REDD+ and forest protection on indigenous lands in the amazon

Seeking to reverse the loss of forests and forest carbon stocks in developing countries, the United Nations Framework Convention on Climate Change (UNFCCC)1 created the mechanism known as REDD+.2 This was introduced in a simple format at the UNFCCC Conference of the Parties (COP) in 20053 and has since evolved into its current version: reducing emissions from deforestation and forest degradation, plus fostering conservation, sustainable management of forests and enhancement of forest carbon stocks.4 REDD+ operates on the basis of performancebased payments— that is, payments are conditional on the outcome of a REDD+ action.5 Brazil can benefit from REDD+, given that it holds around 60% of the Amazon’s 5.4 million km2 of tropical forest and is under ongoing landuse pressure.6 Amazonian indigenous territories store 27.1% of the region’s aboveground carbon (28,247 MtC; i.e. 28.247 million tonnes of carbon7) on roughly 30% of the land area.8 The indigenous

communities of the Brazilian Amazon 9 have legal title over around 1 million km 2 of these forests. 10 In practice, Brazil already benefits from REDD+ funding resulting from the Green Climate Fund and the Amazon Fund. 11 The crucial role of indigenous communities in ensuring forest conservation and the sustainable use of natural resources is well recognized in academic literature. 12 The potential benefits of REDD+ projects in promoting indigenous rights and improving livelihoods have been discussed, 13 as have the challenges in implementing REDD+ 14 -including the importance of governance arrangements 15 and technical issues concerning measuring and monitoring forest carbon stocks. 16 It is recognized that developing countries-particularly Brazil-still face many hurdles in achieving a coherent REDD+ policy that addresses the needs of diverse local and indigenous communities. 17 As the rights of indigenous peoples are often challenged, the general view is that a robust legal framework that recognizes their rights, ensures community participation, and provides for good governance-including free prior and informed consent 18 and benefitsharing-is a prerequisite for effective REDD+ projects. 19 Indigenous peoples' rights are in the spotlight given the current political context in Brazil. The federal government, in power since January 2019, is notable for its discourse against environmental protection and indigenous peoples' rights. 20 25 In light of these developments-and 15 years after its inception-it is timely to consider whether REDD+ still has a role in reversing the loss of tropical forests, as well as the prospects for benefits to be derived from future REDD+ activity.
This article aims to discuss whether REDD+ in the voluntary carbon market (VCM) is currently an adequate tool for forest protection in the Brazilian Amazon and specifically on indigenous lands, considering national law and the international climate change regime. To answer this question, we consider three key elements of REDD+: the legal, technical and market requirements involved in implementing REDD+ projects. Basically, there are two distinct approaches to REDD+ as it can take the form of (i) a market-based mechanism, either within or outside the UNFCCC, which involves the trading of carbon offsets or (ii) a fund-based mechanism, whereby developing countries can request financial compensation, known as 'results- Currently, REDD+ is used as a carbon market mechanism only in the voluntary carbon market, where REDD+ carbon credits have been commercialized. The focus of this article is on this market modality of REDD+. We analyse all existing REDD+ projects in the Brazilian Amazon under Verra (formerly the Verified Carbon Standard (VCS)), 27 which is the only international carbon standard that has generated carbon credits in Brazil. Following a discussion of the different modalities of REDD+ (Section 2), we provide an overview of Brazil's emissions reduction target under the 2015 Paris Agreement (Section 3) and the existing REDD+ projects in the Brazilian Amazon (Sections 4 and 5). We then examine the key aspects of REDD+, which include legal (Section 6), technical (Section 7) and market (section 8) requirements. We conclude with an assessment of the current feasibility of REDD+ projects in the voluntary carbon market for forest protection in the Brazilian Amazon and future prospects given possible changes in market demand, including sectoral offset schemes (Section 9).

| REDD+ PROJEC TS IN THE B R A ZILIAN AMA ZON
There are currently 19 active REDD+ projects in the Brazilian Amazon registered under Verra (see Appendix 1). 46 Only one of these-the Suruí Forest Carbon Project (SFCP), which is discussed below-is on indigenous lands. Typically, these projects involve public and private sector partnerships, including national and international organizations. 47 The geographic locations of the existing REDD+ projects in the Brazilian Amazon are indicated in Figure 1.  The Suruí project involved 24 communities with a total population of approximately 1,231 people. 62 Despite their initial support, the communities became divided, with some arguing that the REDD+ project damaged their way of life. 63 The negative media coverage appeared in 2014, when Suruí members supported by the Catholic Indigenous Missionary Council criticized the use of the revenues from credit sales and demanded the end of the project. 64 In 2016, diamonds were discovered in Suruí territory, leading to an increase in illegal logging and mining. 65 The rates of deforestation were consequently higher than projected, leading to a decrease in the claimable emission reductions and a subsequent decrease in revenue from credit sales. 66 Although there are significant differences among indigenous communities in the Amazon, the Suruí project revealed some of the challenges associated with REDD+ projects on indigenous lands. One is to generate enough revenue to support the wants and needs of the proponent communities and confront external threats encroaching into the project area and compromising the project outcomes. Despite the interest in the REDD+ concept since its inception, the practical implementation of REDD+ has proven more challenging than anticipated. 67 The Suruí project illustrates how difficult it is to maintain social cohesion when the use of REDD+ revenues is perceived as inadequate by members of the community. Historical conflicts between different Suruí clans increased with the creation of the SFCP because some community members believed that project revenues were distributed unequally. 68 The SFCP also raised concerns that the introduction of offsetting the damage they cause through payments to indigenous communities based on their forest conservation efforts. 71 Nonetheless, there are also positive aspects of the Suruí project. 72 The project indicated that public-private partnerships can be established towards common climate mitigation goals. 73 While not all credits have been sold, private companies have purchased carbon offsets from the SFCP in support of the project. 74 Various REDD+ projects have been registered in Brazil under Verra. Together, they have the potential to avoid millions of tonnes of CO 2 and to be commercialized in the VCM. REDD+ projects in Brazil have also contributed to building technical capacity of local project developers and other stakeholders.

| IND I G ENOUS REDD+ PROJEC TS IN THE B R A ZILIAN AMA ZON
More than 10 years after the SFCP was created, and in light of recent developments under the UNFCCC and some new legislation introduced in Brazil, the following sections enquire into whether REDD+ projects in the VCM are currently a viable option for indigenous communities in the Amazon. In particular, we look at the legal, technical and market requirements involved in implementing REDD+ projects in the VCM.

| LEG AL REQU IREMENTS FOR REDD+ PROJ EC TS
The discussion concerning the legal requirements for REDD+ projects proposed in this section begins with an analysis of whether Brazil's national law currently allows REDD+ projects to be devel-

| REDD+ under national law
There is currently no specific law or policy in Brazil regulating REDD+ projects in the VCM. In the absence of specific legislation regulating REDD+ as a market-based mechanism, this section examines national laws and policies that are relevant to such REDD+ activitiesfor example, regarding climate change, fund-based REDD+, forests and indigenous peoples' rights. Moreover, REDD+ projects must ensure equitable benefitsharing, both financial (payments for carbon credits) and nonfinancial (such as recreational and educational activities). Law activities involving the use of genetic heritage and access to traditional knowledge. 131 This law is relevant to REDD+ projects based on an expansive approach to benefit-sharing, which encompasses not only the use of genetic resources but also the conservation and sustainable use of biodiversity more broadly. 132 Law 13.123/2015 requires benefit-sharing agreements, including a description of the products subject to economic exploitation, duration of the activity, methods of benefit-sharing, rights and responsibilities, intellectual property rights, termination, penalties and dispute settlement methods. 133 The right to benefit-sharing is also recognized in various international treaties to which Brazil is a party. 134 REDD+ projects in the VCM involve the signing of contracts or other arrangements among local communities and project partners.
If REDD+ projects limit indigenous peoples' rights, such as land rights, or fail to meet the legal requirements discussed above (such as FPIC and benefit-sharing), such contracts or arrangements can be considered illegal and/or unconstitutional. These requirements under national and international law offer an important safeguard to indigenous peoples, making their consent a prerequisite for the establishment of REDD+ projects and recognizing their rights as the main beneficiaries of REDD+ revenues.

| Ownership of REDD+ carbon credits
The ownership of carbon credits resulting from REDD+ projects developed in the VCM can be difficult to establish as they often involve several stakeholders, including communities, local governments, nongovernmental organizations and private actors. As noted above, indigenous peoples have the exclusive use right to the riches of the soil, rivers and lakes within their lands. 135 The Indigenous Peoples' Statute recognizes that this right includes the right to the possession and use of natural resources and all utilities on indigenous lands. 136 The Brazilian Civil Code also recognizes that 'the fruits and other products of a thing, even when separated, belong to its owner'. 137 REDD+ projects generate tradable carbon credits, which logically are the 'fruits' accrued from the forest through REDD+ activities.
Arguably, carbon credits deriving from REDD+ projects in the VCM are owned by indigenous peoples, who have exclusive use rights to the riches of the soil, including forests, and own the 'fruits' of a thing-which, for REDD+ projects, are carbon credits. Consequently, indigenous communities are entitled to decide how carbon revenues are to be shared among project partners. As noted above, carbon credits from the SFCP were recognized as being wholly owned by the Suruí people through Metareilá. 138 It is suggested that, even if carbon ownership is not nationally regulated, there is a legal assumption that emission reductions would be treated like any other economic benefit of a particular activity. 139 The entity that has a right to the forest land is usually recognized as the owner of carbon rights. 140 Having discussed the main legal requirements for developing REDD+ projects in the Brazilian Amazon, we next examine whether such projects are currently a viable option for indigenous communities by considering two other key aspects of REDD+ projects in the VCM: the technical and market requirements.

| TECHNIC AL REQUIREMENTS FOR REDD+ IN THE VOLUNTARY MARKE T
The first step in any forest carbon project is to identify a suitable standard and methodology. 141 Currently, the most used and comprehensive carbon standard is Verra. 142 Other standards with REDD+ methodologies include, for example, Plan Vivo, the Gold Standard and the American Carbon Registry. Carbon market standards publish methodologies and guidelines for project proponents to follow in order to deliver REDD+ projects and earn carbon credits. Verra has several methodologies that address different baseline scenarios in various sectors (such as energy, transport, waste, agriculture and forestry), including REDD+ methodologies. 143 Despite the diversity of methodologies, forest carbon projects, such as REDD+, involve five basic steps from the initial project design to completion: (i) feasibility study for estimating the carbon stocks and potential carbon credits; (ii) field survey to confirm the projected carbon stocks; (iii) preparation and submission of project documents to the selected standard (such as the project design document and monitoring plan); (iv) verification and validation 144

| REDD+ MARKE T REQUIREMENTS
Verra is currently the only standard to have REDD+ carbon projects generating carbon credits in Brazil, with 21 verified forest carbon projects in total. 152 The first Brazilian REDD credits (known as Verified Carbon Units, or VCUs) were issued in 2012 to a project avoiding planned deforestation in the Brazilian Amazon. 153 The carbon credit information for REDD+ projects globally is publicly available on Verra's database. We used this database to calculate the total number of credits generated by Brazilian projects between 2009 and 2020. Verra issued 18.98 million carbon credits to Brazilian forest projects in this period, 57% of the 33.6 million audited and claimable emission reductions generated by these projects (see Figure 2). As of August 2020, just 12.21 million credits had been 'retired', meaning sold. Once carbon credits are purchased, they are transferred to the buyer of the credits and then retired on behalf of the offset buyer. This means that the offset is removed from the market to ensure that it cannot be sold again. 154 149 The VCS has a tool for assessing the additionality of a proposed project, which involves a four-step process. 150 Olander and Ebeling (n 144). 151 Examples of REDD+ projects funded by the private sector include the CIKEL Brazilian Amazon REDD APD project <https://www.vcspr oject datab ase.org/#/proje ct_detai ls/832>, the Ecomapua Amazon REDD project <https://www.vcspr oject datab ase.org/#/ proje ct_detai ls/1094> and the Envira Amazonia Project <https://www.vcspr oject datab ase.org/#/proje ct_detai ls/1382>. Project proponents face large upfront costs to develop projects and issue carbon credits. One of these costs is a fee applied to each credit when issued. To minimize the costs, proponents can choose not to issue verified credits that they cannot sell. This avoids the issuance fee until a sale is guaranteed. This strategy has an impact on a project's verification process. Our analysis shows that 11 of the 21 projects still held unissued credits from a previous verification when the next verification was due. It is likely that proponents cannot justify the high auditing costs for projects due to the lack of sales and the low values they currently experience on the voluntary market.
Forest carbon projects traditionally had a small share in international carbon markets. 155 The reasons for this relate to their high market price and the uncertainties related to REDD+ projects. 156 The cheapest carbon credits often come from renewable energy projects. 157 There has been a recent increase in the volume of offsets from REDD+ projects in Latin America, with almost all projects located in Peru. 158 The high costs of implementing REDD+ projects in the VCM and the related higher market price compared to other offsets-for example, from energy projects-are well known. 159 Some of the costs to be factored into REDD+ projects include community engagement activities, technical services, consultancy fees, legal services, auditing, carbon registry and broker fees. There are also high risks associated with REDD+, which is a factor limiting private sector investment. 160 Common risks include illegal activities (such as logging, mining and agriculture) threatening forest project areas, leakage, permanence, and the impacts of natural events (such as forest fires and plagues).
Globally, the VCM has suffered from an oversupply of carbon credits 161 and forest carbon projects have met with relatively low demand. 162 Prices for REDD+ offsets fell 47 percent between 2016 and 2018 (from US$ 4.40 to US$ 2.35 per tonne). 163 In 2019, renewable energy projects dominated transactions in the VCM by volume, although REDD+ was the most popular project type across all categories. 164 The VCM is also driven by speculation about future com-pliance carbon markets. As the future of a global carbon market remains uncertain, many investors have engaged in the VCM only at very small scales. 165 The longer the uncertainty remains, the more likely it becomes that most investors will wait to see how the market develops. 166 There may be an increase in demand for offsets in the VCM driven by the operationalization of the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) adopted in 2016 by the members of the International Civil Aviation Organization. 167 Airlines will be expected to purchase carbon offsets to compensate a percentage of the growth in CO 2 emissions above the 2020 level. With the proposed implementation of CORSIA, starting with a pilot phase (2021-2023), 168 the resultant increase in demand for offsets may address the current oversupply seen in the VCM. The timelines for the purchasing of offsets, and how this scheme will relate to Article 6 of the Paris Agreement, are currently unknown. It is also uncertain whether the Brazilian government will support REDD+ projects as a market mechanism and create a national carbon market in the future. The low demand and price for forest carbon credits in the VCM, which are associated with the stringent and costly technical requirements for implementing REDD+ under international standards such as Verra, indicate that REDD+ projects in the VCM may not currently be an attractive market option for protecting forests in the Brazilian Amazon.

| CON CLUS ION
REDD+ as a market mechanism in the voluntary market, although not prohibited under Brazilian law, currently faces significant barriers due to uncertainties in the international climate change regime regarding a future carbon market, and due to technical and market constraints associated with the implementation of REDD+ projects in the VCM.
To be an effective tool for forest protection, REDD+ projects in the VCM must provide an ongoing source of income for project proponents, who can be either private landowners or communities such as indigenous peoples. REDD+ VCM projects can effectively provide a reliable source of income if carbon credits are sold regularly and the revenues arising out of REDD+ credit sales are reverted back to project proponents who, based on such payments, have the capacity and the commitment to ensure that their forests are maintained. If REDD+ in the VCM ensures a regular source of income, it can become a driver for forest protection. When project 155 W van der Gaast, R Sikkema and M Vohrer, 'The Contribution of Forest Carbon Credit proponents can rely on continuous REDD+ VCM credit sales, they are less likely to engage in or allow unsustainable activities, such as logging or forest conversion. REDD+ projects in the VCM then act as an incentive for forest conservation over destructive practices. However, if REDD+ VCM projects are unable to provide a sustainable source of income for project proponents, due to low or irregular credit sales, they are unlikely to prevent activities such as mining, commercial logging and industrial-scale cropping, whether legal or illegal. Our analysis of REDD+ VCM projects in the Brazilian Amazon revealed that there has been limited demand, resulting in low credit sales. Consequently, revenues have not provided an effective source of income for project proponents. The current market scenario for forest carbon credits in the Brazilian Amazon may, however, change driven, for example, by the introduction of future compliance markets, either in Brazil or internationally, or due to the uptake of sectoral offset schemes such as CORSIA. If this occurs, REDD+ projects in the VCM may become an attractive marketbased option and tool for forest conservation.
Currently, there is no certainty as to whether the UNFCCC will endorse a market-based approach to REDD+ under the Paris