Tropical countries from Cameroon to Colombia could earn tens of millions of dollars a year under a novel approach to protecting the world's rainforests being launched at the COP30 summit in Brazil.
The inauguration of the Tropical Forests Forever Facility (TFFF) is expected on Thursday as global leaders meet in the Brazilian Amazon, where this year's UN climate negotiations are being held.
Brazil is courting $125 billion from governments and private financiers for a global investment fund that proposes making annual payments to developing countries for every hectare of forest they keep standing.
Why is it needed?
Most of the world's primary rainforest lies in poorer tropical countries where there is simply more money to be made cutting down trees than saving them.
Despite some improvements, deforestation rates remain at record highs globally: the equivalent of 18 football fields of primary forest was lost every minute in 2024.
Rainforests are rich in biodiversity and help regulate the climate, and destroying them releases vast amounts of stored carbon.
How does the fund work?
It first needs to find $25 billion from "sponsor" governments willing to take the first hit should the fund suffer losses. By absorbing more risk, Brazil hopes to attract another $100 billion from private investors like pension and sovereign funds.
The combined capital is ploughed into emerging markets to generate profits which, after interest repayments to investors, flow to tropical countries with low deforestation rates as confirmed by satellite.
Who stands to benefit?
Brazil expects the fund to generate $4 billion a year for conservation and has identified 74 forest-rich nations that could split the spoils.
Only countries with a low rate of annual deforestation — below 0.5 percent — would meet the criteria, and that record must be maintained to keep receiving payments.
Brazil, Indonesia and the Democratic Republic of Congo could theoretically earn hundreds of millions of dollars a year should they stamp out deforestation entirely.
Will it work?
Brazil has pledged $1 billion to the fund — the only country to commit any money so far. Indonesia has announced its intention to invest, but has not specified an amount.
Finance Minister Fernando Haddad said Brazil was confident of raising "about $10 billion by the end of next year".
Some diplomats have expressed concerns over the fund's monitoring methods and scepticism that it will receive the high credit rating needed to attract outside investors.
"If successful, this will be operating forever, protecting forests forever... it's much better to do that than keep waiting for another solution that is perfect. There is no silver bullet," said Voivodic.
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Source: TRT