Ron Luhur
Washington D.C.

This December, thou¬sands of representa¬tives from countries, companies and civil groups will gather in Bali to discuss climate change.

The world will be watching and Indonesia will find itself in a unique position in history. Indonesia has the opportunity to influence the way we resolve the world's most press¬ing economic and environmen¬tal challenge.

As both an Indonesian and an environmental advocate, I'm excited and proud at my country's opportunity to lead the way.

Many assume that develop¬ing countries like ours cannot or do not want to be part of the solution. In Washington, D.C., where I live, many legis¬lators and officials make this assumption and use it as an excuse for inaction. This year's Bali conference will be a critical opportunity for Indonesia and our fellow rain forest nations to change this misperception.

It is also an opportunity to show the White House and the U.S. Congress that they can no longer use developing coun¬tries as an excuse to remain on the sidelines.

Greenhouse gas emissions from forest clearing and forest burning eclipse the emissions from all the cars, trucks, planes, trains and ships in the world combined. These are the largest sources of emis¬sions in the developing world, accounting for roughly 20 percent of global greenhouse gas, emissions. If tropical deforestation emissions are accounted for, Indonesia is surpassed only by the United States and China in its contri¬bution to climate change.

We hear a lot about fossil fuels, and how we need bigger reductions in emissions from sectors heavily reliant on them, like power generation and cement production — areas that are the focus of international agreements such as the Kyoto Protocol. And this is true. But glaringly absent from these agreements has been a recognition that defor¬estation emissions must also be reduced in order to tackle climate change.

We simply cannot ignore emissions from deforestation any longer. To do so would be to pass up significant reduc¬tions and turn our backs on the magnificent tropical forests that serve as the lungs of our planet.

The technical know-how needed to attack deforesta¬tion exists today, including sophisticated satellite-based forest monitoring systems. But a critical hurdle remains: the opportunity for develop¬ing countries to reap what they sow.

For many industrialized countries, thanks to the Kyoto Protocol, emitters such as power plants have an option to sell reductions on the car¬bon market, and hence, have profit incentives they can use to find new ways to cut emis¬sions more cheaply. By align¬ing business incentives with environmental performance, access to carbon markets has driven innovation and will lead Jo large-scale reductions from this sector.

By the same token, opening access to carbon markets for developing countries could align incentives with forest protection and drive innova¬tion and large-scale cuts in deforestation emissions. Indonesia's big opportunity here is to craft the post-Kyoto global road map — a Bali road map — which acknowledges the singular importance of addressing deforestation, and treats reductions in deforesta¬tion with the same measures as those used for reductions in fossil fuels.

Since industrialized coun¬tries are compensated through the carbon markets for their reductions, developing coun¬tries should equally qualify for compensation through the markets for the deforestation reductions they achieve.

The European Union Emis¬sions Trading Scheme, the principal carbon market today, was valued at US$25 billion last year and is projected to grow dramatically. There are signs that a U.S. carbon mar¬ket could also emerge in the not too distant future. Despite the lack of progress by the White House,, momentum is building in the U.S. Congress and in key U.S. states, includ¬ing California. If such markets emerge in the U.S., the global carbon market could grow by an additional $50-$300 billion a year — creating sizable opportunities for finance and investments that Indonesia cannot afford to miss out on.

For Indonesia, there is a great deal at stake. We are vulnerable to the economic and social impacts of increased dangerous weather phenomena such as prolonged floods, which threaten to inundate productive agricul¬tural lands - perhaps like the floods that Jakarta, my beloved hometown, experi¬enced early this year.

We need to focus on sus¬tainable development and ways to maximize long-term economic opportunities for Indonesia, including protect¬ing idyllic beaches and coral reefs that drive Indonesia's tourist economy.

We also need to elevate a new generation of Indonesians who are world-class builders and leaders to be part of what will possibly be the world's largest commodities market.

The current administration of President Susilo Bambang Yudhoyono has the opportuni¬ty to be part of the new gener¬ation. As the leader of the newly-minted Forest-11, the President has assembled a coalition of 'developing rain forest countries who have declared their interest in play¬ing a key role in the climate change solution.

This is a great first step, but the President, his partner countries and fellow Indone¬sians must pursue, with vigor, a way in Bali to give the developing world and its forests equal access to the world's burgeoning carbon marketplace. Together, we must show the world that we, as developing countries, are ready to lead the way in fight¬ing climate change.

The writer is a -carbon mar¬kets specialist at Environmen¬tal Defense in Washington, D.C. He can be reached at rluhur@environmentalde-fense.org