On June 5, 2023, World Environment Day, the State of Tocantins, Brazil, entered into a ten-year contract with Mercuria Energy Trading, a Swiss energy company for the sale of verified, jurisdictional carbon credits. Under this contract, Tocantins will be able to sell jurisdictional carbon credits to Mercuria after having completed the requirements of The REDD+ Environmental Excellence Standard (TREES) of the Architecture of REDD+ Transactions (ART).
As a long-time member of the GCF Task Force, Tocantins has worked on its jurisdiction-scale program for many years in order to reduce tropical deforestation and provide economic opportunities for its people. In addition to the technical requirements around emissions accounting, additionality, and transparency, demonstrating compliance with the TREES is only possible if there is full participation of Indigenous Peoples and other Local Communities and if there is a fair and transparent benefit-sharing agreement.
This contract demonstrates the importance of designing and implementing jurisdictional approaches to reducing deforestation in a manner than attracts large-scale climate finance in recognition of these efforts and that these financing mechanisms are best done in partnership with governments and communities on the ground. The GCF Task Force congratulates Tocantins on its ongoing efforts!
For additional information on this historic announcement, see this Earth Innovation Institute release.
(Photo courtesy of Tocantins Government)