BELEM, Brazil (AP) — Brazil on Thursday released long-awaited details of a plan to pay countries save your rainforests and announced that it had already raised $5.5 billion in collateral.
The fund is the flagship project of President Luiz Inacio Lula da Silva as he welcomes world leaders to the edge of the Amazon. UN Annual Climate Summit – an attempt to attract attention and money to endangered tropical forest is critical to curbing global warming.
Funded by interest-bearing debt rather than donations, the fund, called the Tropical Forests Forever Facility, seeks to turn the economic logic of deforestation on its head, making it more profitable for governments to preserve their trees rather than cut them down.
Although the destruction of rainforests is profitable for cattle ranchers, miners And illegal loggersBrazil hopes to convince countries that preserving forests offers big benefits for the world by absorbing huge amounts of planet-warming emissions.
As senior Brazilian officials walked reporters through the inner workings of the fund, Norway pledged $3 billion (the biggest commitment of the day), raising hopes that Lula's ambitions will become a reality.
Through investments in fixed-rate assets, the fund aims to issue $25 billion in debt over the first few years before turning it into a $125 billion bank that can pay developing countries to protect their rainforests.
A list of more than 70 heavily forested countries – from Congo to Colombia – will be eligible for payments if they keep deforestation below target levels. Countries that fail to protect their forests will see their payments reduced at a penalty rate for each hectare destroyed.
“I was already very excited about this, but now I’m even more excited,” Brazilian Finance Minister Fernando Haddad said at a news conference.
But the fine print in Norway's announcement – conditional on Brazil collecting about $9.8 billion in other contributions – has increased pressure on Brazil to live up to its commitments. Other pledges include $1 billion from Indonesia and $500 million from France, as well as $5 million from the Netherlands and $1 million from Portugal to cover installation costs.
Brazil previously announced the creation of a $1 billion fund. Officials said they expected to hear about Germany's contribution on Friday.
But it remained unclear how many other countries would follow suit. British Prime Minister Keir Starmer expressed support for the initiative on Thursday but declined to announce any commitments.
Brazil is also counting on private sector participation once the fund reaches $10 billion, which is considered enough to begin preparations for the bond issue.
Asked about possible concerns on Thursday, Norway's climate minister Andreas Bjelland Eriksen said he believed the risks to the fund were “manageable.”
“There may be an even greater risk of non-participation,” he said. “The rainforests are disappearing before our eyes.”
The fund's rules stipulate that 20% of the money will be directed to Indigenous peoples.
“These initiatives demonstrate a major and welcome shift in recognizing the central role that indigenous peoples, people of African descent and local communities play in protecting the forests that support us,” said Wanjira Mathai, managing director for Africa and global partnerships at the research organization World Resources Institute.
“These commitments can be transformative, but only if governments translate these words into action.”
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