In 2024, the world lost almost 6.7 million hectares (16.5 million acres) of primary tropical forest, the fastest rate ever recorded. The world’s forests are still falling prey to mining, logging and agriculture, but as the climate crisis intensifies, for the first time on record, the leading cause of tropical primary forest loss is fire. Burning forests are further supercharging extreme weather by pumping more carbon dioxide into the atmosphere.

Against this bleak backdrop — and with world leaders’ promise to end and reverse deforestation by 2030 well off track — a planned new $125 billion investment fund to pay tropical countries to halt deforestation offers a lifeline for the world’s forests, and the Indigenous and local communities who live in them.

The Tropical Forest Forever Facility (TFFF) was proposed by Brazil at the COP28 climate summit in Dubai in 2023 and aims to keep forests standing by paying nations an initial annual fee of $4 for every hectare of forest they maintain. The money will come from a permanent endowment fund created by a combination of sovereign and philanthropic capital and private investment.

The fund’s launch is expected to be a major focal point of the COP30 climate summit in November, hosted by Brazil in the Amazonian city of Belém. Investors, tropical forest governments and the TFFF secretariat are currently negotiating many of its fine details, which are expected to be released at the end of June.

However, what we know about the fund from details already in the public domain raises several environmental and social concerns. Given the desperately high stakes, we should all want the TFFF to succeed. But unless these issues are addressed, its chances of doing so will be slim.

Inherent risks

A new briefing prepared by more than 40 international environmental, human rights and Indigenous organizations lays out these concerns, and crucially describes how they should be tackled. For a start, there are inherent risks in tying funding for tropical forests to future economic growth, interest rate fluctuations, and the decisions of hedge fund managers. It should also be self-evident that investors in a fund that aims to stop the world’s forests from being destroyed do not contribute to the planet’s devastation in other ways, such as by holding investments in fossil fuels and other industries or companies that fail to respect Indigenous peoples’ rights.

To alleviate some of these risks, the fund must exclude certain industries and investors. It should also adhere to ESG standards applied by the World Bank’s International Finance Corporation’s Environmental and Social Performance Standards. It’s equally important that the fund does not repeat the failures of carbon and biodiversity markets, with TFFF investors using it as a substitute for efforts to curb their own environmental damage.

While the fund rightly respects national sovereignty — allowing beneficiary countries to use revenues from forest preservation (monitored via satellite) at their discretion — there is a clear need for stronger environmental and social safeguards. As currently designed, the uniform 20% forest canopy cover threshold could allow countries to significantly degrade primary tropical forests through logging and other activities, yet still remain eligible for payments.

The TFFF must incentivize the protection and restoration of forests with high ecosystem integrity by requiring tropical forest countries to adopt robust national forest policies and invest in effective forest protection measures. At the same time, it is crucial that the TFFF does not incentivize harmful practices that undermine the rights of forest-dependent communities, such as militarized conservation, land grabs, and criminalization of traditional livelihoods. There must be an explicit commitment to uphold international standards, including the Cancun safeguards and the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP).

An accessible, transparent and responsive grievance and redress mechanism is also needed to hold countries and investors accountable. The TFFF can build on the model used by the Green Climate Fund, which currently represents the most credible international standard.

Forest guardians

Overall, Indigenous and local communities plus civil society groups need to figure more prominently in the TFFF’s governance model, given that they hold or manage more than half of the world’s intact forests, and with studies showing that they’re the best custodians of the world’s forests.

About 20% of the funds are expected to be allocated to Indigenous and local communities. This is a step in the right direction, but for the TFFF’s funding to reach its intended recipients, it must go directly to them, to the largest extent possible, rather than as in the current proposal, with payments being in the hands of national governments. Moreover, funding mechanisms must be co-designed by Indigenous and local communities and civil society organizations, not imposed on them.

In short, Indigenous and local communities must move from the fringes of the TFFF to its heart, if the fund’s achievements are to match its ambition.

Joe Eisen is executive director of Rainforest Foundation UK, where he has worked for 15 years for tropical forest community rights.

Banner image: Emergent rainforest tree in the Ecuadorian Amazon. Photo by Rhett Ayers Butler for Mongabay.

Related audio from Mongabay’s podcast: A discussion of the Tropical Forest Forever Facility’s strengths and weaknesses, listen here:

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