Developing countries would be more likely to participate in any new international climate change agreement if they could earn and trade carbon credits from avoided deforestation, also known as 'REDD'. This paper argues that REDD should be included in any new agreement but, unlike the Clean Development Mechanism, its credits should be accounted for at a national-level, rather than on a project-basis. Experience with the Kyoto Protocol and development assistance over many decades shows that to have effective and sustainable environmental and development benefits, a national-based approach to REDD would be needed to transmit international financial incentives into national development planning. Indonesia is used as an example to show how a national-based approach to REDD could be effectively implemented in the country with the highest deforestation rate in the world.