Indonesia pins hopes on forests at Bali meeting

JAKARTA, Nov 21 (Reuters) For years, Indonesia has made money by chopping down its forests. Now it wants to earn billions by preserving what is left.

The huge archipelago, with about 10 per cent of the world's tropical rainforests, is pinning its hopes on next month's UN climate talks in Bali.

The government is backing a scheme that aims to make emission cuts from forests eligible for carbon trading.

Experts estimate Indonesia could earn more than 13 billion dollars by preserving its forests if the carbon trading plan gets support in Bali.

About 190 countries will gather on the Indonesian resort island to try to hammer out a replacement for the Kyoto Protocol, a global pact aimed at fighting global warming.

''Carbon will be the new valuta (currency),'' Marcel Silvius, senior programme manager of Wetlands International, told Reuters.

''In the coming years we may see investments in millions, in the next decade it may be hundreds of millions.'' Indonesia's forests are a massive natural store of carbon, but environmentalists say rampant cutting and burning of trees to feed the pulp, timber and palm oil sectors has made the country the world's third-largest emitter of greenhouse gas emissions.

Indonesia's forests, a treasure trove of plant and animal species including the threatened orangutan, emit a staggering 2.5 billion tonnes of carbon dioxide a year, according to a report sponsored by the World Bank and British development agency.

Deforestation is estimated to contribute 20 per cent of total greenhouse gas emissions -- more than all the emissions of the world's cars, trucks, trains and airplanes combined.

Environmental groups say that protecting tropical forests is the most direct and fastest way to mitigate some of the impact of climate change.

''Trade in palm oil by some of the world's food giants and commodity traders is helping to detonate a climate bomb in Indonesia's rainforests and peatlands,'' global environmental group Greenpeace said in a recent report titled ''How the Palm Oil Industry is Cooking the Climate''.

TROPICAL RAINFORESTS Indonesia is one of the few countries that still has swathes of tropical rainforests left.

Even though it has lost an estimated 70 per cent of its original frontier forest, it still has a total forest area of more than 91 million hectares, with a host of exotic plants and animals waiting to be discovered.

The richest forests are found in Borneo -- the world's third-largest island shared among Indonesia, Malaysia and Brunei -- which is home to about 2,000 types of trees, more than 350 species of birds and 210 mammal species.

Many animals such as pygmy elephants, orangutans as well as the clouded leopard, the sun bear and the Bornean gibbon top the list of Borneo's endangered species.

Charles Darwin described Borneo as ''one great untidy luxuriant hothouse made by nature for herself''.

But environmentalists say the island is being stripped by illegal logging, slash-and-burn farming and creation of vast oil palm plantations.

Greenpeace estimates Indonesia had the world's fastest rate of deforestation between 2000-2005, losing the equivalent of 300 soccer pitches every hour.

There is no clear estimate of Indonesia's current deforestation rate, but figures range between 2.5 million and 3.5 million hectares a year.

'HEADING FOR THE WATERFALL' ''We're in a canoe heading for the waterfall,'' Frances Seymour, director-general of the Centre for International Forestry Research (CIFOR), said.

''Current rates of deforestation, whether it is here in Indonesia or anywhere else in the world, are unsustainable and need to be slowed.'' During the Bali conference, participants will hear a report on Reduced Emissions from Deforestation (RED) -- a new scheme that aims to make emission cuts from forest areas eligible for global carbon trading.

Conservation and research experts have said deforestation rates have dropped significantly after the Indonesian government's recent moves to implement tough measures on illegal logging and a new law prohibiting the use of fire to clear land.

But Indonesia says it must be given incentives, including a payout of 5 dollars - 20 dollars per hectare, to preserve its forests.

''We want an appreciation of the forest cover that we have, because in maintaining it, we want to lobby for a compensation for that,'' Environment Minister Rachmat Witoelar told Reuters in a recent interview.

''The world will benefit very much if the hundreds of millions of forests all over the world, not just Indonesia, will be restored.

And for that the world will be happy to pay.'' He did not say how Indonesia, where corruption is rife and law enforcement is often lax, could ensure the full protection of its forests under such a scheme.

Jakarta has being trying to mobilise nations with most of the world's tropical rainforests -- Brazil, Cameroon, Congo, Costa Rica, Gabon, Malaysia and Papua New Guinea -- ahead of the talks.

''Carbon is the big hope,'' Ian Kosasih, director of the WWF's forest programme in Jakarta, told Reuters, referring to carbon trading as the answer to saving Indonesia's forests.

''Eighty percent of carbon emissions come from fossil fuels and 20 per cent from land use. But in Indonesia, the figure is opposite, which relates to how important forests are to carbon emissions,'' he said.

Reuters SZ DB1001