With financial support from the Walmart Foundation, Earth Innovation Institute is partnering with Mato Grosso’s PCI Institute, Produzindo Certo and the state government of Mato Grosso, Brazil’s largest agricultural and livestock producer, to spearhead a groundbreaking initiative aimed at complying with the Forest Code while promoting sustainable, low-emission agricultural practices. The new project, “Building a Jurisdictional Incentive Program in Mato Grosso to Protect and Restore Forests,” will support cattle and soy sectors across the state to design a program of incentives, funded by revenues from the sale of jurisdictional REDD+ (Reducing Emissions from Deforestation and Forest Degradation) credits.

This initiative addresses one of the most pressing global environmental challenges: the deforestation and degradation of tropical forests, source of approximately 10% of global carbon emissions. Mato Grosso, a state spanning 903,208 square kilometers, is home to some of the world’s most vital ecosystems, including the Amazon rainforest, Cerrado savannas, and Pantanal wetlands. As a key player in global agricultural markets, Mato Grosso’s transformation toward forest-positive practices could have a profound impact on both local ecosystems and global efforts to combat climate change.

The project will help take Mato Grosso’s pioneering jurisdictional REDD+ (J-REDD) framework to fruition, generating high-integrity carbon credits based on state-wide reductions in emissions from deforestation and forest degradation. These credits will be sold on the voluntary carbon market, with the proceeds funding positive incentives for farmers, indigenous peoples, and other rural stakeholders who commit, or are already practicing, forest protection and restoration. The participatory design of the forest incentive program for farmers is one of the project goals. The program will also strengthen and expand the county-level “Produce, Conserve and Include” Compacts, known as PCI Compacts, which bring together farmers, local governments, smallholders, indigenous and agribusiness companies to implement sustainable land-use goals and practices at a community and farm level.

A Vision for Sustainable Agriculture and Forest Regeneration

Mato Grosso's leadership recognizes that the prevalent model of conventional agriculture is a key driver of deforestation that needs to change and become an essential part of the solution. The project envisions a state-wide transformation in which soy and cattle production continue to grow sustainably through more efficient, forest-positive practices. Over time, this will reduce pressures on native vegetation while allowing producers to meet increasing market demand for zero-conversion commodities.

Through the innovative use of REDD+ credits and locally tailored PCI Compacts, the project aims to create a virtuous cycle of forest protection and regeneration. The sale of verified carbon credits from deforestation reduction in Mato Grosso will finance the program, enabling farmers to receive incentives for maintaining and restoring native vegetation in areas mandated by the Forest Code. As the state achieves further emissions reductions, additional credit sales will generate more funds, strengthening the incentive program and driving even deeper emissions reductions.

Key Objectives and Anticipated Outcomes

The project has three primary objectives:

1. Strengthen Mato Grosso’s Jurisdictional REDD+ Program: The project will provide technical support to the state government to finalize its REDD+ program with the aim of carrying out its first sale of verified carbon credits, establishing a public-private entity to sell credits and ensuring a robust, participatory and transparent benefit-sharing mechanism.

2. Design and Implementation of a State Forest Incentive Subprogram: With the collaboration of cattle and soy producers, the project will support the design and implementation of a state-wide  subprogram for low-emission production. With J-REDD+ revenues, the sub-program will provide incentives for the protection and regeneration of native vegetation in compliance with the Forest Code.

3. Strengthening of County-Level PCI Compacts: The project will promote the consolidation and expansion of the PCI Compacts, strengthening partnerships at the county level to implement sustainable land-use practices.

Anticipated outcomes include the implementation of the State's Jurisdictional REDD+ program, the first sale of forest carbon credits from the J-REDD program, an increase in the restoration of native vegetation in Permanent Protection Áreas and Legal Reserves (as required by the Brazilian Forest Code), and the development and adoption of of low-emission agricultural production practices.

A Global Model for Sustainable Development

This project helps to further consolidate  Mato Grosso’s position as a global leader in sustainable agriculture and forest conservation. By integrating market-based incentives with on-the-ground commitments from farmers, the initiative offers an innovative and scalable model that could inspire similar efforts in other regions. The project will also contribute to Mato Grosso’s goal of achieving carbon neutrality by 2035, aligning with Brazil’s broader climate commitments under the Paris Agreement.