom, which has shown, against the pessimism of Hardin, that communities can govern shared resources sustainably without recourse to either privatisation or the state. The article concedes the force of this tradition and concedes, further, that Ostrom modelled upstream–downstream asymmetry directly. It argues nonetheless that her framework underweights a different order of asymmetry—the structural-class difference between a subsistence appropriator and a capitalised one—which no design principle can dissolve. The second movement concerns prescription. A critique that ends in diagnosis is, for policy science, an abdication; the metabolic-rift literature has long been vulnerable on precisely this point. The article therefore develops a concrete programmatic alternative grounded in the theory of decommodification (Gerber & Gerber, 2017). The third movement concerns evidence, and here the Jangkok case is unusually well served by an existing body of Indonesian-language hydrological and economic scholarship that allows the argument to be anchored in the basin’s measured condition rather than asserted.

A word on the venue and the framing is warranted. To locate this argument within island-systems scholarship is not a matter of convenience. Islands compress the spatial separation of upstream provision and downstream consumption that, on continental river systems, may span hundreds of kilometres and multiple jurisdictions. On Lombok, the forested headwaters of the Jangkok and the urban taps of Mataram lie within a single small catchment and a single hydrological budget. This compression renders visible, and renders urgent, a contradiction that larger systems can defer or displace. The island is not merely a setting for the argument; it is the condition under which the argument becomes legible.

Literature Review

2.1 Management of the Jangkok Watershed under the 2009 Scheme

The Jangkok river rises in the western flank of the Rinjani massif and descends through the Sesaot forest before crossing the lowlands of West Lombok and the city of Mataram to the Lombok Strait. Its upper catchment supplies clean water to West Lombok Regency, the city of Mataram, and parts of Central Lombok, and its springs are the principal raw-water source for the regional utility (Saidah & Hanifah, 2020). The upstream forest is not pristine wilderness but a worked landscape: much of the Sesaot area is managed by smallholder forest farmers under Indonesia’s community-forestry (Hutan Kemasyarakatan, or HKm) tenure arrangement, in which households hold use rights over state forest land conditional on its conservation (Saidah & Hanifah, 2020). This detail matters for what follows, because it means the upstream stewards are not informal squatters to be regularised but holders of a recognised, if circumscribed, tenure that a reformed scheme could build upon.

The 2009 scheme was, in its essentials, a hydrological PES of the collective, utility-mediated type common in Indonesia. Its sponsors report that approximately forty thousand customers of the utility were enrolled, paying a monthly environmental-services levy of around one thousand rupiah for households and two thousand rupiah for offices, of which seventy-five per cent was allocated to nature and community and twenty-five per cent to programme operations (WWF Indonesia, 2018). A contingent-valuation study of utility customers conducted in support of the scheme found a willingness to pay in the range of one thousand to five thousand rupiah, which places the levy that was actually adopted at the very floor of the demonstrated range. The structure is therefore one in which downstream households contribute a small, flat, voluntary surcharge, administered through the utility’s billing system, and disbursed upstream through intermediaries to support conservation in the Sesaot catchment.

Two features of this design will prove decisive for the evaluation, and both are worth stating plainly before any theoretical apparatus is brought to bear. First, the levy is flat: a thousand rupiah is paid alike by the modest household and, in the office tariff, by the commercial premises, with no scaling to volume abstracted or to ability to pay. Second, and more consequentially, the contributor is the customer, not the utility. The scheme collects from the downstream public a surcharge on the water they already purchase; it does not require the utility itself—the corporate entity that abstracts the raw resource and sells it on—to compensate the upstream stewards for the ecological service it extracts. As will be argued in Section 5, this second feature is not incidental. It is the precise point at which the scheme reproduces, rather than closes, the metabolic rift it was designed to address.

Theoretical Framework

3.1 Natural Capital, Commodity Fetishism, and the Metabolic Rift

The policy vocabulary in which the Jangkok scheme is justified turns on a single organising metaphor: the watershed as natural capital. In this framing, derived from ecological-economic accounting, the forest, the springs, and the regulating capacity of the catchment constitute a stock of capital that yields a flow of services—water regulation, filtration, sediment control—which can in principle be valued, depreciated, and maintained like any other productive asset. The rhetorical power of the metaphor is considerable, and its political utility is real: it allows conservationists to speak to finance ministries and utilities in a shared idiom of return on investment. But the metaphor is not theoretically innocent, and the critical tradition on which this article draws regards it with suspicion.

From a Marxian standpoint, the rendering of an ecological relation as a stock of capital yielding a priced flow of services is a paradigmatic instance of commodity fetishism: the social and metabolic relations between people and the rest of nature are made to appear as relations between things bearing prices (Gómez-Baggethun & Ruiz-Pérez, 2011). What the natural-capital framing abstracts away is precisely the relation that the framing of this article seeks to recover—the metabolism between the upstream labour of forest stewardship and the downstream conditions of social and economic life. The concept of the metabolic rift, developed from Marx’s account of the disruption of soil-nutrient cycling under capitalist agriculture and elaborated in contemporary ecological-Marxist scholarship, names the tendency of capital accumulation to draw down the ecological conditions of its own reproduction faster than those conditions can regenerate (Foster, 1999; Saito, 2017). Applied to a watershed, the rift is not a metaphor but a description: the upstream conversion of forest to short-cycle cash cultivation, the over-abstraction of flow downstream, and the loading of the river with domestic and industrial effluent together degrade the hydrological base on which the entire basin economy depends, even as that economy continues to grow in quantitative terms.

The two framings are not complementary, and it is important to insist on their incompatibility, because the dominant policy narrative on the Jangkok—as on many Indonesian watersheds—tends to invoke both at once without registering the tension. The natural-capital and market-failure framing holds that the problem is a missing price: internalise the externality, establish the payment, and the market will self-correct. The metabolic-rift framing holds that the externality is not an accidental omission but a constitutive feature of the accumulation process: capital must externalise ecological cost, because the internalisation of the full cost of reproduction is precisely what the competitive imperative forbids. On the first account, PES is the solution. On the second, PES—at least in its market-mimicking form—belongs to the very logic that generates the problem, and can at best manage the friction the rift produces while leaving its motor intact. The wager of this article is that the fifteen-year record of the Jangkok scheme adjudicates between these accounts, and adjudicates in favour of the second.

This places the analysis within the broader critical literature on the neoliberalisation of conservation. Fletcher and Büscher’s (2017) account of the PES conceit supplies the article’s central diagnostic frame, but the article does not adopt the more essentialising versions of that critique, which treat every payment scheme as a fully formed market and every market as uniformly neoliberal. As critics of that position have rightly noted, the overwhelming majority of real-world PES schemes are not competitive markets at all but state-administered or utility-administered transfers, with payments set by negotiation or opportunity cost rather than by price discovery (Van Hecken et al., 2015). This is an important qualification, and it is the article’s ally rather than its adversary. If actually existing PES is already largely a non-market transfer wearing market clothing, then the decommodified reform proposed in Section 6 is not a leap into the untried but a clarification and radicalisation of what the instrument, shorn of its market rhetoric, already partly is.

3.2 A domestic-level Coxian Reading of the Instrument

To hold the material, ideational, and institutional dimensions of the scheme together, the article adopts the analytical categories of Robert Cox’s critical international political economy, in which any social order is understood as a configuration of material capabilities, ideas, and institutions (Cox, 1981). The categories are well suited to a watershed. The material capabilities in question are hydrological: the flow regime of the river, the infiltration capacity of the forested catchment, the volume and quality of water reaching the abstraction points. The ideas are the framings examined above—above all the naturalisation of the natural-capital metaphor as policy common sense, such that the monetisation of the watershed’s services comes to seem not a contestable choice but the self-evident form that valuing nature must take. The institutions are the concrete arrangements of the scheme: the levy, the billing mechanism, the disbursement intermediaries, and the proposed basin-fund authority. The Coxian question is not whether the institution functions, but whose order it stabilises. A PES scheme that leaves the upstream survival economy and the downstream accumulation economy in place, mediating between them through a small transfer, may be read as a hegemonic institution in the precise sense: it secures consent to, and the continued reproduction of, the very configuration of forces that drives the rift. The reform proposed later in the article is, correspondingly, an attempt to reconfigure all three dimensions against that order rather than within it.

Ostrom’s Limits of Polycentric Governance

Any critical treatment of watershed governance that gestures toward collective, non-market solutions must reckon seriously with the work of Elinor Ostrom, for it is Ostrom, more than any other figure, who demonstrated that the binary between privatisation and state control is false and that communities can and do govern common-pool resources sustainably through self-organised institutions (Ostrom, 1990). To invoke the commons against the market, while ignoring the most rigorous theorist of the commons, would be a serious omission. The honest course is to treat Ostrom not as a foil but as the strongest rival, and to specify with care both what her framework establishes and where, for the present case, it reaches its limit.

It is necessary first to clear away a tempting but mistaken line of criticism. One might suppose that Ostrom’s framework, built on cases of relatively symmetric appropriators sharing a pasture or a fishery, simply fails to consider the upstream–downstream asymmetry that defines a watershed. This supposition is false, and a reviewer would be right to reject any argument that rested on it. Ostrom engaged spatial asymmetry directly and famously. The irrigation game she developed with Weissing formalises the strategic relation between an upstream actor with the opportunity for illicit over-extraction and a downstream actor who bears the burden of monitoring (Weissing & Ostrom, 1991). Her extensive empirical work on irrigation systems, particularly in Nepal, is organised precisely around the head-ender/tail-ender problem, in which those at the head of a canal can deprive those at its tail, and documents the diversity of institutions that farming communities have evolved to solve exactly this dilemma (Ostrom, 1992). The asymmetry of position, then, is not a blind spot in Ostrom’s framework; it is one of its central objects.

The limit lies elsewhere, and it is a limit of a different kind. What the Ostromian framework underweights is not asymmetry of spatial position but asymmetry of structural-class position—the difference between appropriators who are commensurable participants in a shared institutional field and appropriators who are constituted as fundamentally different kinds of economic agent by their location in the relations of production. This is not an idiosyncratic complaint but a well-established line in political ecology and in the critical literature on the commons. Ostrom, as sympathetic critics have observed, did not analyse how capitalism, enclosure, and class shaped the commons she studied; her framework legitimised self-governance but did not repoliticise institutional economics or open it to a structural analysis of how power operates (Clement et al., 2019; the point is developed at length in the political-ecology reception of her work). Historically, as these critics note, commons more often failed not because cooperation broke down but because they were enclosed and their commoners dispossessed by the powerful—a dynamic Ostrom’s design principles are not built to register.

Translated to the Jangkok, the distinction is concrete. The upstream appropriators are smallholder agroforesters operating under a survival logic, often without the security of tenure that would justify investment in a forest whose returns mature over decades; their individually rational choice to favour short-cycle cash crops over standing forest is driven by the economics of subsistence and by tenure insecurity, not by a failure of communicative reason that better institutional design could repair. The downstream appropriator of consequence is not a symmetric villager but the regional water utility, recently corporatised into a limited-liability public enterprise (Perseroda) and operating under a hard commercial mandate, alongside the capitalised commercial and industrial abstractors of the lowland. Between a survival logic and an accumulation logic there is no graduated-sanctions ladder that produces convergence, because the divergence is not a coordination problem internal to a shared field but a difference in the structural position of the parties. Ostrom’s polycentric institutions presuppose that, once the design is right, self-interested parties will find a sustainable equilibrium. Where one party is defined by the compulsion to externalise ecological cost, the asymmetry is not an input the institution can correct for; it is constitutive of the parties themselves.

The conclusion is therefore not that Ostrom is wrong but that her toolkit is necessary and insufficient. Necessary, because the upstream HKm farmer collectives on the Sesaot are exactly the kind of self-organising community institution her work illuminates, and any workable reform must build on them rather than over them. Insufficient, because the relation that most needs governing on the Jangkok—the relation between the upstream commoner and the downstream accumulator—runs across a class line, not merely a contour line, and the management of that relation requires an analysis of structural power that the common-pool-resource paradigm does not by itself supply. The reform proposed below accordingly retains the Ostromian insight at the upstream scale while embedding it in a structural settlement the Ostromian framework cannot, on its own, generate.

Monetising the Rift: Fifteen Years of Evidence in Jangkok

The evaluation of the Jangkok scheme proceeds in two steps. The first establishes the trajectory of the basin’s hydrological condition over the life of the scheme; the second identifies the structural feature of the scheme’s design that explains why a fifteen-year transfer has not arrested that trajectory.

5.1 The Hydrological Trajectory

The condition of the Jangkok has been assessed directly in the Indonesian hydrological literature, and the assessment is sobering precisely because it is not alarmist. Using the monitoring criteria of the Ministry of Forestry’s watershed-evaluation regulation, Saidah and Hanifah (2020) examined the river’s water-system condition over a seventeen-year period and found that, while the basin still rated as nominally good overall, its key indicators were deteriorating along a clear trend. The Flow Regime Coefficient—the ratio of maximum to minimum flow, where a higher value signals a river swinging more violently between flood and drought and therefore a catchment less able to retain and release water steadily—averaged 65.66 in the upstream reach but 333.63 downstream, the latter falling in the very high, that is critical, category. More telling than the levels is the direction of travel: the coefficient was rising at a rate of 7.72 per year upstream and 59.13 per year downstream, while the Annual Flow Coefficient rose and the Water Use Index declined across the period (Saidah & Hanifah, 2020).

These figures describe a catchment whose capacity to perform the very service the PES scheme pays for—the regulation of flow, the buffering of flood and drought—was measurably eroding even as the scheme operated. The mechanism is the standard one for tropical watersheds and is well documented across Indonesian river basins: the conversion of forest cover in the upper catchment reduces infiltration, increases surface run-off, sharpens the flood-drought swing, and raises sediment loads, with consequences that propagate downstream (the relationship is established for comparable Indonesian catchments and summarised in, e.g., the SWAT and flow-regime literature on Javanese basins). The 2025 turbidity episodes at the upstream springs, which compelled the utility to warn customers against consuming raw water, are not anomalies but symptoms of exactly this process: a catchment shedding sediment into the supply because its forested retention capacity has been compromised (Suara NTB, 2025).

5.2 The Structural Defect: A Transfer That Bypasses the Extractor

Why has a transfer running for fifteen years failed to reverse, or even to arrest, this trajectory? The answer favoured here is not that the payments were too small, although they were small, nor that monitoring was too weak, although it may have been. These are defects of calibration, and a defender of the instrument could always reply that the scheme was simply underfunded and under-enforced. The answer favoured here is structural, and it concerns who pays whom.

Recall the two design features identified in Section 2: the levy is flat, and it is collected from the customer rather than from the utility. The significance of the second feature becomes clear when one asks what, exactly, the downstream public is paying for. In the utility-mediated PES of this type, the customer pays a surcharge on the treated water they purchase, and that surcharge is routed upstream as conservation compensation. But the utility itself—the entity that abstracts the raw water from the catchment and sells it on—contributes nothing for the raw ecological service it extracts. The structure has been observed with precision in a parallel Indonesian scheme, where analysts noted that the public pays compensation for the water treatment the utility performs, while the utility itself never pays for the underlying resource (this structural observation, drawn from the Aceh watershed PES literature, transfers directly to the Jangkok’s utility-mediated design; see the discussion in Faridah, 2013).

This is the hinge of the entire evaluation, and its implication is exact. The scheme does not make the structural beneficiary of the watershed compensate the structural steward of it. It makes downstream households cross-subsidise their own water supply, through a flat and regressive surcharge, while the accumulation actor—the corporatised utility, and behind and alongside it the commercial and industrial abstractors of the lowland—continues to extract the underlying use-value for free. The transfer is real, and it is not worthless: it has supported genuine conservation activity in the Sesaot. But it is structurally incapable of closing the rift, because it leaves the engine of the rift untouched. The party whose extraction degrades the catchment is not the party who pays; the parties who pay are the very downstream users whose water security the degradation threatens.

From this vantage, the scheme’s most acclaimed feature—its longevity, its fifteen-year persistence—appears in a different and more troubling light. A transfer calibrated to compensate for the symptoms of degradation, rather than to halt its cause, institutionalises the rift as a permanent, low-grade revenue flow. It creates a standing apparatus—intermediaries, disbursements, monitoring—whose continued operation presupposes the continued degradation it ostensibly addresses, for were the catchment fully restored and the accumulation pressure removed, the apparatus would have no function. The scheme, in short, monetises the metabolic rift without closing it. It converts an ecological contradiction into a managed and durable transaction, and in so doing it stabilises precisely the configuration of forces that a genuine resolution would have to overturn. This is the PES conceit made concrete on a single island catchment: capitalism figured as both the disease and the cure, with the cure quietly requiring the persistence of the disease.

The Case for Decommodified Watershed Governance

A critique that halted here would be open to the decisive objection that critical political ecology has too often invited: that it is strong in diagnosis and empty in prescription, able to name the contradictions of an instrument but unable to propose a workable alternative. The remainder of the article takes that objection seriously and answers it. The alternative proposed is not the abolition of PES but its reconstitution as a transitional, decommodified instrument. The distinction is essential and is developed first in theory and then as a concrete four-part programme.

6.1 The Theoretical Basis: Decommodification

The theoretical foundation is the concept of decommodification as elaborated for ecological economics by Gerber and Gerber (2017). Building on Polanyi’s identification of land, labour, and money as fictitious commodities—things that are not produced for sale and whose treatment as commodities is therefore a social fiction with destructive consequences—and on the distinction between property and possession, Gerber and Gerber argue that decommodification, understood as the immunisation of a resource from market dependency, is among the most promising foundations for an ecological economics adequate to a post-growth future. Their illustrative case is instructive for the present argument: Swiss forest land, the bulk of which is held by public bodies and subject to rights of common access for recreation and non-timber use, sits substantially outside the land market not because it has been priced correctly but because it has been removed, by a possession-based logic, from the sphere of market exchange altogether (Gerber & Gerber, 2017).

Transposed to the Jangkok, the lesson is that the watershed’s hydrological service should not be priced more accurately but insulated more thoroughly. The objective is not to discover the true market value of water regulation and to charge it, which would deepen the commodity-fetishist abstraction the critique has identified, but to constitute the watershed as a use-value held in trust and to mobilise finance for its repair through a logic of obligation and stewardship rather than exchange. Crucially, this is not a utopian departure from the existing scheme but a clarification of its already largely non-market character. As noted in Section 3, most actually existing PES is administered transfer rather than competitive market; the reform proposed here strips away the market rhetoric that misdescribes such transfers and rebuilds them on an explicitly decommodified institutional basis.

6.2 A Four-Part Programme

The programme has four planks, each of which addresses a specific defect identified in the evaluation, and each of which is calibrated to the institutional realities of Lombok rather than imported wholesale from elsewhere.

First, public-trust ownership of the watershed. The catchment’s hydrological function would be constituted in law as a common good held in public trust, not as a bundle of tradeable service-rights. This blocks at the outset the commodification slippage that Fletcher and Büscher warn accompanies even well-meaning payment schemes: compensation becomes stewardship support rather than the purchase of a service-commodity. The plank is consonant with the Indonesian constitutional settlement on water, in which Article 33 of the 1945 Constitution vests control of water resources in the state for the people’s welfare, a principle reinforced when the Constitutional Court annulled the 2004 Water Resources Law for permitting excessive commercialisation. A public-trust constitution of the Jangkok would give that principle concrete institutional form at the basin scale.

Second, decommodified, opportunity-cost-plus compensation to upstream stewards under secure cooperative tenure. Payment to upstream forest stewards would be calibrated not to a fictitious market price of water-regulation services but to two real magnitudes: the opportunity cost of forgone extractive land use, and a living-income floor sufficient to make conservation compatible with subsistence. This directly addresses the survival logic that drives upstream forest conversion. Its precondition is tenure security, for an agroforestry stakeholder without secure rights has no rational horizon long enough to invest in a forest that matures over decades. Here the existing HKm community-forestry arrangement on the Sesaot is not an obstacle but a foundation: it already vests conditional, collective use rights in upstream farmer groups, and a reformed scheme would deepen and lengthen that tenure, converting precarious permits into secure cooperative possession in the Gerber and Gerber sense. This plank is, in effect, the structural answer to the class-asymmetry problem that defeated the Ostromian solution: it alters the upstream party’s structural position rather than merely adjusting the incentives it faces.

Third, mandatory, progressively scaled downstream contribution. The flat, voluntary, customer-borne levy would be replaced by a mandatory contribution scaled to volume abstracted and to commercial benefit, levied on the downstream beneficiaries of the resource—above all the corporatised utility and the commercial and industrial abstractors—rather than passed through to households as a regressive surcharge. This is the plank that closes the structural defect identified in Section 5.2: it makes the extractor pay. Constituted as a retained-revenue fiscal instrument under regional fiscal authority, it also serves the wider goal of fiscal decentralisation, allowing the locality to capture and recycle the value of its own ecological base rather than seeing that value extracted upward or outward. The contribution is not a market price but a public obligation attaching to the privilege of abstraction.

Fourth, an autonomous, publicly accountable basin fund. The one genuinely strong element of the prevailing policy proposals—an independent fund to govern allocation under real-time hydrological monitoring—would be retained and given teeth. Such a fund, insulated from both the utility’s commercial mandate and short-term political capture, would administer the upstream compensation, hold the public trust, and direct revenue toward catchment rehabilitation and green infrastructure under transparent, monitored rules. It is the institutional vehicle through which the other three planks operate.

6.3 The Honest Limit of the Reform

Intellectual honesty requires a final qualification, and stating it strengthens rather than weakens the argument. A decommodified PES embedded within a regional economy that remains capitalist is a transitional form, not a terminal one. It mitigates the metabolic rift; it does not abolish it. So long as the downstream economy is organised around accumulation, the pressure to externalise ecological cost persists, and the reformed scheme manages that pressure rather than dissolving its source. To claim otherwise would be to commit, in the opposite direction, the same error of which this article accuses the natural-capital framing: the belief that an institutional adjustment can resolve a contradiction lodged in the structure of production. The reform proposed here is best understood as a counter-hegemonic institution in the Coxian sense—one that shifts the configuration of material capabilities, ideas, and institutions against the prevailing order and that may, in so doing, enlarge the space for a more fundamental transformation. Naming this limit is not a concession that undermines the programme; it is the condition of proposing the programme responsibly. The decommodified watershed is a better instrument and a transitional one, and it should be advocated as both.

Conclusions

The fifteen-year experience of payment for environmental services on the Jangkok watershed has been narrated by its sponsors as a success and read here as a diagnosis. A scheme acclaimed for its longevity has operated over a basin whose hydrological condition has measurably deteriorated, culminating in the utility’s own 2025 warning against consuming raw water from the springs the scheme exists to protect. This article has argued that the conjunction is not a paradox to be explained away but a structural outcome to be expected. The scheme’s flat, customer-borne levy compensates the symptoms of degradation while leaving its cause—the accumulation pressure exerted by the downstream extractor—untouched, and in so doing it monetises the metabolic rift without closing it, converting an ecological contradiction into a durable and managed transaction.

The argument has taken seriously the strongest rival to this reading, conceding that Ostrom modelled upstream–downstream asymmetry directly while showing that her framework underweights the structural-class asymmetry that defines the Jangkok, and it has answered the demand for prescription with a concrete programme of decommodified watershed governance resting on public-trust ownership, opportunity-cost-plus compensation under secure cooperative tenure, mandatory and scaled downstream contribution, and an autonomous basin fund. The programme is offered not as a resolution of the contradiction between accumulation and ecological reproduction—no instrument can resolve that—but as a transitional institution that mitigates the rift while enlarging the space for deeper change.

There is, finally, a reason the argument belongs to island-systems scholarship and not merely to the general literature on watershed governance. On a small island, the upstream forest and the downstream tap share a single catchment and a single hydrological budget; the spatial separation that allows continental systems to defer or displace the contradiction is absent. What Lombok offers, and what the Jangkok makes legible, is the metabolic rift in compressed and undeniable form—the structural relation between stewardship and extraction laid bare within a basin small enough to be seen whole. The island does not merely host the problem. It is the lens through which the problem can no longer be evaded. 

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