Brazil is proposing a fund that would pay countries to protect tropical forests that are crucial to curbing climate change. It would generate returns, too.
What if financial markets treated trees like shareholders?
Enter the Tropical Forests Forever Facility, a new fund that Brazil, which is home to about a third of the planet’s tropical forests, is pitching to the world and that would pay developing countries a fee for every hectare of forest they maintain.
The project, first presented at the global climate summit in Dubai, last November, is now in its final stages of design and it could ultimately pay out $4 billion a year to protect forests.
The fund’s mission is to flip the economics that have long fueled deforestation. Farming, logging and other industries that drive forest destruction can boost local economies, but Brazil’s fund would effectively pay countries for services that tropical forests now perform for free, such as storing planet-warming carbon and regulating rain patterns.
With that, the T.F.F.F., as it’s awkwardly called, aims to stop what has long been considered unstoppable. Countries have been losing roughly nine million acres of tropical forest a year over the past two decades. These forests are crucial for storing planet-warming carbon and curbing biodiversity loss.
But promising ideas, like carbon credits tied to curbing tree loss and grant schemes that reward forest protection, have struggled to significantly reverse the deforestation trend globally. Payments from the T.F.F.F. may be large and predictable enough to succeed where other initiatives haven’t.
Brazil’s proposal envisions a $125 billion fund, which would make it, by some measures, the world’s biggest pot of money to help fight climate change and biodiversity loss. The Green Climate Fund, the world’s largest climate fund financing projects in the developing world, has about half of the proposed capital.
