by Emma Graham-Harrison

December 14, 2007, NUSA DUA, Indonesia (Reuters) - Climate talks in Bali reached a deal on Friday to tackle greenhouse gas emissions from deforestation, hailed as a sign of developing nations' commitment to fighting global warming.

The breakthrough might eventually allow poor but forested nations to turn conservation into a tradeable commodity, with the potential to earn billions of dollars selling carbon credits.

But one of the scheme's key architects warned that, if successful, it will create such large emissions reductions that carbon markets could collapse unless rich nations take on more stringent reductions targets.

Destruction of forests produces about 20 percent of man-made carbon dioxide emissions, so their conservation is vital to limiting rises in global temperatures.

Deforestation had been left out of previous climate deals because of concerns about how to work out which trees were threatened, and that any scheme would reward countries destroying forests rather than those protecting their resources.

"Forests have been the elephants in the corner of the climate change process," said Andrew Mitchell, executive director of Global Canopy Programme, adding that markets were the only way to find the billions of dollars a year needed to protect forests.

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