Climate deals turn up heat in Indonesia's dark peatlands

By Gillian Murdoch

PALANGAKARAYA, Indonesia (Reuters) - It used to be malaria that gave people fevers in Indonesia's remote, mosquito-infested peatlands.

Now it is carbon.

Investors around the world are dreaming of the billions the festering carbon-rich bogs could bring in as the world battles global warming. Peat bogs are the new black gold, some say.

Science has long known that Indonesia's 20 million hectares (50 million acres) of dense, black tropical peat swamps, formed when trees, roots and leaves rot, are natural carbon stores, explained University of Nottingham peat expert Professor Jack Rieley.

"They are 50 to 60 percent carbon. Peat stores more carbon than all of the planet's vegetation combined," he said.

Now the dots have been joined between peatlands and the massive amounts of climate change-related carbon emissions they release when burnt or drained to plant crops such as palm oil.

Peat is a potential gold-mine, said Marcel Silvius, Senior Program Manager of Wetlands International NGO.

"This science was not available before," said Silvius, the co-author of a November 2006 report that found Indonesia's peatlands emit two billion tons of carbon dioxide each year -- more than the annual greenhouse gas emissions of Japan or Germany.

Years of lucrative deforestation for timber and palm oil plantations has entrenched the practice of burning vast areas of Indonesian land, smothering neighboring Malaysia, Singapore and Brunei in annual choking smoke clouds, known as haze.

Now, in a sudden reversal, keeping Indonesia's forest cover intact is a hot investment ticket in a warming world, said Silvius.

"(The world's peatlands) emit eight percent of global carbon dioxide emissions, equal to what all the Annex One (industrialized) countries need to decrease (under the Kyoto Protocol). Tens of billions could be invested to achieve this," said Silvius.

Around $30.4 billion of carbon credits -- representing 1.6 billion tons of CO2 -- were bought and sold last year in Europe by companies seeking to trade off business-related carbon emissions for emissions reductions achieved elsewhere.

Already, investors are knocking on doors in towns close to peat swamps, such as Palangkaraya, in Central Kalimantan.

Within the million hectares of the nearby ex-Mega Rice Project peatlands, Rieley's scientists have been offered funding from Climate Care for tree planting and fire-fighting. Shell Canada is bank-rolling NGO-led peat rehydration and the Dutch government has invested 5 million euros ($6.7 million) in dam-building.

"They are all coming to visit the same people in Palangkaraya," said Daniel Murdiyarso of the Bogor-based Centre for International Forestry Research.