Selling out the Amazon: Brazil Seeks Carbon Credits for Controversial Dams (Watch this! #1)

By Katy Yan, China Programme Coordinator, International Rivers

For new CDM projects registered after 2012, the EU has decided that it will only buy carbon credits if projects are located in Least Developed Countries (LDCs). Therefore, this year sees a surge in projects applying for carbon credits particularly from Brazil, India, and China, because starting in 2013, these emerging countries will no longer be able to register new projects able to sell credits to the European Union’s Emissions Trading Scheme (the largest carbon market in the world).

An early indication of the desperation felt by these countries in their last year of eligibility is the appearance of two clearly non-additional and highly controversial Brazilian hydropower projects in the CDM pipeline. The 3,150MW Santo Antônio Hydropower Project on the Madeira River and the 1,820MW Teles Pires Dam in the Tapajós Basin are currently seeking carbon credits through the CDM. Both have faced sustained local and national opposition. If both are registered, purchasers of their carbon credits would be allowed to release 76 million metric tons of CO2-equivalent over ten years (equal to the emissions from 16 coal-fired power plants).

Santo Antonio and Teles Pires: Projects Problematic in Many Aspects

Civil society groups have sent letters to the validator, Perry Johnson Registrars Carbon Emissions Services (which will be reviewing both projects), expressing the following concerns:

  • Both projects violate Brazilian legislation and international agreements regarding human rights and environmental protection: Brazilian civil society groups have filed several civil action lawsuits against Santo Antônio that question the legality of the project’s installation license. On March 26, 2012, a federal judge in Brazil recently decided that Teles Pires’ installation license was invalid due to a lack of free, prior and informed consultation.
  • Both projects could lead to devastating and irreversible environmental and social impacts: The Santo Antônio Dam has already caused irreparable damage to the livelihoods and cultures of riverine populations, indigenous communities, urban populations, and family farmers. These problems are becoming progressively worse. The CDM is meant to promote sustainable development, but this project is a clear example of destructive development. Thirty-three Brazilian and international civil society groups signed on to this submission to Perry Johnson Registrars. In December 2011, indigenous leaders sent a letter to the Brazilian government expressing grave concerns with the Teles Pires Dam’s environmental licensing process.
  • If registered, the projects would allow purchasers of its carbon credits to release 76 million metric tons of CO2-equivalent over 10 years: All projects in the CDM are required to prove that they would not have been built without financing from carbon credits (in other words, that they are ‘additional’). However, the Santo Antônio project is a business-as-usual project that is already operational, which means that if it is registered, industrialised countries will be allowed to emit beyond their targets without causing the equivalent emissions to be reduced in a developing country. Both projects have also already received significant funding from the Brazilian National Development Bank, the energy company Eletrobras, state pension funds, etc.
  • Both projects are net carbon emitters and destroy critical carbon sinks in the Amazon: The CDM is meant to catalyze climate-friendly technologies. However, researchers have shown that methane from dams is responsible for around 4% of human-caused climate change, and this is particularly significant for dams in the tropics, where emissions are highest. The developers for both projects claim that the project will emit zero greenhouse gases, which ignores current research. Moreover, increased migration and land speculation associated with Santo Antônio’s construction have lead to deforestation of the Amazon rainforest. The Teles Pires Dam is linked to an industrial waterway aimed at increasing exports from large-scale soybean agribusinesses, which will lead to clearing of the cerrado and Amazon rainforest. The Amazon rainforest plays a critical role in carbon storage and regulating the global climate system.

A series of dams are being planned for the mighty Tapajós River, a major Amazon tributary. The dams would flood national parks, reserves and indigenous lands. Courtesy: International Rivers

The biodiversity of the river Madeira is threatened by the Santo Antonio dam – 11 ton of fish already died during the construction works

The CDM has been abused for years by project developers who’ve used these credits to provide a bit of extra icing on the cake for projects that have already been financed and built. Instead of responding with stronger rules for ascertaining environmental integrity, which could have kept out controversial projects such as the Teles Pires and Santo Antônio dams, the CDM Executive Board decided last year to switch to a risk-based approach to be able to process all these requests. Such a risk-based approach will allow the Board to only conduct spot checks and not evaluate each project individually, making it even more difficult to identify and eliminate harmful projects.

We Need to Speak Out!

This year, it will be more important than ever for civil society to be engaged in the CDM debate in order to ensure that damaging projects do not slip under the radar.

What we can do:

More Information: