Australian Prime Minister Kevin Rudd is on a state visit to Indonesia to strengthen bilateral ties and hold talks with the Indonesia president and other senior officials about enhancing security, bilateral ties, and environmental issues. VOA's Nancy-Amelia Collins in Jakarta has more.

Australian Prime Minister Kevin Rudd met with Indonesia's President Susilo Bambang Yudhoyono on Friday and signed an agreement to tackle greenhouse gas emissions from deforestation.

"We have to tackle climate change. The economic cost of inaction will be much greater than the economic cost of action. Australia and Indonesia share the goal of reducing global greenhouse gas emissions for Indonesia," he said. "One of the biggest challenges is reducing deforestation. I was very pleased today that President Yudhoyono and I signed a forest carbon partnership that commits our two countries to work together more closely in this area."

Indonesia, which hosted the U.N. climate change conference last December, is the world's third largest emitter of greenhouse gasses, mainly due to deforestation.

Jakarta has also taken the lead calling on rich nations to pay developing nations to preserve their rainforests. Deforestation is responsible for about twenty percent of global greenhouse gas emissions which contribute to global warming.

Mr. Rudd also said the two leaders agreed to expand security cooperation between the two countries within the framework of the Lombok Treaty, a defense pact signed between Canberra and Jakarta in 2006.

"Australians and Indonesians have both suffered from the scourge of terrorism. We've seen innocent people murdered, and we've responded by strong practical cooperation preventing terrorism and tracking down the perpetrators," said Mr. Rudd. "I want to pay tribute to the close cooperation we have in this area, particularly between our law enforcement agencies. The government that I lead is committed to maintaining and strengthening that security cooperation."

Between 2002 and 2005 Indonesia was hit by a number of terrorist attacks blamed on the regional terrorist network Jemaah Islamiyah that killed hundreds of people. The largest attack on the island of Bali in 2002 claimed 202 lives, 88 of them Australian citizens.

Mr. Rudd and Mr. Yudhoyono also discussed the Australian Prime Minister's plans for a European Union type of Asia-Pacific community by the year 2020.