Growing global concern about the environmental costs of economic development resulting from natural resource extraction has sparked interest in a new economic paradigm known as ‘green development’. Indonesia is currently experimenting with the ‘green development’ paradigm and trying to define its meaning and better understand its potential applications. So far, this process has meant a refinement and realignment of existing policy measures that seek to reduce deforestation and GHG emissions. These regulations often face contradictory economic development strategies. The search for a balance between economic growth and more sustainable use of natural resources is currently playing out in the majority of Indonesia’s resource rich regions. The case study of Berau in East Kalimantan – a forest frontier area covered with primary and secondary forest - provides a good example of how local government’s commitment to reducing carbon dioxide (CO2) emissions is confronted by the challenges to generate revenue from the extraction and utilization of forest and mineral resources. Nevertheless, considerable opportunities exist for future ‘green development’ in Berau. Significant forest conservation and GHG savings can be realized if the Berau government revaluates the removal of forested land from the forest estate and re-categorizes forests rich in biodiversity and carbon as conservation or protected forest. A comprehensive strategic environmental assessment (SEA) of Berau’s proposed 2012 spatial plan could help to revaluate current land allocations and identify carbon rich lands that should be conserved to mitigate GHG emissions. These are important lessons for other parts of Indonesia facing similar problems.