Carbon Credits in the Amazon

Researchers from CPI/PUC-RIO developed a dynamic economic model to evaluate the additionality of REDD projects in the Brazilian Amazon, moving beyond traditional statistical baselines. The study finds that 77% of the carbon stock in these projects is additional, meaning it would have been emitted without the projects, avoiding 0.5 Gt of CO2 equivalent. However, additionality varies by region, with significantly lower rates in forested and isolated areas, such as Portel, Pará, where low agricultural productivity makes deforestation unlikely even without carbon credits. The report argues that while some non-additionality exists, the low price of REDD credits (US$ 5 to US$ 15 per ton) limits the financial impact of these discrepancies compared to other carbon pricing mechanisms.

• The proposed methodology indicates that 77% of the carbon stock in REDD projects within the Brazilian Amazon is additional, meaning these areas would have been deforested without the projects' incentives, resulting in the avoidance of 0.5 Gt of CO2 equivalent.
• Additionality rates vary significantly across the 'five Amazons' regions: non-forest regions show the highest additionality at 98.5%, followed by deforested regions at 93.8%, forested regions at 79.4%, and under pressure regions at 72.7%.
• In the municipality of Portel, Pará, additionality is notably low at 57% because high transportation costs and low agricultural productivity make the land unsuitable for farming, suggesting the forest would have remained intact regardless of carbon credit revenues.
• The study identifies that properties most likely to have high additionality are those with larger areas, high carbon stocks, high agricultural productivity, and lower transportation costs, as these factors increase the economic incentive for deforestation.
• The financial impact of non-additional credits in REDD projects is considered limited because their market prices (US$ 5 to US$ 15 per ton of CO2e) are significantly lower than the global average for other carbon pricing instruments monitored by the World Bank.
• The new methodology improves upon traditional REDD baselines by incorporating an economic component that calculates the opportunity cost of deforestation and uses a fixed period from 2010 to the present to prevent the manipulation of time windows and reference regions.

APA

Arbache, J. P. (2025). Carbon Credits in the Amazon. Climate Policy Initiative. https://www.climatepolicyinitiative.org/wp-content/uploads/2025/09/Carbon-Credits-in-the-Amazon.pdf

Chicago

Arbache, João Pedro. Carbon Credits in the Amazon. Climate Policy Initiative, 2025. https://www.climatepolicyinitiative.org/wp-content/uploads/2025/09/Carbon-Credits-in-the-Amazon.pdf.

Wikipedia

{{cite report |last1=Arbache |first1=João Pedro |title=Carbon Credits in the Amazon |publisher=Climate Policy Initiative |date=September 2025 |url=https://www.climatepolicyinitiative.org/wp-content/uploads/2025/09/Carbon-Credits-in-the-Amazon.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{arbache2025carbon, author = {Arbache, João Pedro}, title = {{Carbon Credits in the Amazon}}, institution = {Climate Policy Initiative}, year = {2025}, month = sep, url = {https://www.climatepolicyinitiative.org/wp-content/uploads/2025/09/Carbon-Credits-in-the-Amazon.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }