Avoided Deforestation (REDD) and Indigenous ... - Amazon Fund

In the case of Brazil, the proliferation of emission reduction or carbon sequestration
projects has evolved under the general rule that credit ownership is derived from the main rights
attached to each project activity. In that regard, the person or entity who has legal title, controls/
owes project activities that generate the credits, or is a legal beneficiary of their economic results,
owns the credits. 29
As discussed above, the Brazilian Federal Constitution and the relevant laws regarding
Brazilian Indians’ protection grant them the exclusive usufruct regarding the exploitation of
natural resources located on their land (including forest resources) in a sustainable manner and
with the main goal of preserving natural habitats.
Federal Decree Nº 5,051/04, Article 7, paragraph 1 internalized the Convention ILO 169
of 1989, guarantees to Brazilian Indians “the right to decide their own priorities for the process of
development as it affects their lives, beliefs, institutions, and spiritual well-being and the lands
they occupy or otherwise use, and to exercise control, to the extent possible, over their own
economic, social, and cultural development”.
Following this trend, as mentioned above, the Brazilian Federal Constitution and the
Brazilian Indians Statute set forth that Brazilian Indians have exclusive usufruct over the resources
inside their land, and the economic benefits generated by its use shall belong to them.
In addition, Article 3 of the Forest Code establishes that the use of forest resources on
Brazilian Indians’ land shall be performed only by Brazilian Indians with the implementation of
sustainable forest management regime in order to attend to their subsistence.
Moreover, Article 225 of the Brazilian Federal Constitution also establishes that all
Brazilians, including the Brazilian Indians, have the duty to preserve and restore the essential
ecological processes and provide for the forest management of species and ecosystems.
29 So far, the only exception to this rule relates to the Federal Government’s claim over the credits resulting from
renewable energy projects under the Programme of Incentives for Alternative Electricity Sources (PROINFA). PROINFA
promotes the development of renewable sources of energy. One of PROINFA’s objectives is to reduce greenhouse gas
emissions by almost 2.5 million tonnes of CO e per annum. This governmental claim over carbon credit ownership
2
(which is assigned to Eletrobras, the publicly owned energy company responsible for PROINFA’s implementation) was
challenged by some private investors and is pending review by the Brazilian Supreme Court (Writ of Mandamus Nº
26,326 – Brazilian Supreme Court). For further information on PROINFA, please see Law Nº 10,438 of April 26, 2002;
Federal Decree Nº 5,025 of March 30, 2004, amended by Federal Decree Nº 5,882 of August 31, 2006. It is important to
note that the Wind Power Auction conducted by Aneel (The Brazilian Electric Energy Agency) on December 2009 also
reflected an important shift from the previous position of the government towards retaining the carbon credits from
the PROINFA projects to Eletrobras. Under this Wind Power Auction, the carbon credits were assigned to the bidders,
in alignment with the general rule of carbon credit ownership discussed in this paper.
Av o i d e d d e f o re s t A t i o n (redd) A n d i n d i g e n o u s p e o p l e s: experiences, chAllenges A n d o p p o r t u n i t i e s in t h e A m A zo n c o n t e x t 133