Opinion Editorial – Originally Published in Mongabay
June 13th, 2025 – Tropical forests help regulate the global climate, host irreplaceable biodiversity and provide fresh water resources. Plus forests in general are the source of livelihoods for more than a billion people — so our very existence depends on them. However, because their value is not reflected in markets, these areas are often converted to other uses.
Conserving our tropical forests requires large-scale and predictable finance. A menu of financing options to conserve tropical forests and reverse ongoing deforestation could include high-integrity carbon markets, private investment in nature-based solutions, promoting sustainable products from forests, and incorporating the value of forests in funding decisions by commercial and multilateral development banks. And the timing for that is now — the road to the 2025 United Nations Climate Change Conference (COP30) in Belém, Brazil, provides a unique window to summon public, private and philanthropic actors to mobilize large-scale finance to pay for the true value of forests and ensure their vital existence.
A proposal on the table — launched by Brazil during COP28 and supported by several tropical and potential investor countries, experts, civil society organizations, and Indigenous and local community organizations — can provide substantial resources to conserve standing forests at an unprecedented scale that’s independent of short-term political cycles.
The Tropical Forest Forever Facility
Most forest conservation funding comes from national budgets to finance activities such as forest protection, fire prevention, promotion of bioeconomy projects and payments for ecosystems services. Constrained fiscal space in developing countries prevents significant increases in budgets allocated to these activities, including through new debt. Grants from global funds have played a key role in funding critical forest conservation activities and testing new forest conservation models, and they still play a major role in funding regular forest conservation operations, particularly in least developed countries. However, their volume is limited, funds are unpredictable and often finance fragmented projects. Carbon markets for forests hold promise to mobilize large-scale funding, but so far have faced significant challenges to achieve scale.
To complement these funding sources, the government of Brazil has proposed the Tropical Forest Forever Facility (TFFF), which will pay a fixed price per hectare of tropical forest conserved or restored. The TFFF will provide tropical forest countries with large-scale, predictable, performance-based payments, providing positive incentives aligned with national fiscal planning.
TFFF’s funding model blends public investment and private market borrowing. Around 20% of funds are expected to come from high-income, sovereign investors in the form of long-term loans or guarantees. These contributions will be repaid over 40 years at market rates, and the remaining 80% or less will be raised through the issuance of highly rated bonds to institutional and retail market investors. The amount raised will be invested into a diversified portfolio of liquid, public-market bonds, primarily from countries eligible for Official Development Assistance (ODA). This model insulates conservation finance from short-term political cycles, enabling countries to plan across decades, rather than electoral terms.
The TFFF sets itself apart from traditional models by fostering strong partnerships with Indigenous and local communities (IPLCs) directly involved in tropical forest conservation. Acknowledging the central role these communities play, the TFFF establishes a partnership with the Global Alliance of Territorial Communities (GATC) and was invited by the alliance to participate in its congress in Brazzaville, Republic of Congo, last month. This event brought together more than 300 representatives of IPLCs from 24 countries, along with a range of other stakeholders, and the design of the TFFF’s funding for IPLCs was discussed. In addition, the TFFF Secretariat has just concluded a public online consultation, gathering a wide array of inputs that are now being carefully reviewed.
Funding at scale
The TFFF represents a transformative opportunity to dramatically scale up funding for tropical forest countries. Under its rules, each hectare of tropical forest standing is annually rewarded with $4. However, payments are reduced by a factor of 100 or 200 for each deforested hectare and by a factor of 35 for each hectare degraded by fire. Overall, the TFFF could unlock up to $4 billion annually for tropical forests — nearly four times the value of the global forestry and land use voluntary carbon market in 2023<.
The TFFF could benefit more than 70 tropical forest countries, and these payments would increase several-fold these countries’ budgets for forest conservation. To illustrate this, let’s take the 2023 results (forest cover deducted of deforestation and degradation penalties) for the world’s first- and second-largest tropical forest countries: Brazil and the Democratic Republic of Congo. In 2024, Brazil would have been eligible to receive approximately $850 million from the TFFF, an amount that represents three times the country’s annual discretionary budget for the Ministry of Environment and Climate Change, and more than 50 times the current value of voluntary carbon markets for forestry and land use in the country. The Democratic Republic of Congo, in turn, would have earned more than $350 million in 2024, nearly four times the annual budget of its Ministry of the Environment and Sustainable Development and 350 times the country’s estimated voluntary carbon market.
There is a window of opportunity now to make the TFFF a reality in the lead up to COP30, to be held in November in Brazil. But realizing its full potential will require a mutirão, an active alliance of supporters, from investor countries and private financiers to tropical forest nations, civil society organizations, and Indigenous peoples.
The time to act boldly for our forests is now. The TFFF is not only possible — it is essential. We are calling on the world to join us.
André Aquino is head of the Special Advisory on Economy and Environment at Brazil’s Ministry of Environment and Climate Change, and João Rezende is deputy secretary of Economic and Fiscal Affairs at Brazil’s Ministry of Finance.
This op-ed appeared originally in Mongabay.
