By Lucy Hornby

BEIJING, Sept 19 (Reuters) - Indonesia is mobilizing a group of eight nations ahead of upcoming climate talks to get rich countries to pay the world's tropical nations not to chop down rainforests, its forestry minister said on Wednesday.

Participants from 189 countries are expected to gather in Bali at a U.N.-led summit in December. They will hear a report on Reduced Emissions from Deforestation (RED) -- a new scheme that aims to make emission cuts from forest areas eligible for global carbon trading.

Indonesia wants to gain bargaining power for direct assistance by teaming up with Brazil, Cameroon, Congo, Costa Rica, Gabon, Malaysia and Papua New Guinea, which together account for the lion's share of the world's tropical rainforests.

"What the 'F8' (Forest Eight) hopes and wishes for is an incentive from developed countries, an appreciation of each one's efforts to avoid deforestation," Malam Sembat Kaban told Reuters during a visit to Beijing on Wednesday.

"For instance, Indonesia has the potential to sell 14 million cubic meters of logs based on sustainable principles. Indonesia's policy is to exploit only 9 million cubic meters of logs" from natural forests, through selective cutting, Kaban said, speaking through an interpreter.

"Who pays? We are saving the forest but taking an economic loss ... The demand is there, so there is no reason not to cut."

Under the Kyoto Protocol's first round, which runs through 2012, about 35 rich nations are obliged to cut emissions by 5 percent below 1990 levels by 2008-12 to fight global warming. The Bali meeting in December will initiate talks on clinching a new deal by 2009.

Kyoto focused on reducing emissions from industry and capturing greenhouse cases, but did not include a scheme to cut emissions from forestry or to protect existing forests.

Kaban acknowledged that there was no set way to measure or value revitalizing forests, or refrain from cutting them in the first place.

"This mechanism does not have a precise methodology. What the F8 wishes is there must be an understanding how the F8 countries can increase community welfare concerning the forests, with clear understanding, with clear mechanisms," he said.

"Because so far we don't have a clear protocol for how we proceed with CDM and so on," he said referring to the 'clean development mechanism' which allows polluters in rich countries to meet domestic greenhouse gas quotas by paying for emission-cutting programmes in developing countries.

Indonesia is home to 60 percent of the world's threatened tropical peatlands -- dense tropical swamps that release big amounts of Co2 when burnt or drained to plant crops such as palm oil. It is one of the world's top three carbon emitters when peat emissions are added in, said a report sponsored by the World Bank and Britain's development arm.

Australia this month agreed to contribute A$30 million to preserve 70,000 ha (173,000 acres) of peat forest in Indonesia's Kalimantan region, re-flood 200,000 ha of dried peat land and plant up to 100 million trees. The area was devastated when peat forests were drained in an ill-conceived scheme to create rice fields.

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