Brazil is promoting a new investment fund, the Tropical Forests Forever Facility (TFFF), designed to incentivize tropical forest preservation by making standing forests economically more valuable than cleared ones. This innovative scheme, developed with input from countries including the UK and Indonesia, aims to attract private investment by initially securing government funding to de-risk the project.
Despite the UK's significant role in designing the TFFF, Prime Minister Sir Keir Starmer decided against an immediate investment ahead of the UK's budget, a move that reportedly surprised and disappointed Brazilian officials. The UK's climate envoy stated the decision was to defer investment rather than reject it outright, with consideration to follow the budget.
Tropical forests like the Amazon are vital for global climate regulation and biodiversity but are threatened by extractive industries. Previous conservation efforts have struggled due to the lack of sustainable financial incentives.
The TFFF proposes a new economic model that pays for hectares of standing forest, not just carbon, and is structured as an investment fund rather than relying solely on aid. To launch, the TFFF requires $10-25 billion in government funding, with $5.5 billion already committed by countries like Norway, France, and Indonesia.
The World Bank will host the fund. A significant portion of the payments generated by the fund is intended for indigenous communities, who are recognized as effective forest stewards.
While the TFFF is hailed for its potential to create a financially viable model for forest conservation, a key challenge remains its ability to compete financially with highly profitable industries such as gold and oil, which governments also invest in. The success of the TFFF hinges on attracting sufficient government and private capital to offer competitive returns and payments for forest preservation.
