With the potential to generate between US$10.8 billion and US$21.6 billion from forest emissions reductions between 2023 and 2030 in the nine states of the Legal Amazon, Jurisdictional REDD+ programs are an essential source of funds for reducing deforestation. Under Jurisdictional REDD+, each state is responsible for environmental control and for managing the amounts to be shared with communities. According to a study by the Earth Innovation Institute (EII), the funds could become available as early as 2026, as states move to regulate their respective carbon credit sales policies.

In June this year, Tocantins formalized an Emissions Reduction Payment Agreement (ERPA), a legal step that puts the state at the forefront of the Jurisdictional REDD+ system in Brazil. Tocantins has the potential to receive US$ 172 million for the period 2020-2023.

With this contract, the state will be able to start receiving the proceeds from the sale of carbon credits as early as 2026. To do so, Tocantins will need to finalize consultations with the communities that will define the percentage of revenues to which each segment of society is entitled—indigenous peoples, traditional communities, agricultural producers, family farmers, among others.

A pioneer in carbon credit sales legislation, Acre reached a historic milestone in June by becoming the first state in Brazil to define the percentages for sharing the benefits of its program in the REDD+ Jurisdictional system. The following distribution was established: indigenous territories: 22%; extractive territories: 26%; agricultural producers (small and medium) and family farmers: 24% and 28% for the state to implement public policies in REDD+ Jurisdictional.

However, Acre is still negotiating its Emissions Reduction Payment Agreement (Erpa), a legal requirement for it to have a real prospect of receiving revenues. By 2030, the state has the potential to receive US$ 714 million from the sale of jurisdictional REDD+.

Pará, which is well advanced in selling its credits to the Leaf Coalition, a unique public-private partnership focused on halting tropical deforestation, had its activities related to the sale of carbon credits suspended by a decision of the Federal Public Ministry (MPF), and the merits of the case are still under review. If an agreement is reached between the parties, Pará could earn almost US$ 3.5 billion from the sale of carbon credits by 2030.

In addition to these states, Mato Grosso (MT), Mato Grosso do Sul (MS), Rondônia (RO), and Maranhão (MA) have already drafted initial legislation to work with the Jurisdictional REDD+ system and are at different stages of development. All of them plan to consult with local communities to collectively and equitably determine how revenues will be distributed. The estimated resources are US$2 billion for MT, US$1.728 billion for RO, US$32 million for AP, and US$362 million for RR.

The states of Amazonas (AM), Goiás (GO), and Piauí (PI) are still discussing whether to adopt the Jurisdictional REDD+ system as standard. If it adopts such a system, the state of Amazonas alone could earn up to US$1.703 billion.

This scenario puts Brazil at the forefront of the global carbon credit market in the short term. EII Executive Director Daniel Nepstad argues that trading carbon credits through the “jurisdictional REDD+” model is the fastest and most effective way for Brazil to conserve and restore the Amazon and Cerrado biomes in a short period of time. "With the jurisdictional REDD+ system, most of the global climate solution can be achieved in the next two decades. It is a short-term solution that gives the world time to bring about the energy transition. Only with the significant volume of resources resulting from JREDD+ will Brazil be able to achieve the Paris Agreement targets in the short term. The model is the great climate solution for the Amazon Rainforest," Nepstad adds. EII supports these processes in the following states: Acre (AC), Goiás (GO), Mato Grosso (MT), Mato Grosso do Sul (MS), Pará (PA), and Tocantins (TO).

Access the study here: The Great Climate Solution of the Amazon Rainforest and the Carbon Market