Aceh is one of the provinces in Indonesia undergoing a rapid development that entails the conversion of forest lands, including the marginally suitable peat lands, to agriculture. The peat land of Aceh has an area of about 0.27 million ha and stores as much as 561 million ton (Mt) of Cor about 2000 t C ha-1 underground. Carbon stocks are preserved under the natural peat land forest. Once the peat forest converted and drained, the carbon rich peat land contributes to green house gas (especially CO2) emissions through three process: (i) burning of the tree biomass during land clearing, (ii) burning of peat layer during peat forest burning that often coincides wih land clearing, (iii) decomposition of peat because of drainage. Burning during the land clearing process can emit as much as 367 t CO2 ha-1 from the tree biomass and 275 t CO2 ha-1 from the burning of 15cm of the peat layer. During crop cultivation , peat decomposition continues and its rate depends on the water table depth (as regulated by drainage depth) and on the farming practices. Plantation with drainage depth of 60cm may generate as much as 55 t CO2 ha-1 yr-1. About 90m peat subsides through burning during land clearing and decomposition during 25 year oil palm cultivation. In addition, subsidence at the rate of 50 to 115cm per 25 year also occurs concomitantly during crop production due to peat compaction. In total, the subsidence reaches 135 to 200cm within 25years - one cycle of oil palm production - leaving the surrounding areas very prone to flooding and droughts. This sustainability and environmental aspects of farming on peat land should be taken into account before making economically based investment.