New $125B Forest Fund Could Backfire, Critics Warn

A groundbreaking $125 billion global fund designed to pay tropical countries for forest protection is facing fierce criticism from environmental and Indigenous groups who say it could actually worsen deforestation and burden developing nations with debt.

The Tropical Forests Forever Facility (TFFF), launched in Brazil ahead of the UN Climate Conference, promises to pay countries up to $4 per hectare annually for keeping their forests intact. With over $5.5 billion already pledged and support from 50+ nations spanning the Amazon, Congo, and Borneo regions, the initiative appears to have significant momentum. The fund requires that at least 20% of payments reach Indigenous and local communities directly.

However, more than 50 Indigenous and civil society organizations are sounding the alarm about the fund’s structure. They argue it unfairly shifts investment risks to developing countries while guaranteeing returns for wealthy investors and financial institutions. The TFFF plans to raise its initial capital from rich nations and private investors, then invest primarily in high-interest bonds from emerging economies.

The controversial payment system prioritizes financial performance over environmental results. Private investors and sponsor countries receive profits first, with forest-protecting nations getting only what remains. Most concerning to critics: if the fund underperforms financially, payments to tropical countries decrease regardless of whether they successfully prevent deforestation. This structure essentially makes taxpayers in developing nations absorb the financial risks while wealthy investors enjoy protected returns, potentially undermining the very conservation goals the fund claims to support.