Deforestation and forest degradation represent a significant fraction of the annual worldwide human-induced emission of greenhouse gases to the atmosphere, the main source of biodiversity losses and the destruction of millions of people's homes. Despite local/regional causes, its consequences are global.

Protected areas (PAs) now shelter 54% of the remaining forests of the Brazilian Amazon and contain 56% of its forest carbon. However, the role of these PAs in reducing carbon fluxes to the atmosphere from deforestation and their associated costs are still uncertain.

This paper synthesizes principles and concepts about how voluntary carbon market compensation for reduced deforestation - market-based REDD - can help cut global emissions equitably and effectively, while contributing to development goals, protecting biodiversity and watersheds and benefitting indigenous and rural peoples and tropical nations. Several of these principles have also been articulated by various governments as well as Amazonian social movements. This paper also addresses questions that some NGOs and policy makers have raised about how REDD would work.