Jurisdictional Carbon Credits Explained: How Whole Regions Issue Credits

Most carbon credits are issued for a single project: one forest, one cookstove programme or one farm with its own boundary. A jurisdictional credit works at a larger scale. Instead of measuring one project area, it counts emissions reductions across a whole national or subnational area, such as a state, a province or a country, and compares them with a reference level set for that same area.

The reason for the approach is leakage and fragmentation. A project that protects one block of forest can push clearing onto neighbouring land, and a set of separate projects can leave the drivers of deforestation untouched across a region. A jurisdiction-wide programme can count the effect of land-use rules, enforcement and policy changes, not only the activity inside one fence. That is the argument for it. The difficulty is that the accounting becomes much harder to check.

The central figure is the reference level, sometimes called a forest reference emission level. It estimates how much forest carbon the jurisdiction would have lost in a given period if current trends continued. Emissions measured over the period are then compared with that estimate, and reductions below it can be credited. The reference level is a benchmark and not a measurement, so its assumptions matter as much as the satellite data behind it. If the level is set too high, the programme issues credits for reductions that would have happened anyway.

A jurisdiction-wide forest is also exposed to reversal, because fire, drought or a change of government can release stored carbon after credits have been issued. Programmes handle this in different ways, often by setting aside a share of units in a buffer or by holding a reserve against future losses. The size of that reserve, and who decides when it can be released, is one of the first things to check when a programme's units are compared with those from a single project.

Most jurisdictions already contain project-level activity, such as community forest management, private concessions or earlier carbon projects. These are usually described as nested projects. Their reductions must be reconciled with the jurisdiction's accounts so that the same tonne is not sold once as a project credit and again as part of a jurisdictional unit. Verra's Jurisdictional and Nested REDD+ framework and the Architecture for REDD+ Transactions (ART TREES) standard are two systems that set out how this reconciliation should work. Their rules differ in detail, so buyers should not assume that a credit from one carries the same meaning as a credit from the other.

International transfers add another layer. When a host country sells units abroad under Article 6 of the Paris Agreement, it is expected to make a corresponding adjustment, meaning it no longer counts that reduction toward its own climate target. Without that adjustment, the buyer and the host country can both claim the same reduction. For a jurisdiction that reports emissions for its whole territory, the adjustment has to be tracked across every unit it sells, which is why the accounting systems behind these programmes are so detailed.

For buyers, a few checks cover most of the risk. Ask how the reference level was set, which data were used and whether the method has been independently reviewed. Ask how nested projects are handled and whether they are counted once. Look for a clear safeguards framework that covers consultation with Indigenous peoples and local communities, and for a description of how benefits are shared. Confirm whether the units carry a corresponding adjustment, and whether the claim you plan to make refers to the jurisdiction or to a specific project.

The jurisdictional approach moves the question from whether one project works to whether the accounting for an entire region holds up. A credit from such a programme is only as strong as the reference level and the records that sit behind it, so the useful test is not the label on the unit but the rules that produce it.