Critical gaps remain in flagship forest fund

The TFFF was meant to be a milestone in protecting forests, but it’s already in danger of being a damp squib. To fulfil its ambitions, Indigenous and local peoples must be given a central role, writes Tyala Ifwanga. 

The launch of Brazil’s flagship Tropical Forest Forever Facility (TFFF) at the opening leaders’ summit of the COP30 UN Climate Conference on Thursday November 6, should have been a milestone in the long fight to protect the world’s tropical forests. 

The TFFF is a planned US$ 125 billion investment fund which will pay tropical countries to halt deforestation and degradation. It was billed as the centrepiece of this month’s global climate talks: a summit described by Brazil’s President, Luiz Inácio Lula da Silva, as: “the moment we demonstrate the seriousness of our shared commitment to the planet”. 

Launching the fund in Belém, at the mouth of the Amazon, was a stark symbol of the urgent need to address the problem: Brazil is the global leader in primary tropical forest loss, and the Amazon - the world’s largest and most biodiverse rainforest - has been hit by a ‘perfect storm’ of organised crime, climate change and governance failure.  

Yet instead of being a watershed in international efforts to halt deforestation, the TFFF is already threatening to be a damp squib.  

Absent funders 

On the eve of the summit, it was reported that the UK would not contribute to the TFFF, angering the hosts. 

And with only US$ 5.5 billion in seed funding from a handful of sponsor governments, the initiative is falling dramatically short of the $25 billion originally envisioned - money which would be used to leverage an additional $100 billion from private finance.  

The Tropical Forest Investment Fund (TFIF), the financial arm of the TFFF, will now use this starting capital as a cushion to attract private investment. The total fund will then be invested in public and private assets, attempting to generate enough returns to be able to pay eligible tropical forests countries for their conservation efforts at the rate of US$4 per hectare.  

Critical gaps threaten the fund's integrity  

But a funding shortfall is not the only serious gap which could thwart the TFFF’s ambition of conserving tropical forests. 

It should be obvious that a fund aimed at saving the planet should not invest in projects that harm it. Yet the investment exclusion list is alarmingly narrow, limited only to oil, coal, and peat, and with no details of the mechanisms for implementing even these exclusions. 

This must be rectified. Comprehensive criteria that exclude investments that harm forests must be developed in collaboration with Indigenous, grassroots, women and gender-justice organisations. The Finance and Forests coalition has already developed a comprehensive exclusion list that would make the TFFF coherent with its goals.  

Meanwhile, Indigenous Peoples’ and local communities’ meaningful participation remains minimal. 

Indigenous Peoples and local communities hold or manage more than half of the world’s intact forests, and are proven to be outstanding stewards of them. While the TFFF’s commitment to direct funding for Indigenous Peoples and Local Communities is welcome, they - along with civil society organisations - cannot be treated as passive beneficiaries, but must have formal roles in the TFFF and TFIF's governance mechanisms – enabling them to develop programmes eligible for funding at country level. 

Similarly, TFFF member countries must be involved in designing the TFIF Board's purpose and mandate, and that Board must report on environmental performance, not just financial returns.  

The absence of details on the grievance and redress mechanisms is equally troubling. Both the TFFF facility and TFIF need effective public channels for complaints covering everything from fund disbursement, to recipient countries' respect for eligibility criteria, to the portfolio's social and environmental impacts.  

What’s more, under current criteria, the TFFF could reward countries for forests already extensively degraded by human activities. The methodology for evaluating and monitoring forest degradation must be significantly strengthened to address concerns about the low threshold and inaccurate, delayed monitoring of degradation.  

A call for more, not less  

Launching the TFFF, Brazil’s President Lula – whose country has pledged US$ 1 billion to the fund – said it was “an unprecedented initiative” and that “for the first time, Global South countries will have protagonism in the forest agenda”. 

Their commitment, however, should not mask the failure of many leaders from the global North to take responsibility for a climate crisis they bear a disproportionate responsibility for.  

At COP30, they have a chance to begin rectifying this, including by supporting initiatives such as the Indigenous Peoples and Local Communities (ILPC) Pledge 2.0, which will strengthen those groups’ tenure rights and forest guardianship.  

The TFFF doesn’t address the root causes of deforestation -  corruption, power imbalances, and a lack of clarity over land tenure rights, among them. As such, it won’t be the silver bullet which eradicates the problem.  

Yet it could still make a significant difference. 

But to do so, the TFFF’s shortcomings must be addressed, including its scientific methodology, its governance mechanisms and its failure to put Indigenous Peoples and local communities at the heart of its decision-making processes. 

Categories: News, Finance for forests and peoples