July 6 (Bloomberg) -- Indonesia, the third-most populous country in Asia, called for international help to prevent the drainage of local swamps that store carbon, an investment that may generate emission credits worth billions of dollars in Europe.

The nation is seeking partners to help halt the release of carbon dioxide from tropical swamps known as peatlands, as its economy develops, said Susanna Tol, who attended the international government-sponsored Convention on Biological Diversity meeting in Paris for Wetlands International, a lobby group backed by the U.K. and Netherlands governments.

The Southeast Asian nation is releasing about 2 billion metric tons of carbon dioxide a year from developing the swamps and starting fires to clear land for plantations, Wetlands International estimates. Selling the equivalent of credits at a forward-market price for United Nations emission reductions of 14.59 euros a ton would generate 29 billion euros ($39 billion).

Indonesians ``now see they are causing a huge global problem,'' said Alex Kaat, a spokesman for Wetlands International, based in Wageningen, the Netherlands. Other nations including Malaysia and Thailand may also benefit from selling credits to help stop peatland drainage, Kaat said today by telephone. Peat is an accumulation of partially decayed vegetation matter.

Reducing carbon dioxide emissions may help curb global warming and climate change, scientists say.

Indonesia, the biggest contributor of emissions from drained peatlands, may be willing to start voluntarily curbing degradation in return for payment for emission credits, Kaat said. The money should be used to help ensure the nation develops its economy without harming those carbon-storing swamps, he said.

Emission Credits

The value of the global emissions-credit trade tripled last year to $30.1 billion, with 81 percent of that in the European Union carbon-dioxide system, according to World Bank figures.

EU factories and power stations buy UN-approved credits as an alternative to permits handed out by the region's governments. National governments including the Netherlands and Japan also can buy credits to help them meet targets under the 1997 Kyoto Protocol, an agreement between nations to curb global warming through 2012.

A voluntary system allowing Indonesia to sell credits to curb degradation could start as early as next year, Kaat said. Twelve countries, including Indonesia, the Netherlands, Germany, Canada and Switzerland yesterday at the convention meeting supported new systems to safeguard peatlands, Wetlands International said in a statement on its Web site.

Peat Carbon

``Such a high level of support on a particular topic is highly unusual and reflects the support for the urgent need to protect this type of habitat,'' Wetlands said.

Southeast Asian peatlands store at least 42 billion metric tons of soil carbon or peat carbon, the group estimates. If that carbon is exposed to oxygen in air or burned, it would potentially create 155 billion tons of carbon dioxide emissions.

Total world carbon dioxide emissions from fuel combustion were 26.6 billion tons in 2004, according to 2006 figures from the International Energy Agency.

While Southeast Asian peatlands hold about 6 percent of global peat-carbon stores, they are producing about two-thirds of the world's emissions from peatland degradation, Kaat said. Indonesia's emissions from swamp degradation are the equivalent of about 8 percent of global emissions from fuel combustion.

Most of Indonesia's coastal forests are on peatlands, which stretch across an area the size of the U.K., Jack Rieley, a geography professor at the University of Nottingham in England, has said. Once lit, the soil can burn for months.

To contact the reporter on this story: Mathew Carr in London at m.carr@bloomberg.net

Last Updated: July 6, 2007 08:34 EDT