The Brazilian Supreme Court and the Climate Fund Case

In PSB et al v Brazil, several Brazilian political parties (the Partido dos Trabalhadores (PT), the Partido Socialismo e Liberdade (PSOL), the Partido Socialista Brasileiro (PSB) and Rede Sustentabilidade) filed a Direct Action of Unconstitutionality by Omission (case number ADO 60) in the Federal Supreme Court of Brazil, which was subsequently admitted by the Court under a different constitutional action - an Action for Breach of a Fundamental Precept (case number ADPF 708). The claimants alleged that the Federal Government failed to take measures to ensure the proper operation of the National Climate Change Fund (Fundo Clima), which is a financial instrument of Brazil's National Policy on Climate Change and is designed to provide funding for climate mitigation projects and studies. The claimants alleged that these omissions by the government, including unduly suspending the Climate Fund in 2019 and 2020, as well as various other climate-related actions and omissions, were unconstitutional and had led Brazil to a state of regression and a lack of protection in environmental matters.

According to the claimants' summary of the ADPF, "[...] Climate change, global warming and the preservation of tropical forests are all issues that are at the top of the global agenda. Deficiencies in addressing these matters have drawn international disapproval towards Brazil," with it being further noted that, if the situation described in the initial petition were confirmed, it would reveal "[...] the existence of an unconstitutional state of affairs in environmental matters, requiring structural measures.... It is worth reiterating: environmental protection is not a political option, but rather, a constitutional duty."

In a preliminary decision in the aforementioned action, Justice Luís Roberto Barroso recognised that there are serious economic and social consequences stemming from Brazil's failure to implement environmental policies, even after the country committed to international agreements. He noted that, based on technical data, "in Amazônia Legal alone, over the last 50 years deforestation accounts for approximately 800,000 km², roughly 20% of the original area." Pertinently, the Judge demonstrated a clear concern over the lack of effective public policies on the matter, stressing that in recent years, Brazil's determination to meet environmental goals has shown signs of waning.

After conducting a multidisciplinary public hearing, the Supreme Court issued its judgment which found that the Federal Government had committed an omission by its failure to fully allocate the National Climate Change Fund's resources for the year 2019 and part of 2020. The Court, therefore, prohibited, in an exemplary manner and based on the merits, the witholding of money from the Fund's authorised budget, and determined that the Federal Government was under a constitutional duty to take the measures necessary to ensure the Fund's operation and the consequent allocation of resources to climate mitigation projects.

Justice Luís Roberto Barroso, who delivered the Court's lead judgment, stated that, in light of extensive evidence, as well as the scientific context, the Brazilian government's omission during the year 2019 and part of 2020 was evident. According to the Justice, information from the Senate's Environmental Commission revealed that the failure to allocate resources was a "deliberate decision of the Executive Branch" intended to be sustained until it was possible to modify the constitution of the Fund's Management Committee. This alone constituted an unconstitutional omission, without regard to the fact that such a deliberate failure would also amount to a violation of the principle of the separation of powers, as had already been upheld by doctrine.

Justice Barroso dismissed the Ministry of the Environment's assertions that the resources had not been fully allocated to the Climate Fund in 2019 and part of 2020 because a new regulatory framework for waste disposal was in the process of being developed. According to Justice Barroso, on an objective view, the resources of the Climate Fund are not exclusively or primarily intended for the waste disposal sector. Furthermore, the Annual Resource Allocation Plan (PAAR) for the years 2020 and 2021, which was subsequently approved, did not limit itself to allocating the resources that had been frozen in 2019 purely to waste disposal but, instead, directed them to all available funding lines at the National Bank for Economic and Social Development (BNDES). According to Justice Barroso, all of the reimbursable resources from 2019 were allocated by the PAAR for the years 2020 and 2021 to the BNDES and prioritised for urban environmental purposes. Meanwhile, the non-reimbursable resources were fully allocated to the government of Rondônia's Zero Landfill (Lixão Zero) project, with BRL 212,772.00 retained to meet the fiscal targets.

It is stated in the judgment that withholding resources from the Fund to cover possible contingencies should be prohibited, as the allocation of these funds involves not only the assessment and deliberation of the Executive but also of the Legislative Branch. The Court declared that the "Executive cannot simply ignore the allocations determined by the Legislative at its discretion, under penalty of violating the principle of the separation of powers." Furthermore, the resources are legally tied to specific activities and, for this reason, cannot be contingent in accordance with the Fiscal Responsibility Law (LRF) — Complementary Law 101/2000.

According to the Court, the prohibition on withholding funds for contingencies is justified due to the critical environmental situation in Brazil, and it is important to emphasise the constitutional duty to protect the environment (Article 225 of the 1988 Federal Constitution). In fact, data examined by the Court in this case, including satellite images, showed that in the year 2021 deforestation had increased by more than 22% and reached an area of 13,235 km², representing a 76% increase in annual deforestation compared to 2018 figures.

Justice Edson Fachin, in his concurring opinion, grounded on a broad scientific and doctrinal basis, in a timely manner, went even further and opined that the government should be required to publish a quarterly statistical report showing what percentages of the Climate Fund have beeen spent in five areas (energy, industry, agriculture, LULUCF (land use, land-use change, forests), and waste) and to prepare, with reasonable frequency, the National Inventory of Greenhouse Gas Emissions and Removals. A part of Justice Fachin's opinion regarding the constitutional responsibility to protect the environment for future generations deserves specific mention:

The Federal Constitutional Court of that country recognized, based on the teachings of Ingo Wolfgang Sarlet, Gabriel Wedy and Tiago Fensterseifer, the violation of the "state duties of environmental and climate protection" within the scope of the Federal Climate Protection Act (2019), which would have distributed the burden of fundamental rights restrictions—particularly the right to freedom—disproportionately between present and future generations due to the regulation of greenhouse gas emissions. The Court recognized that the fundamental right to freedom has an inter- or transgenerational dimension, which must be protected by the State and is expressed through "intertemporal guarantees of freedom" (intertemporale Freiheitssicherung).

Another noteworthy point is that the Supreme Court's judgment consolidates and strengthens the jurisprudential orientation already envisioned in other rulings of the Court by engaging in a dialogue with recent jurisprudence of the Inter-American Court of Human Rights (IACHR) on environmental matters, such as Advisory Opinion 23/2017 regarding the Environment and Human Rights and the case of Indigenous Communities Members of the Lhaka Honhat (Nuestra Tierra) Association v Argentina (2020). Furthermore, the decision assigns to international treaties concerning environmental issues the same status and special normative hierarchy that are already acknowledged by the Supreme Court for international human rights treaties in general, namely, a supra-legal hierarchy. Regarding this matter, it is important to clarify that the Supreme Court, when interpreting Article 5, paragraph 2, of the 1988 Federal Constitution, in its judgment in Extraordinary Appeal 466,343 in 2008, consolidated the understanding that international human rights treaties ratified by Brazil—such as, for example, the American Convention on Human Rights (1969), the San Salvador Protocol (1988), and the treaties of the UN global system—possess supra-legal normative status.

Therefore, climate litigation in Brazil has now reached an indisputable constitutional level and is being taken very seriously by Brazil's Supreme Court as demonstrated in cases judged this year, 2024.

In ADPF 760 and ADO 54, adjudicated in March 2024, the STF decided that the federal government must ensure the reduction of deforestation in Amazônia Legal to a rate of 3,925 km per year by 2027 and to zero by 2030.

On this occasion, the STF adhered to a proposal made by Justice Flávio Dino to authorise the opening of extraordinary credit in the 2024 fiscal year to ensure the continuation of the federal government's actions that were resumed during the administration of Luiz Inácio Lula da Silva (PT).

Moreover, the Judiciary's Environment and Climate Change Observatory, which operates alongside the National Council of Justice, is to receive monthly reports on the progress of measures to combat deforestation and environmental monitoring.

It was also decided that:

• the federal government is to monitor the performance of agencies responsible for environmental oversight and for combating any actions against the environment;
• measures are to be implemented to reduce deforestation in Amazônia Legal by 80% by 2027 and by 100% by 2030;
• the federal government is to complete the fifth phase of the Action Plan for the Prevention and Control of Deforestation in Amazônia Legal (PPCDAm) by 2027, which includes goals related to the recovery of native vegetation, the adoption of sustainable practices in agriculture and livestock, training and capacity building for socio-biodiversity chains and family farming, among others;
• a timetable is to be included in the PPCDAm to ensure budget allocation and release of resources from the Fundo Amazônia;
• a plan is to be submitted to strengthen from an institutional standpoint three fundamental Brazilian government protection agencies, IBAMA (Instituto Brasileiro do Meio Ambiente e dos Recursos Naturais Renováveis), ICMBio (Instituto Chico Mendes de Conservação da Biodiversidade) and FUNAI (Fundação Nacional dos Povos Indígenas);
• reports are to be made available online containing the actions and results of the measures adopted in compliance with the orders given by the STF;
• extraordinary credit is to be opened in the fiscal year 2024 to effectively continue government actions to combat deforestation, with a prohibition on budgetary contingency;
• the presidents of the Chamber of Deputies and the Senate are to be notified that they must consider the STF's decision when preparing future budgets.

  
In ADPF 760, specifically, Justice Cármen Lúcia, the rapporteur of the case, acknowledged in her vote a state of unconstitutionality regarding environmental affairs, in light of the facts and grounds that characterise a massive, widespread and systematic affront to the environment. According to Justice Lúcia, this unconstitutional state of affairs arises from the deforestation of the Amazon Rainforest and the Brazilian government's omission regarding its protective role over an ecologically balanced environment. In the decision, it was ordered that the federal government and federal agencies and entities were to formulate and submit within a 60-day period an effective and satisfactory implementation plan related to the Action Plan for the Prevention and Control of Deforestation in Amazônia Legal, according to "schedules, targets, objectives, deadlines, projection of results with dates and expected indicators, including those for monitoring and other necessary information to ensure the maximum effectiveness of the process and the efficient execution of public policies."

In ADPF 743/DF, Rede Sustentabilidade raised concerns about the federal government's omission regarding the ongoing wildfires in the Pantanal region of Mato Grosso, which, in 2020 alone, affected 2.3 million hectares, according to data from the National Center for the Prevention and Combat of Forest Fires. In this lawsuit, not only were the environmental damages caused by the constant wildfires in the Pantanal region questioned, but also their effects on public health, demonstrating that extreme events such as massive wildfires also have a direct impact on climate change, affecting the fundamental right to an ecologically balanced environment, as well as the constitutional protection of life, health and physical integrity.

In ADPFs 743, 746 and 857, the STF determined that the federal government must develop a plan for the prevention and combat of wildfires in the Pantanal region, with monitoring and the setting of goals, to ensure the preservation of this region.

At the same time, however, the STF denied the request for recognition of massive violations of fundamental rights (i.e., an unconstitutional state of affairs) regarding the policy for combating wildfires in the Pantanal and the Amazon regions, although it did acknowledge the need for measures to be taken to comply with the right to an ecologically balanced environment. On this point, the majority followed the vote of the rapporteur, Justice André Mendonça, while Justices Cármen Lúcia, Luiz Fux and Edson Fachin dissented. For the dissenting opinion, even with the advancements of the previous year (2023), the situation in environmental policy still appears unconstitutional.

Among the measures to be adopted is the development by the federal government of a plan for the recovery of the operational capacity of the National System for the Prevention and Combat of Forest Fires, as well as an action plan with concrete measures for processing the information provided to the Rural Environmental Registry (Cadastro Ambiental Rural or CAR).

Authors:

Gabriel Wedy is a federal judge and a professor of the Graduate Program and at the School of Law at the Universidade do Vale do Rio dos Sinos(UNISINOS) and at the School of the Federal Judiciary (ESMAFE). He holds Post-Doctoral, Doctoral and Master's degrees in Law. Professor Wedy is a member of the World Commission on Environmental Law (IUCN- WCEL) and European Law Institute (ELI). He is a vice-president of Law for a Green Planet Institute (IDPV), and former president of the Association of Federal Judges of Brazil(AJUFE). He is a former visiting scholar at Columbia Law School (Sabin Center for Climate Change Law) and at Universität Heidelberg (Instituts für deutsches und europäisches Verwaltungsrecht).

Patricia Iglecias is a Professor and Chief of Sustainability Officer at University of São Paulo (USP); President of Law for a Green Planet Institute(IDPV). Partner of Wald Advogados; Former President of the São Paulo State of Environment Company (CETESB). Former State of São Paulo Secretary of Environment.