Ahead of the COP30 climate summit, the host nation Brazil finally launched the much-talked-about TFFF, Tropical Forest Forever Facility, which differs from other green funds.
For the first time in history, countries in the global south are taking a leading role in a forest agenda, says Brazilian President Luiz Inácio Lula da Silva, according to the meeting's website , adding that he believes the launch could be one of the most important concrete results of this year's climate summit.
Receive money annually
The goal is to raise a capital base of $125 billion, of which $25 billion is a kind of security from individual countries, and the rest comes from large investors.
Investors will receive a return on their money, equivalent to a bond. But the fund will in turn invest the entire capital in securities that will give a higher return. And it is this money that will be used to pay for preserving and restoring rainforests in up to 74 developing countries. The countries are promised a fixed amount annually based on forest cover, and receive deductions for forests that are cut down or burned.
Dependence on the financial market
Norway is lending a total of almost $3 billion gradually until 2035, if certain conditions are met. Environment Minister Andreas Bjelland Eriksen describes the protection of rainforests as an investment in the future.
“The fund will help protect vulnerable ecosystems that are needed to mitigate the global climate and nature crisis,” he says in a press release .
Brazil and Indonesia have pledged 1 billion each.
The main criticism of the venture is that the fund relies on the shaky financial market, which makes the payouts of around $800 million in returns uncertain.
The new rainforest fund TFFF (Tropical Forest Forever Facility) differs from other funds in several ways. The fund is not dependent on traditional contributions, but the money invested is intended to generate a return and become an investment.
However, the fund is to generate more money than is paid out to investors, and it is to be used for grants to preserve rainforests, expected to be $4 per hectare of eligible forest.
Brazil is behind the initiative in collaboration with Congo-Kinshasa, Ghana, Malaysia, Indonesia, Colombia, the United Kingdom, Germany, Norway, France and the United Arab Emirates.
Source: COP
