Tropical Forests Protection Pact Hailed for Protecting Climate

California, Brazilian and Mexico States Will Link Carbon Markets

November 16, 2010

Lori Sinsley, (415) 902-8111 (mobile),
Tony Kreindler, (202) 445-8108 (mobile),

(Sacramento — November 16, 2010) A plan released today to reduce deforestation in the Acre state in the Brazilian Amazon and in Chiapas, Mexico that would be credited in California's carbon market is a historic achievement to reduce climate change, according to Environmental Defense Fund (EDF).

Governors Arnold Schwarzenegger of California, Binho Marques of Acre, Brazil, and Juan Sabines Guerrero of Chiapas, Mexico today announced that they had signed a Memorandum of Understanding (MOU) to form a Working Group to promote efforts on Reducing Emissions from Deforestation and Degradation (REDD) at the sub-national, or state, level. The cutting and burning of tropical forests accounts for roughly 15 percent of global carbon dioxide pollution, which is more than all of the cars and trucks in the world produce.

"Acre has opted for development based on preserving and wisely using its forests to honor of Chico Mendes' dream, which echoed around the world two decades ago," said Acre Governor Binho Marques. "We seek to consolidate sustainable development through a low carbon, high social equity economy. This partnership between our states will allow our economies to grow and address global climate change."

"This pact is a significant and concrete step to protect the climate by protecting the world's forests," said Environmental Defense Fund President Fred Krupp. "It also is a precedent-setting initiative as countries gear up for international climate change negotiations in December."

California, Acre and Chiapas are members of the Governor's Climate and Forests Task Force (GCF), a collaboration of 14 states and provinces in the U.S., Brazil, Indonesia, Mexico and Nigeria that was created at the first Governor's Global Climate Summit in 2008.

The MOU calls for the Working Group to make recommendations to the California Air Resources Board (CARB) by October, 2011 on how California can link its emerging carbon market to the REDD programs in Acre, Chiapas and potentially other states or provinces around the world. The board is the agency responsible for overseeing California's landmark climate and clean energy policy, AB 32, which goes into effect on January 1, 2012 and features an industry-wide cap-and-trade program.

"This understanding demonstrates international climate leadership," said EDF Tropical Forests Director Steve Schwartzman. "It clearly demonstrates that we can start to effectively combat climate change and stop deforestation in the absence of a national policy and an international agreement."

The MOU follows Acre's adoption of a State Incentives for Ecosystem Services law in October. The law creates the regulatory framework to incentivize forest protection, and generate and certify carbon credits for reducing deforestation. In 2008, the state adopted a deforestation reduction target, calculated as Acre's contribution to Brazil's national target of an 80 percent reduction below average rates from 1996–2006 by 2020.

It has reduced its emissions—more than 90 percent of which are caused by forest clearing and burning—approximately 66 percent since 2004. Chiapas also is designing a comparable state program to reduce its deforestation.

California's draft cap-and-trade regulations allow companies that are required to cut pollution to meet up to eight percent of their emissions reductions obligations from offsets, or emissions reductions that occur in sectors not directly covered by California's cap. Reductions from REDD programs would be considered offsets under California's system.