03/12/2007 (Telegraph) - The destruction of peat bogs in Indonesia is releasing more carbon dioxide every year than all of India or Russia, and three times as much as Germany.

Peat is made up of ancient plant material that never fully decomposed in wet conditions, forming a global carbon bank equivalent to 70 years of emissions at today's rates.

But vast tracts of tropical bog in Borneo and neighbouring Sumatra are being cleared, drained and burnt to grow palm oil, which can be turned into supposedly "green" bio-fuels.

According to research by the conservation group Wetlands International, Indonesian emissions in 1997 alone, which was a particularly bad year, "were estimated to have reached 40 per cent of global CO2 emissions".

Palm oil prices are at record highs, and demand seems guaranteed. European legislation requires that two per cent of all diesel must be vegetable oil, rising to 5.7 per cent in 2010 and 10 per cent by 2020.

Elsewhere, governments including America's are promoting bio-fuels.

With so much money involved, politicians have latched on to the industry as a source of economic growth and, critics allege, of big kickbacks.

Indonesia and other countries with big tropical forests are pushing hard for a scheme that would create a market in carbon safely stored in natural "banks" such as forests and bogs.

Under the Kyoto Treaty, which expires in 2012, only carbon that has already been emitted by industry can be traded.

Economists say the scheme would be a relatively cheap way to reduce global warming, costing the developed world £50 billion a year to end - in theory - the destruction altogether. That would cut global greenhouse emissions by 20 per cent at a stroke.

"They don't have forests, but we do. So if we all want this one Earth of ours to survive, please share [the burden]", Indonesia's president Susilo Bambang Yudhoyono said last week.

Sceptics say such a scheme would be hard to design or implement in countries with widespread corruption.