GNV News, December 20, 2024

At the 28th Conference of the Parties (COP28) to the United Nations Framework Convention on Climate Change in 2023, Brazil announced a multilateral investment fund that provides economic incentives to curb and reverse deforestation and degradation in tropical forest countries, the Tropical Forests Forever Facility (TFFF), which is planned to launch at COP30 in 2025. Tropical forests store the carbon dioxide that causes global warming as carbon and also perform various functions such as regulating rainfall patterns and conserving biodiversity. However, due to industries that promote deforestation, the world has lost about 360,000 hectares of tropical forests per year over the past 20 years. This article explains the specific mechanism of the TFFF for reversing the economics that drive deforestation.

The TFFF is a mechanism that distributes profits generated from investments to low-income countries that carry out forest conservation. Primarily, governments or the private sector in high-income countries deposit funds into the TFFF, and the TFFF reinvests this capital in a diversified manner into opportunities expected to yield high returns. The profits generated by these investments are first used to repay the fixed interest owed to the depositing governments or private sector, and the surplus is distributed to low-income countries that protect tropical forests, based on the area of tropical forest and demonstrated results in protection. The area of protected forest is accurately measured using the latest satellite technology; for example, a payment of US$4 per hectare of protected forest is made. At present, the surplus profits after deducting the fixed interest on deposits from investment returns are estimated at about US$4 billion per year, raising expectations for sustained forest conservation.

Learn more about deforestation in the Amazon → “Illegal logging is encroaching on the still-untouched heart of the Amazon: revealed by ‘alarming’ research results”

Learn more about deforestation in Malaysia → “Malaysia: Can deforestation be stopped?”

Amazon rainforest seen from the air, Brazil (Photo: lubasi / Wikimedia Commons [CC BY-SA 2.0])