Navigating Jurisdictional REDD+: A Pricing Guide for Tropical Forest Nations

New analysis from EDF reveals how Jurisdictional REDD+ carbon credits are set to increase in price by 2028. The report, Navigating Jurisdictional REDD+: A Pricing Guide for Tropical Forest Nations, is powered by data from MSCI Carbon Markets, and is intended to empower forest nations with insights to more equitably negotiate JREDD+ contracts with buyers.

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The report shows that up to 300 million tons of annual supply could come from jurisdictions in the ART-TREES pipeline by 2030 – six times the size of REDD+ demand today. While REDD+ prices have fallen 70%+ in the last 12 months, “premium” REDD+ projects are trading at double the price of average projects, with a widening premium. A survey of 478 corporate buyers indicates a 20 - 40% willingness to pay a premium for JREDD+ credits over REDD+.

As a result, EDF estimates that today, JREDD+ credits have an estimated market value of $6 - $12 depending on the vintage of the credit and individual jurisdiction considerations. However, the LEAF Coalition has functionally set a floor price of $10, while Guyana’s 2022 deal with Hess Corporation has set an upper bound for prices in the market.

Looking forward, average JREDD+ prices are forecasted to grow to $15 in 2028. 162 scenarios were modelled and tested with experts to determine this forecast. Nonetheless, the report also notes that “Given the limited trading volumes in the VCM at large – and specifically within the nascent JREDD+ market – forecasts, and even price estimates today, can be highly imprecise and one or two large policy changes could shift pricing dramatically higher.”

Beyond price estimates today and future forecasts, the report provides in-depth analysis into the current state of the VCM, policies impacting JREDD+, detailed insights into pricing trends, and contracting considerations beyond price for forest nations.

Download report in English

Please select your language to access the report: English | Español | Português.

Report author Dylan McCall-Landry, Director of Sustainable Finance at EDF, notes:

There is no way to avoid the worst impacts of climate change without drastically reducing tropical deforestation by 2030. Carbon finance via jurisdictional scale programs can provide vital resources to reverse current economic incentives, so that forests are worth more alive than dead, while also benefiting local governments, Indigenous Peoples and Local Communities, and biodiversity. This report aims to enhance market transparency, empowering forest nations to better navigate carbon markets and secure vital financing to conserve these crucial ecosystems.