Originally written by Knowledge@Wharton.

Economic development feeds on forests, or at least it always has. The United States gobbled up forests as it grew into a world power, sacrificing, says the U.S. Forestry Service, something like 200 million acres of forestland in the second half of the 19th century alone. By 1926 the nation’s economy was booming, but the price the U.S. paid for its development was enormous: there were almost no forests left east of the Mississippi.

Today, notes Sarene Marshall, managing director of The Nature Conservancy (TNC’s) Global Climate Change Team, the environmental cost of such forest clearing is so great that “we can no longer afford it as a planet.” Already, “deforestation and forest degradation…account for nearly 20% of global greenhouse gas emissions, more than the entire global transportation sector and second only to the energy sector,” reports The United Nations Collaborative Program on Reducing Emissions from Deforestation and Forest Degradation in Developing Countries (the UN REDD Program).

And just two countries, Brazil and Indonesia, account for approximately 55% of the world’s deforestation, not including the loss of peatlands, “which can account for half the greenhouse-gas emissions in Indonesia in some years,” says theWashington Post. So now that industrialized countries like the United States no longer depend on unregulated deforestation for their economic well-being, the challenge is whether emerging powers like Brazil and Indonesia will be able to forge new greener paths to their own economic development.

Brazil has already made significant progress, decreasing deforestation by 78% in recent years and undertaking new initiatives that promise even more success in the years ahead. Indonesia, by contrast, is still in the early stages of the process. Its economy, the largest in Southeast Asia, is defying the economic malaise affecting much of the world and growing at an annual rate of about 6%.

But this growth is coming at a severe environmental cost. Indonesia is today the world’s third-largest emitter of greenhouse gases, after the U.S. and China, largely because of the country’s historically high rate of deforestation. According to Agus Purnomo, the special assistant to the President of Indonesia and head of secretariat for National Council on Climate Change, 85% of the nation’s carbon footprint comes from “deforestation and uncontrolled land conversion.”

Just how, and how successfully, Indonesia will manage to maintain the vitality of both its economy and its rainforests is not yet clear. But an understanding of the forces that have led to the current situation and the new forces that are helping to shape Indonesia’s future suggests that Indonesia may someday, like Brazil, aspire to become a “green super power.”

The panel on “Growing Greener: Indonesia and the World” at the 2012 Wharton Global Alumni Forum in Jakarta brought this point home. In his opening remarks, Eric Orts, a professor of legal studies and business ethics at Wharton, noted the many environmental challenges Indonesia faces, including large-scale deforestation. But said Orts, who is also director of Wharton’s Initiative for Global Environmental Leadership (IGEL), if Indonesia succeeds in managing these challenges, “then it promises to become a leading example for other emerging economies in the second half of the 21st century.”