The Clock is Ticking for TFFF: Will COP31 Deliver Where COP30 Failed?

The re-election of Lula da Silva in Brazil's presidential race is a huge victory for progressive politics in Latin America, narrowly avoiding descent once more into the chaos of the far-right Bolsonaro dynasty. Lula’s decisive win is also a victory against U.S. interventionism, and the Trump Administration’s efforts to impose its political, neocolonial and military dominance across the region. 

However, one consequence of the result is that a lifeline has been thrown to the Tropical Forest Forever Facility (TFFF), a new and highly controversial forest finance scheme championed by the Brazilian government. A Bolsonaro victory would undoubtedly have been the final nail in the coffin for TFFF, a silver lining to an otherwise very big, dark cloud. 

The TFFF is still on life support though—it has until the end of the year to secure USD 10 billion in initial funding, which it has so far failed to do, or face key investors such as the Norwegian government pulling out, regardless of whether Lula or Bolsonaro sit in the presidential chair. 
This makes COP31 make or break for TFFF. Although not on the formal agenda of the UN climate negotiations, the scheme's backers will be desperately seeking additional pledges in the corridors of the Antalya conference centre. 

What Went Wrong in Belém?

Alongside the failure of COP30 in Belém, Brazil, to establish a binding roadmap to end deforestation, the TFFF also fell short of its promise to secure the “future of tropical forests”. Brazil’s flagship financing scheme had attracted only USD 6.7 billion in sponsor capital, well below the USD 25 billion initially required to operate at a full scale. 

What it did attract was widespread opposition from civil society and Indigenous Peoples’ organisations. Messaging against TFFF featured prominently in demonstrations in Belém, and a statement rejecting TFFF and defending forest rights was signed by 205 organisations, many of which were participating in counter-mobilisations.1 

The plan had been to use the USD 25 billion in sponsor capital to issue up to USD 100 billion of “senior market debt” (low interest rate, high repayment priority loans and bonds), at a one to four leverage, to build a total investment fund of USD 125 billion. 

This sum would then be invested by the fund at a higher rate of return in order to generate an anticipated revenue of USD four billion per year, which would be paid to tropical forest countries in exchange for conserving one billion hectares of standing tropical forests. 

In Belém, sponsor capital pledges from the Global North included Norway’s USD 3 billion, Germany’s €1 billion (USD 1.15 billion), and France’s €500 million (USD 577 million), totalling USD 4.7 billion, all with specific conditions and strings attached. 

So far, more than a quarter of TFFF funds come from countries that are supposed to be its main beneficiaries

Brazil and Indonesia, which are two of the three largest tropical forest countries, committed USD one billion each in sponsor capital. That means that so far, more than a quarter of TFFF funds come from countries that are supposed to be its main beneficiaries. 

In addition to these five countries, very small pledges from the Netherlands (USD 5 million), Portugal (USD 1 million), and the Minderoo Foundation (USD 10 million) brought the total to USD 6.7 billion, although this sum isn’t available immediately due to several of the conditions imposed.2

Since then, other pledges have trickled in, such as the UK's £400 million (approximately USD 534 million), and another USD 500 million from the Netherlands post-election, taking the total to USD 7.8 billion. At the same time though, Europe's steady march to the right and cooling of climate commitments has put some pledges in doubt. A member of the German Chancellor’s CDU budget committee has argued that Germany’s €1bn investment is hard to justify and should be removed from the 2027 national budget. 

A “once-in-a-generation initiative (…) via an innovative financing mechanism” was promised, but what is the financial logic behind the TFFF and will it tackle the underlying drivers of deforestation? Let’s start at the beginning.

Whose Proposal Is It?

The Brazilian government claims that the TFFF is led by Global South tropical forest countries. In reality, it is a proposal written by bankers for bankers, and was conceived of in the Global North under the leadership of the World Bank.

One of its earliest iterations was a set of four papers published in 2018 by the Center for Global Development (CGD) under the title “Creating a Multilateral Wealth Fund for a Global Public Good: A Proposal for a Tropical Forest Finance Facility”. Among the authors is Kenneth Lay, former vice president and treasurer of the World Bank from 2006 to 2010. Other Global North contributors are cited, as well as officials from the International Monetary Fund (IMF) and the World Bank. 

However, there is no mention of Brazil, Indonesia or the Democratic Republic of the Congo in this initial documentation, and the participation of these tropical forest countries and the subsequent leadership of the Brazilian government have come later, giving legitimacy to the scheme.

A Neo-Colonial Economic Model Underlies the TFFF

According to the 2018 version of the scheme, 

“TFFF is a proposal to mobilise significant low-cost resources which can be invested in private markets to generate a financial return for rewarding successful actions that contribute to achieving a global goal, reduced deforestation. (…) Utilising primarily public funds to generate investment profits from the private sector that in turn provide international finance for public goods could serve to move beyond the finite borders of overseas development aid.” 

From its inception, the intention was clear: the TFFF was designed to use limited public funds to leverage much larger private investments in order to generate profit for wealthy investors and claim to contribute to “halting deforestation”. A convenient formula for limiting public contributions and maximising private returns, while claiming deforestation benefits in the Global South.

This original 2018 financial logic has been revived in the three concept notes subsequently presented by the Brazilian government3, which hinge on: 1) converting money borrowed from wealthy investor countries and companies into profit that can be used to “drive change in developing countries”; and 2) distributing these funds using a results-based aid approach once pre-agreed measurable outcomes are achieved. 

In essence, it reproduces a neo-colonial and technocratic dynamic.

In essence, it reproduces a neo-colonial and technocratic dynamic that privileges “measurable outcomes” over lived realities, reducing complex social, cultural, and ecological factors to narrow metrics. What is easy to measure tends to be prioritised over what matters most, sidelining gender justice, Indigenous governance systems, collective rights, structural drivers of inequality and other forms of environmental harm beyond deforestation. 

TFFF is presented as a “country-led” approach, but reinforces a paternalistic mindset in which donors and Global North actors “drive change” in the Global South, rather than addressing historical responsibility for climate breakdown, ecological harm, colonial crimes, and debt injustices. 

The TFFF is seen by its proponents as a unique opportunity to kill two birds with one stone, allowing private investors to make money and secure corporate greenwashing by reporting their alleged “contributions” to ‘Net Zero commitments’ and ‘nature positive finance’, such as the Taskforce on Nature-related Financial Disclosures (TNFD)4. All of which have been denounced by civil society as controversial schemes to perpetuate corporate abuses, human rights violations and environmental crimes. 

Who is Really Funding the Fund? 

One of the most concerning aspects of the scheme is its heavy reliance on bond markets for Global South debt. In essence, the money used to “protect” tropical forests will be largely paid for by countries in the Global South, through debt servicing and payments to wealthy international investors. As the Third World Network has warned, the real financing will come from “developing countries themselves, disguised by the international capital markets as ‘natural’ return on investments”.

This reflects a perverse money-machine logic: the TFFF will borrow billions of dollars from sponsors and wealthy investors at a lower interest rate, and then invest those resources heavily in emerging market bonds, issued, for example, by highly indebted Global South countries or companies driving deforestation that need immediate liquidity, at a higher rate of return. These emerging market bonds are issued at higher interest rates as they are judged to involve higher risk for the lender (in this case, the TFFF), as it is assumed, for example, that Global South borrowers are more likely to default.

The TFIF will make its money through deepening the debt crisis and insolvency in the Global South.

The profit generated through this difference in interest rates (and often unjust assessment of risk) will then be used primarily to repay lenders, cover World Bank fees, and service interest on sponsor capital. Only if there are profits left over following these transactions would any funds actually be transferred to tropical forest countries. Therefore, the TFIF will make its money through deepening the debt crisis and insolvency in the Global South, at a time when debt levels are already unprecedented. 

Merel van der Mark, Forests and Finance Coalition Coordinator and an expert on financial mechanisms, has made the link between a failure of the Global North to pay what is owed when it comes to climate and biodiversity finance, and the shift towards private finance to make up the shortfall. 

In an interview given for this article, she explains how 

“for years and years, tropical forest countries have asked for support from richer countries, for the protection of their forests. But rich countries have failed to mobilise the amounts that are needed to achieve real forest protection.” 

“So the TFFF seems to me a sad acknowledgement that rich countries are not doing their part, and that the only way to mobilise them to allocate money to forest protection is if they get their money back, with interest. So in that sense, I think that TFFF does not mobilise finance in an equitable way.” 

Deforestation as a Market Failure

The TFFF’s rationale is that by valuing standing tropical forests, the fund will address a “market failure” by assigning a value to, and paying for, the “ecosystem services” provided by tropical forests, thereby incentivising their protection over their destruction or degradation. The financialisation of nature is therefore the proposal’s driving force, where forests are turned into a market value that can generate returns, prioritising capital accumulation above human rights, ecosystem integrity, and all other considerations. 

This poses a profound contradiction: the dominant economic system that turns nature into a financial asset is destroying the cultures, practices, rights and relationships to territories of Indigenous Peoples, local communities, women, and youth—the commodification of nature is therefore not compatible with respecting the interdependent complexities that make up an ecosystem.5 

The structural drivers of deforestation are precisely the same commodity supply chains and industrial processes that fuel the current economic system.

Aligning an economic and financial system designed to extract wealth from nature and forest-dependent peoples with the protection of tropical forests is a paradox in itself. The structural drivers of deforestation are precisely the same commodity supply chains and industrial processes that fuel the current economic system: agribusiness, intensive livestock farming, mining, fossil fuel extraction, infrastructure development, logging for pulp and paper and biomass energy, among other economic sectors. 

The same financial system that will sustain the TFFF generates vast profits from companies driving deforestation. It's like deliberately fighting a losing battle, just to ensure profits for wealthy investors. 

The Propaganda Trap: IPLC “Advice” Is Not the Same as Decision-Making Power

A key pillar of the TFFF is that tropical forest countries will allocate a minimum of 20% of payments they receive to supporting Indigenous Peoples and Local Communities (IPLCs). This means that if a tropical forest country receives USD four per hectare of standing forest, 80 cents would have to be allocated to IPLCs. 

Subsequently, the most recent TFFF proposal (Concept Note 3.1) developed “Guiding Principles for the Allocation to Indigenous Peoples and Local Communities”, and established a “Technical and Scientific Advisory Panel” and an “IPLCs Advisory Council”. Primarily composed of 10 IPLC representatives, the IPLCs Advisory Council will only advise the TFFF Board, and will have no access to decision-making over mobilising and managing the fund’s overall resources. Moreover, the members of the IPLCs Advisory Council will need to be approved by the TFFF Board. 

The really important decisions will be taken by the Board of the Tropical Forest Investment Fund (TFIF), which is the “financial heart” of the fund and responsible for managing the capital (discussed in more detail below). As the World Rainforest Movement (WRM) points out in its analysis of the scheme, it is a mechanism steeped in colonial rationale. Giving IPLCs an advisory role and the power to decide how a fraction of the leftover resources are spent is not the same as giving them full access to decision-making and participation in the fund’s governance structure. 

Chief Ninawa Huni Kui, an Indigenous leader from the Brazilian Amazon and president of the Federation of the Huni Kui Indigenous People in Acre, Brazil, is highly skeptical of the scheme. In an interview given for this article, he said:

“I don’t believe we will have positive results with those actions. The Tropical Forest Forever Facility is just another propaganda trap that will generate huge profits [for wealthy investors]. From a critical perspective, it is a form of co-optation: involving Indigenous Peoples without letting them make the decisions. It's another deception. The fund's decisions will not respond to the real desires and needs of all peoples. This ends up weakening the Indigenous movement, rather than strengthening it”.

In addition to concerns about decision-making, the Huni Kui leader also sees the TFFF’s speculative nature as a contradiction to the cosmovision of Indigenous Peoples. “A capitalist fund is very contrary to the spiritual worldviews of Indigenous Peoples, to the relationship between bem viver6 and territories. Financial resources cannot be confused with bem viver. ‘I'll give them some money and they'll have a better relationship with nature.’ It’s not about that. We're talking about a deeper notion; it’s about reverence and recognition of nature,” he said. 

On top of this, the fund’s stated commitment to equity, rights and inclusion—expressed through the introduction of “funding access modalities” for IPLCs and tropical forest countries—is not guaranteed in the event of market stress, liquidity pressure, drawdowns or default. Even if the financial architecture of the fund remains intact, tropical forest countries, and therefore IPLCs, may receive no payments, as priority would be given to repaying investors. 

TFIF: the Real Decision-Making Player 

The governance structure of the TFFF involves two independent entities: the Tropical Forest Investment Fund (TFIF) and the Tropical Forest Forever Facility (“the Facility” or TFFF).

The TFIF will be responsible for mobilising and managing financial resources, and will take important decisions through the TFIF Board, a central institution in the scheme. The TFIF will have its own governance structure and the freedom to make “market-driven decisions”, which will inevitably mean prioritising economic interests over rights. The TFFF will be limited to "oversee[ing] the forest cover rewards system, including eligibility criteria, monitoring methodologies, and disbursement rules”.

The TFFF Board will include eighteen member countries: nine sponsor countries and nine non-sponsor tropical forest countries that meet the criteria set out in the Facility Charter, the fund’s institutional governance framework, which will guide implementation arrangements, eligibility criteria, and other foundational considerations. All sponsor countries contributing at least USD one billion to the TFFF will be granted a seat on the TFFF Board, until the total number reaches nine. 

The Technical and Scientific Advisory Panel and the IPLCs Advisory Council will function under the supervision of the TFFF Board, which limits their decision-making power in key areas such as conflict resolution, enforcement action, defining indicators, and setting baselines. This contradicts principles of Free, Prior and Informed Consent (FPIC) and weakens democratic control.

On the other hand, the TFIF Board will consist of “professionals” with the required “expertise”, and will be nominated and appointed by the “Sovereign Sponsors” (national governments providing sponsor capital) from an “independent committee’s recommendation”.

The Role of the World Bank 

The World Bank will be the scheme’s trustee and host the TFFF Secretariat, and may also “provide certain Treasury Management services to TFIF”. Its reputation has been discredited in the Global South as it has been widely recognised for sinking countries in debt, imposing unjust conditions on loans, shaping economies to benefit big corporations instead of people, and even backing military dictatorships. 

The TFFF will therefore be hosted by and benefit an organisation responsible for promoting policies that exacerbate inequalities and ecological impacts in the Global South7, which could prove even more problematic in times of global crisis and financial instability. 

The payment hierarchy that the World Bank will oversee will be determined according to the revenues of the TFIF, and will be prioritised in the following way: 

1. Bond-holders, including “debt service and fees payments” to those who lent their money to the TFFF and World Bank fees;
2. Other Private investors; 
3. Sovereign sponsors, which are mainly state loans; 
4. In last place, eligible tropical forest countries that have a deforestation rate lower than 0,5 percent. 

If revenues decline, payments to tropical forest countries will be the first to be postponed, and if things get even worse, the TFIF will “commence an orderly liquidation”.

This payment hierarchy matters: in years when returns are low, forest-based payments would be reduced before investor returns are affected. In extreme market downturns, forest-related payments might pause altogether. Next in line would be reductions in payments to sovereign sponsors, further protecting the interests of private investors. 

Payments to IPLCs will therefore be the lowest priority, while the interests of sponsors and wealthy private investors will be protected through the fund’s investment strategy. Trying to align profit-making with environmental outcomes in this way could therefore put more pressure on forest-dependent communities, as it is ultimately they that will bear the greatest risk burden from market volatility, potential liquidation, and penalties. 

Will the TFFF Incentivise Investments that Harm Forests?

Although the TFFF’s concept note 3.1 states that investments in deforestation, coal, peat, oil, and gas will be excluded, the fund’s unclear investment exclusion criteria are a serious concern. Questions remain unanswered about whether and how the criteria would effectively prohibit investments in sectors that cause deforestation, and ensure that companies that are linked to harmful biodiversity impacts would not benefit from the scheme. 

Van der Mark points out that there are many more industrial sectors that have “impacts on biodiversity, like the use of agrotoxics and intensive water use, that are for now not excluded. And here lies a tension, because if the exclusion criteria are too strict, they will exclude too many activities and the fund won’t be able to generate the returns it needs to make the payments to forest countries.” 

Generating profits from speculative financial markets while relying on exclusion criteria to avoid investing in biodiversity-destroying activities reveals a fundamental contradiction at the fund’s core. What’s the point in creating a scheme that could lead to social and environmental harms if safeguards are not developed and strictly enforced? 

The TFFF also claims that it will have strict criteria to ensure that payments to tropical forest countries will be reduced significantly if their deforestation rates increase. However, as van der Mark explains, there is a risk of leakage to other biomes if TFFF-related payments mean that commodity production just expands into areas not covered by the scheme. 

Furthermore, “there is also the risk that intensification of production on already converted areas, through the use of more fertilisers and pesticides, will harm nature in other ways than through deforestation.” The TFFF’s criteria are not able to mitigate either of these risks. 

The TFFF may become another tool to instrumentalise finance for destruction

Civil society organisations have long warned about the urgent need to halt destructive finance that is directed towards activities that harm forests and biodiversity. Ironically, by its design, the TFFF may become another tool to instrumentalise finance for destruction, displace forest loss into other biomes within eligible tropical forest countries, and detract from efforts to fundamentally change how international finance flows. 

The current climate and biodiversity finance architecture—designed to support the goals of the Convention on Biological Diversity (CBD) and the United Nations Framework Convention on Climate Change (UNFCCC)—is subservient to the extractive economic model. The barriers to accessing funding by Global South countries, such as power asymmetries, debt injustices and challenges in resource mobilisation are not going to be overcome with debt-driven conservation schemes like the TFFF. 

“As much as it's important to mobilise finance for nature protection, as TFFF is trying to do, it is even far more important to regulate harmful finance. If destructive finance is not halted, it's like mopping the floor with the tap still open,” 

explains van der Mark. 

“To really halt destructive finance, we must address the core problem: our economic system built on extractivism and a structural dependence on perpetual growth. This growth imperative drives ecological overshoot, social inequity, and financial practices that externalise harm while privatising gains. We need to shift to an economic system that operates within planetary boundaries, that restores ecosystems, and prioritises sufficiency over accumulation.”

Real Solutions: Addressing the Root Causes of Deforestation and Biodiversity Loss

Market-based approaches to climate change and biodiversity loss are constantly embroiled in scandals and facing serious questions over integrity.8 Concerns over human rights violations and poor performance records demand alternative approaches rooted in human rights, traditional knowledge, and gender justice.

An effective funding mechanism must aim to address the root causes of deforestation, climate change and biodiversity loss, as well as transform dominant economic and financial structures to prioritise nature and social equity over private interests. While common but differentiated responsibilities among countries are a crucial foundation to build strong finance architecture around, the TFFF design has major flaws and won’t be able to mobilise resources in a sustained, gender-responsive, equitable and predictable manner for tropical forest countries. Instead, the TFFF is a speculative financial mechanism that will feed off Global South debt and gamble on volatile financial markets amid geopolitical instability. 

The much-lauded 20 percent direct access to funds for IPLCs is a trap designed to buy support from Indigenous groups: having a say over the leftovers is not the same as having full governance power over the fund. Indigenous Peoples, local communities, women and youth must have full access to decision-making in the entire governance structure of any fund that truly wants to be effective. 

An effective fund must ensure continuous capacity-building, legal protection, and strong regulations to protect land rights, alongside a robust grievance mechanism. It must also actively support efforts to dismantle the financial incentives that drive deforestation, while strengthening legal systems to address the high levels of risk faced by environmental defenders when protecting their territories.9 

An effective fund must ensure continuous capacity-building, legal protection, and strong regulations to protect land rights

Moreover, institutional arrangements and policy decisions that genuinely aim to enable transformative change must address underlying structural constraints, including:

Debt restructuring and cancellation10, and tax justice: priority must be given to relieving the fiscal pressures on Global South countries to expand commodity production and dependence on destructive activities. Public sources of funding must be increased to fund social and environmental priorities, rather than perpetuating the debt crisis. In this context, taxing the super-rich and extractive sectors is an urgent conversation to design an efficient fund capable of addressing the root causes of deforestation and biodiversity loss.

Recognition of ecological debt: Global North countries are historically responsible for the majority of biodiversity destruction and ecological degradation, but they continue to evade their responsibilities. Only two countries have contributed their share of USD 20 billion per year agreed under the Kunming–Montreal Global Biodiversity Framework (KMGBF)11. An effective fund must ensure not only human rights-based and gender-responsive approaches, but also recognise the colonial legacies of nature depletion and its implications for societies, economies, traditional cultures, and ecosystems. 

Increasing public finance for biodiversity and climate action while lessening the fiscal pressures that push Global South countries toward biodiversity-harming activities is essential to achieving meaningful and lasting outcomes. 

In Conclusion: The Ecological Collapse Caused by Capitalism will not be Solved with More Capitalism

Genuine efforts to curb deforestation demand moving away from market-based approaches that perpetuate wealth accumulation and greenwashing, and instead support inclusive decision-making while confronting the structural drivers of forest loss. The TFFF cannot meaningfully challenge agribusiness, extractive industries, illegal logging, false solutions, and perverse incentives that sustain destructive activities. 

Forest protection requires robust, rights-based public financing mechanisms.

At its core, the TFFF is a leveraged bet on risky emerging market debt12 that embodies contradictory approaches to forest conservation and diverts attention from the urgent need to halt the expansion of extractive sectors. It also obscures the role of state policies—often shaped by pressures from the international financial system—that render extractivism a perceived necessity for maintaining financial stability. 

Forest protection requires robust, rights-based public financing mechanisms that place ecosystem integrity and the rights of Indigenous Peoples and local communities at the center, rather than market-driven schemes that demand regulation, investment screening, and social and environmental safeguards. 

Real solutions are already being built on the ground, and we must work towards ensuring that the right financial resources, as well as political, social and economic conditions, are in place to allow them to flourish. These alternatives need to be strengthened, policies must be coherent, and key conditions such as land rights must be guaranteed. 

Recognising that forests and biodiversity cannot be treated as commodities or financial assets is essential. Fundamentally, the ecological collapse caused by capitalism will not be solved with more capitalism.