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Brazil is set to unveil an ambitious international plan that would provide up to $4 billion a year to countries that protect their tropical forests. Proponents see it as a potential game-changer for forest conservation, but some ecologists and economists are raising concerns.<\/p>\n
It could be the last and best chance to save the world\u2019s tropical forests. As international aid budgets for conservation crash and carbon offset schemes for protecting forests are widely discredited, Brazil is about to unveil an ambitious plan that would triple current finance for saving forests worldwide by channeling profits from international trade in government bonds.\u00a0<\/p>\n
The Tropical Forest Forever Facility (TFFF) is set to be unveiled by President\u00a0Luiz In\u00e1cio Lula da Silva\u00a0as a centerpiece of the U.N. climate conference in the Amazon city of\u00a0Bel\u00e9m\u00a0next month. It would create a $125 billion investment fund intended to provide up to $4 billion a year to potentially 74 tropical and subtropical nations as a reward for protecting their forests.<\/p>\n
The viability of the proposed scheme is being questioned by some ecologists and economists.\u00a0 And rich-world governments and philanthropic organizations have so far been slow to follow Brazil in pledging the seed funding thought necessary to attract private investors. But late last month the World Bank agreed to become the facility\u2019s trustee and interim host, raising hopes ahead of the TFFF\u2019s launch.\u00a0<\/p>\n
Under the initiative, countries would be paid according to satellite measurements of the extent of their standing tropical forests.<\/p>\n
The TFFF\u2019s backers see the fund as a potential jewel in the crown of green capitalism, with bond markets coming to the rescue of the rainforests. Brazilian environment minister Marina Silva told a London Climate Week audience in June: \u201cIt will mobilize large-scale capital with sustained financial flows to conserve our biodiversity.\u201d For Zac Goldsmith, British senior fellow at the Bezos Earth Fund, a potential funder, \u201cthe TFFF is the only game in town for forest finance\u2026 We will not have this opportunity again.\u201d<\/p>\n
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The World Bank will now become the administrative headquarters of the facility, as well as eventually overseeing transference of its anticipated profits to tropical countries. \u201cWith this foundation in place, the TFFF is now ready for countries to follow Brazil\u2019s lead by making their own pledges,\u201d said Brazil\u2019s finance minister Fernando Haddad.<\/p>\n
But there are concerns. Forest ecologists warn that the plan\u2019s rulebook is so loose that it could allow payouts for forests even as they are being logged. Rights activists warn that Indigenous peoples could lose control of their forests. Meanwhile, some economists argue that the project\u2019s proposed financial architecture is both risky and inherently unfair. Much of the money for forest protection would come from the high interest rates charged on volatile loans to the very countries whose forests it promises to benefit. Without those hefty payments, says Max Alexander Matthey of the University of Witten\/Herdecke in Germany, \u201cthere is no money for the forests.\u201d\u00a0<\/p>\n
A logger illegally cuts down a tree in Rond\u00f4nia state in the Brazilian Amazon.<\/span> Under the TFFF, countries would be paid initially according to satellite measurements of the extent of their standing tropical and subtropical moist broadleaf forests, at an annual rate of $1.60 per acre. In subsequent years, every acre deforested would result in a reduction in payments equivalent to at least 100 acres. Countries with an annual deforestation rate above 0.5 percent \u2014 which currently includes major forested nations such as Indonesia and the Democratic Republic of the Congo \u2014 would be barred from receiving any funds.\u00a0<\/p>\n It could potentially be a \u201cgame-changer\u201d for forest conservation, says Robert Nasi, director general of the Indonesia-based Center for International Forestry Research. If successful, it \u201ccould become a blueprint for other\u2026 critical ecosystems like peatlands and mangroves,\u201d he says.<\/p>\n Nobody doubts the need for new impetus to save tropical forests from continued invasions by farmers, loggers, and miners and the spread of wildfires. Last month, a new assessment found an upsurge in deforestation rates in the tropics, reaching a record 16.5 million acres last year and leaving the world far off track to meet the promise of governments to end deforestation this decade. \u00a0(The only good news was from the Brazilian Amazon where a sharp decline achieved the lowest rate of forest loss since 2015.)<\/p>\n As drafted, the fund \u201cwould allow payments even where industrial logging is occurring in primary forests,\u201d says one critic.<\/p>\n Meanwhile, foreign aid budgets that have funded much forest conservation in recent years are in freefall, both in the U.S. and Europe. And market-based systems of forest protection and restoration based on trading in carbon offsets are floundering. A global analysis published in October found that less than a fifth of such projects met their emissions targets.<\/p>\n So, for governments and forests alike, the investment-led TFFF \u2014 with just a fifth of the fund intended to come from governments and philanthropic sponsors, and the remainder from private investors \u2014 seems like a lifeline.\u00a0<\/p>\n It has strong backing from major environmental groups such as the WWF and Conservation International. But there are concerns among forest ecologists that the small print defining what counts as standing forest worthy of rewarding could create perverse incentives for further destruction.\u00a0<\/p>\n Most intact moist tropical forests have canopy cover greater than 80 percent. Much less usually indicates they are badly degraded, for instance by loggers, says environmental scientist Brendan Mackey of Griffith University in Queensland, Australia. Yet the TFFF\u2019s criteria for full payment currently require only 20 percent cover. \u201cThis is not scientifically credible\u201d he says.<\/p>\n An oil palm plantation on the site of former rainforest in the Democratic Republic of the Congo.<\/span> The most recent Brazilian briefing on the project argues that this loose definition recognizes the value of all standing tropical forests, \u201cnot only those classified as intact, high integrity, or primary.\u201d\u00a0Mackey agrees that such degraded forests are worth protecting and restoring, but believes that there should be a premium for forests with \u201chigh ecosystem integrity.\u201d Otherwise, as presently drafted, says Kate Dooley, an expert on forest governance at the University of Melbourne, the TFFF \u201cwould allow payments even where industrial logging is occurring in primary forests.\u201d\u00a0<\/p>\n The fund\u2019s rulebook does impose some penalties for forest degradation, but only in the case of forest fires, which it describes as a \u201cproxy\u201d for wider disturbance. This is a mistake, says Dooley. \u201cA fire in a moist tropical forest is an indication that the forest has already been severely degraded for some time.\u201d Satellites, aided by A.I. analysis, can now identify other forms of forest degradation, such as logging, roads, and mining with increasing accuracy, says Bill Laurance, an environmental scientist at James Cook University in Australia. So, critics say, the definition of degradation warranting penalties should be extended.<\/p>\n With this plan, an NGO leader says, \u201cforest protection is finally being treated as a global public good worthy of ambitious financial commitment.\u201d<\/p>\n There is a similar debate among forest Indigenous peoples and NGOs that represent them. After lobbying from rights groups, the TFFF rulebook now stipulates that while the funds it disperses will go initially to national governments, at least a fifth of the money should ultimately be devoted, directly or indirectly, to Indigenous and forest communities, who are the custodians of the majority of the world\u2019s intact rainforests.\u00a0<\/p>\n In Indonesia\u2019s rainforest, a mega-farm project is plowing ahead. Read more.<\/p>\n Many cheer this latter requirement. The Global Alliance of Territorial Communities, which represents 35 million forest people in 24 countries, sees it as \u201ca key political opportunity\u2026 to ensure fairer and more direct access to climate finance.\u201d\u00a0<\/p>\n \u201cFor all its flaws,\u201d says Matthew Owen, director of Cool Earth, a U.K.-based NGO that supports Indigenous community conservation work, \u201cTFFF signals that forest protection is finally being treated as a global public good worthy of ambitious financial commitment. It is the best chance we have to fund a halt to tropical deforestation.\u201d \u00a0<\/p>\n Satellite images show where the Amazon rainforest has been destroyed (left to right) by mining, farming, and fire.<\/span> But other activists for Indigenous communities are wary. The Global Forest Coalition, which has more than a hundred affiliated groups in 71 countries, fears that governments will not hand over money directly, but will instead give it to government agencies and private companies working with Indigenous people. And it contends the incentives for wider forest protection could become a pretext for criminalizing traditional forest uses such as shifting cultivation. \u00a0<\/p>\n Faced with such concerns, many forest activists want to help improve the rulebook and hope that flaws can be fixed. They have already achieved agreement on a ban on investments by TFFF in fossil fuels, mandatory payouts directed to the interests of Indigenous peoples, and a scientific advisory panel to refine monitoring and reporting on the state of funded forests, says Tyala Ifwanga of the European forest-policy NGO Fern. \u201cIt is far from ideal, but we are trying to make sure it can be as effective as possible.\u201d<\/p>\n A new version of the plan is due for release next month in Bel\u00e9m. Mackey is among the critics of TFFF who are optimistic. \u201cI remain supportive of the Brazil government\u2019s efforts and look forward to working with them to help with strengthening the next iteration,\u201d he says.\u00a0<\/p>\n Critics say the plan\u2019s financial architectures is designed to benefit investors first, rather than the forests and the countries that host them.<\/p>\n One big concern that may be hard to resolve, however, is the financial architecture devised to deliver revenue for investors, sponsoring governments, and the rainforest alike. It is, critics say, both inherently risky and designed to benefit investors first, rather than forests and the countries that host them.\u00a0<\/p>\n The fund is likely to work like this. Money put into the fund by private investors, such as bankers and hedge fund managers, will mostly buy assets in developing countries that pay high interest rates. These will include fixed-interest sovereign bonds sold by governments that typically yield a return of around 8 percent. But the private investors will only be paid a return of around 5 percent. The 3 percent difference \u2014 amounting to around $4 billion per year, if the project is fully funded \u2014 would be enough to pay for conservation of 2.5 billion acres of forest, roughly equivalent to all the world\u2019s natural tropical rainforests.\u00a0<\/p>\n An obvious question, notes economist Matthey, is why the investors don\u2019t buy those bonds themselves and pocket the extra cash. The answer is that the high-interest bonds are regarded by traders as risky, with a high chance of the borrowers defaulting. That is why developing countries have to offer the higher rate to entice lenders. That makes the 3 percent \u201cleftovers\u201d intended for forests a \u201crisk premium, compensating for the danger of holding volatile assets,\u201d says Matthey.\u00a0<\/p>\n Indigenous Thit men guard their forest in Southwest Papua, Indonesia.<\/span> Far from being the stable source of funding claimed by its promoters, he says, forest funding from the TFFF could easily unravel if economic conditions change. Nasi agrees: \u201cA major market crash\u2026 could decimate the investment fund\u2019s value, forcing a prolonged suspension of payments and threatening the entire model.\u201d\u00a0<\/p>\n TFFF\u2019s architects dismiss such fears. They acknowledge there could be \u201cmarket fluctuations,\u201d during which forest payments would be the first to lose out. But catch-up payments could be made later. \u201cOver the long run, the risk is minimal,\u201d according to Jo\u00e3o Paulo de Resende, a senior official at Brazil\u2019s Ministry of Finance.<\/p>\n But even if the funding model proves financially sustainable, some critics argue that it is exploiting an unethical financial system to the detriment of developing countries. \u201cIt is developing countries\u2019 onerous debt servicing that is paying for this scheme,\u201d says Chien Yen Goh, a legal advisor to the Malaysia-based nonprofit Third World Network.\u00a0 They are being required to \u201cunderwrite forest protection that benefits the entire planet.\u201d\u00a0<\/p>\n So far only Brazil has committed funds: President Lula da Silva pledged $1 billion at the U.N. General Assembly in September.<\/p>\n Whatever its potential drawbacks, backers say the TFFF could transform the finance available for protecting the world\u2019s tropical rainforests. So, will it get the funding that the Brazilians are asking for?\u00a0<\/p>\n The first requirement is for national governments to put up the $25 billion that will kick-start the fund and draw in private investors to provide the remaining $100 billion. Potential sponsors who have publicly backed the initiative include China, the United Arab Emirates, Germany, Norway, France, and the U.K., though not the U.S. But so far only Brazil has committed funds: Lula pledged $1 billion at the U.N. General Assembly in September. And in the run-up to\u00a0Bel\u00e9m, there have been reports of other potential sponsoring governments shying away from cash commitments.\u00a0<\/p>\n Paying the people: Liberia\u2019s novel plan to save its forests. Read more.<\/p>\n Britain, for instance, has worked closely with Brazil in devising the TFFF. Speaking at the London Climate Week, British climate change secretary Ed Miliband called it \u201cbold, inspiring and incredibly promising.\u201d\u00a0 But officials spoken to for this article say that, with budgets tight, there is little chance of British funding being announced in Bel\u00e9m.<\/p>\n That said, the World Bank taking the reins will encourage wavering governments that the project is viable.\u00a0 Whether it is a boon for tropical forests or another false dawn may take longer to establish.<\/p>\n","protected":false},"excerpt":{"rendered":" Brazil is set to unveil an ambitious international plan that would provide up to $4 billion a year to countries that protect their tropical forests. Proponents see it as a potential game-changer for forest conservation, but some ecologists and economists are raising concerns. It could be the last and best chance to save the world\u2019s<\/p>\n","protected":false},"author":1,"featured_media":31511,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[50],"tags":[2521,3391,16029,1436,18340,1119],"class_list":{"0":"post-31510","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-environment","8":"tag-carbon","9":"tag-failing","10":"tag-offsets","11":"tag-plan","12":"tag-rainforests","13":"tag-save"},"_links":{"self":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts\/31510","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=31510"}],"version-history":[{"count":0,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts\/31510\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/media\/31511"}],"wp:attachment":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=31510"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=31510"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=31510"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
\n Lynsey Addario \/ Getty Images<\/span><\/p>\n
\n Daniel Beltr\u00e1 \/ Greenpeace<\/span><\/p>\n
\n NASA<\/span><\/p>\n
\n Jurnasyanto Sukarno \/ Greenpeace<\/span><\/p>\n