A project to create a large agricultural estate in Merauke in Indonesia's Papua province may still to go ahead despite the President announcing a two-year moratorium on new logging concessions.
Susilo Bambang Yudhoyono has signed a deal with Norway in which Indonesia will receive up to one billion US dollars for honouring the moratorium.
The Sydney Morning Herald reports that the commitment to stop the conversion of peatland is welcomed by environmentalists.
Indonesia is the world's third largest emitter of greenhouse gases, with 80 per cent of its emissions stemming from deforestation.
As well as felling trees which absorb carbon, deforestation in Indonesia's swampy peatlands releases carbon from the exposed peat as it dries.
The moratorium will put curbs on Indonesian's palm oil industry and there is speculation it may derail plans for the agricultural estate in Merauke where there are large swampland forests.
However, a presidential climate adviser has indicated the estate would still go ahead in a way that doesn't involve peatlands conversion.
