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Recent climate talks in Bali have made progress toward action on deforestation and forest degradation in developing countries, within the anticipated post-Kyoto emissions reduction agreements. As a result of such action, many forests will be better protected, but some land-use change will be displaced to other locations. The demonstration phase launched at Bali offers an opportunity to examine potential outcomes for biodiversity and ecosystem services. Research will be needed into selection of priority areas for reducing emissions from deforestation and forest degradation to deliver multiple benefits, on-the-ground methods to best ensure these benefits, and minimization of displaced land-use change into nontarget countries and ecosystems, including through revised conservation investments.