US$180 million worth of carbon credits for sale to Big Polluters from the state of Pará, Brazil

Prices are backed by the governments of Norway, UK, and US.

Under a new deal, set up during Climate Week 2024 in New York, Big Polluters from the global North can buy carbon credits from the state of Pará, Brazil. The governments of Norway, UK, and US have also signed the agreement.

The deal, worth US$180 million, was set up by the LEAF Coalition, which consists of a series of corporations in addition to Norway, UK, US, and South Korea.

The LEAF Coalition was launched by the governments of Norway, the UK, and the US in April 2021 with the aim of “halting tropical deforestation by 2030”. The carbon credits are to be certified under the ART TREES standard.

The LEAF is a re-branding of REDD under a new name: “Lowering Emissions by Accelerating Forest finance”. It’s coordinated by a company called Emergent Forest Finance Accelerator, Inc. Environmental Defense Fund set up the company in 2019, which is incorporated in the tax and secrecy haven of Delaware.

Carbon trading is a “zero sum game”

In its press statement about the deal with Pará, Norway’s International Climate and Forest Initiative states that an area the size of Cambodia has been deforested in Pará.

The area of Pará state is 1,248,000 km² and the area of Cambodia is 181.035 km².

The primary threat comes from “agricultural production, primarily beef farming”, according to NICFI.

Norway’s Minister of Climate and Environment, Tore O. Sandvik says that,

“We have seen a welcome increase in support for rainforest preservation, but we are entirely dependent on private financing to achieve the goals of forested nations. That is why Norway has worked diligently to facilitate these types of agreements where companies pay forested countries for reducing deforestation.”

Sandvik adds that, “Preserving the rainforest is one of the most important international climate and environmental measures we can take.”

But Sandvick says nothing about trading the carbon stored in Pará’s forests against continued emissions from burning fossil fuels — which cancels out any climate benefits of reducing the rate of deforestation in Pará.

The reality, is that carbon trading is “at its best a zero sum game”, as then-chair of the CDM Executive Board, Lex de Jonge said in 2009.

Zero sum is the best case scenario. Given the record of the carbon trading industry, it is more than likely that a significant percentage of the carbon offsets will be fake. Meaning that the sale of the carbon offsets will actually make the climate crisis worse.

Deforestation in Pará

About 25% of the Brazilian Amazon is in Pará, but 40% of deforestation in the Brazilian Amazon takes place in Pará. Last year, according to Global Forest Watch Pará lost 664,000 hectares of forest.

NICFI states that in Pará, “Over the past two years, deforestation has been reduced by 35 percent.” No source is given to back up this statement.

Global Forest Watch data shows that tree cover loss (pink) and primary forest loss (green) in Pará fell in 2023, but was higher in 2022. Since a peak in 2016 and 2017, deforestation has fallen, but remains high.

US$15 per carbon credit

A press statement from Emergent explains that the deal, “provides for the purchase of up to 12 million high-integrity forest carbon credits generated by reductions in deforestation in Pará over the years 2023 to 2026”.

Under the deal, Norway, UK, and US provide a guarantee that the state of Pará will be paid US$15 for 7 million of its carbon credits. According to Allied Offsets data, the average price for nature based forestry is US$4.49 — and the current price on Xpansiv’s voluntary N-GEO market is US$0.33.

Amazon, Bayer, BCG, Capgemini, H&M Group, and Walmart Foundation, have agreed to by 5 million carbon credits.

If other companies decide to pay more than US$15, the governments involved in the LEAF Coalition will use the funds for buying carbon credits elsewhere, through LEAF.

Helder Barbalho, Governor of Pará, comments that,

“Being the first Brazilian state to sign an agreement with the LEAF Coalition is proof of the success of our policies to combat deforestation and transition to a more sustainable, inclusive and greener economic model. Reaching a price of $15 per tonne, well above current market levels, demonstrates buyers’ confidence in the effectiveness of our efforts and the high integrity of the credits we are generating.”

Free, prior and informed consent?

NICFI states that, “Norway has supported Pará’s efforts to reduce and measure deforestation, and to consult with Indigenous peoples and local communities.”

However, the press statement makes no mention of any process of free, prior and informed consent.

Barbalho also talks about Indigenous Peoples and local communities, without mentioning free, prior and informed consent:

“Our jurisdictional REDD+ system is based on a robust model, anchored in strong social participation. Our population, including Indigenous Peoples, Quilombolas, Traditional Communities and Family Farmers, is not only heard but works together and shares the benefits. Along with other policies, our work to combat deforestation is already helping us build a prosperous, sustainable and inclusive economy for all.”

Emergent’s press statement includes comments from Eron Bloomgarden of Emergent, Kara Hurst of Amazon, Matthias Berninger of Bayer, David Webb of BCG, Cyril Garcia of Capgemini, Leyla Ertur of H&M Group, Julie Gehrki of the Walmart Foundation, Kerry McCarthy, the UK’s Minister of Climate, Tore Sandvik, Norway’s Minister of Climate and Environment, Mark Kenber of the Voluntary Carbon Markets Initiative, and Fred Krupp of Environmental Defense Fund.

Only two comments came from anyone in Brazil: Concita Sompré of the Federation of Indigenous Peoples in Pará, and Helder Barbalho, Governor of Pará.