Vast government-managed forest conservation programs are launching in the tropics, to limit deforestation and reduce corporate carbon emissions.

Unlike project-based programs, which impact limited parcels of land and are typically managed by private developers or NGOs, these “jurisdictional” programs, as they are known, cover emissions reductions across an entire country or state with standardized baselines, monitoring and safeguards.

By offering government-validated credits at such a massive scale, these programs aim to minimize such issues as leakage (when deforestation migrates) and double counting (when more than one entity uses the same credit to make a reduction claim) by providing a way to consider all land-use changes within the jurisdiction.

Implementation, however, has met with some skepticism. In Brazil, for instance, a public prosecutor is challenging one $180 million forest conservation program in the state of Pará. 

While the jurisdictional approach is relatively untested, proponents argue that outsized interventions like these are needed to combat today’s alarming scourge of deforestation, which releases large amounts of stored carbon dioxide into the atmosphere.

Inevitably, evaluating jurisdictional programs and the credits they offer will be a necessary art for business leaders engaging with voluntary carbon markets. 

“There’s a lot that can go wrong, especially when you’re working deep in forests with Indigenous groups and sometimes in contested territories,” said Barbara Haya, director of the Berkeley Carbon Trading Project. “You really need to know the program well before you can in good conscience give donations or buy these credits.”

What are jurisdictional forest programs?

Forest conservation is the largest source of carbon credits on the voluntary carbon market, accounting for about 25 percent of the inventory. But the current network of individual, disconnected projects has produced mixed results.

“Despite more than $3 billion in aid for REDD and close to a half billion carbon credits awarded over the last 20 years … deforestation is still continuing at an alarming rate,” found a study by the Berkeley Carbon Trading Project. REDD stands for Reducing Emissions from Deforestation and forest Degradation. The framework helps countries value projects to address deforestation.

In expanding the project model to cover so much more territory, jurisdictional programs bring to bear more accurate measurements, more coordinated enforcement efforts and much farther-reaching solutions. Conventional projects average around 200,000 hectares. Jurisdictional programs often require a minimum area of 2.5 million hectares for certification; that’s about the size of Massachusetts.

Governments in Ecuador, Costa Rica, Ghana and Brazil have all set up jurisdictional programs. Generated carbon credits are owned by the state and sold directly to buyers through purchase agreements, or through other entities as determined by the government.

While many critics argue that jurisdictional programs don’t adequately compensate for corporate carbon emissions, most acknowledge that the system is an improvement over the fragmented project model.

Problems in Pará

The jurisdictional program being created by the Brazilian state of Pará covers an area about three times the size of California. The state has reached a deal with the LEAF Coalition, which represents companies like Amazon, Bayer and the Walmart Foundation, to purchase 12 million carbon credits at $15 each. 

The challenge filed by Brazil’s public prosecutor cites an illegal forward sale of credits and inadequate consultation with Indigenous groups, among other objections.

People working with the program counter that the process has only just begun, and no credits have been sold. Pará’s community consultation process, one of the largest in Brazil’s history, will help determine the benefit-sharing agreement. Project development is being allowed to continue while the lawsuit unfolds.

“I can’t overstate how challenging it is to involve so many people in such a huge place as Pará,” said José Octavio Passos, Brazilian Amazon director of The Nature Conservancy. “Sometimes, it takes three days by boat to get to people. It’s a very expensive, complex process that involves multiple communities that speak different languages.”

Due diligence essentials 

Here are some tips for navigating the new world of jurisdictional forest programs and the carbon credits market.

1. Check the certification

Accredited certification standards include ART TREES, Verra JNR and FCPF. Each attaches specific requirements to program approval.

ART TREES