The rates of deforestation in Indonesia are still a major environmental issue because according to the latest study by the South Dakota State University forest cover loss at Kalimantan and Sumatra was 5.4 million hectares, or 9.2 percent, of their total forest cover between 2000/2001 and 2007/2008.
The Indonesia's laws that protect forests from deforestation are still pretty much inadequate because more than 20 percent of total deforestation in Indonesia occurred in areas where deforestation was either restricted or prohibited.
The main reason why so many forests are being destroyed in Indonesia is the creation of pulp and paper plantations and oil palm estates. Losing so many forests doesn't mean only huge environmental loss for Indonesia, it also accounts for huge economic damage. According to the data from Indonesian Corruption Watch the total losses from deforestation in Indonesia were at $8 billion between 2005 and 2009, or in average $1.6 billion per year.
Huge deforestation is also the main reason for Indonesia's growth in greenhouse gas emissions over the last ten years. Indonesia has become aware of the fact that the only way to reduce greenhouse gas emissions is to stop deforestation, and Indonesian President Yudhoyono in 2009 announced Indonesia would cut greenhouse gas emissions by 26-41 percent from a projected 2020 baseline, provided it would receive international help.
The Norway has responded to this, and has signed a 'REDD+' (Reducing Emissions from Deforestation and Degradation) partnership with Indonesia under which Indonesia could generate up to $1 billion if being able to meet its deforestation reduction targets.
Stopping deforestation will be anything but easy for Indonesia's government not only because of pulp, paper, and palm oil plantations but also because of the traditional corruption problem which significantly undermines the significance of forestry laws in Indonesia.