The Tropical Forest Forever Facility: “A fund for wealthy people and Wall Street”
New report from The Corner House on TFFF.
On 23 September 2025, Brazil’s president, Luiz Inacio Lula da Silva, announced an investment of US$1 billion in the Tropical Forest Forever Facility. Brazil is the first country to commit money to the TFFF.
“Brazil will lead by example,” Lula said. Brazil hopes to be able to announce the start of operations for the TFFF during COP30 in Belém.
A new paper by Larry Lohmann of the UK-based solidarity organisation The Corner House is a devastating critique of the proposal. The paper is titled, “Spoils of a Continuing Colonialism: The Tropical Forest Forever Facility.”1
Lohmann gives six reasons “why the TFFF must not be allowed to get off the ground in Belém”:
The TFFF would be funded with profits derived partly from the destruction of tropical forests.
The money that the TFFF promises to tropical forest governments is small and extremely uncertain compared to the profits that Wall Street could make from the plan. On the whole, the scheme is designed to transfer wealth from South to North.
The TFFF would increase both the South’s financial debt to the North and the North’s ecological debt to the South.
The TFFF is designed in a way that distracts from the underlying causes of deforestation. The bond investment fund at its heart has been designed by Northern bankers who have little experience of tropical forests or their peoples.
The TFFF is based on a false theory of deforestation.
Any money that does reach tropical forest governments under the plan would be very unlikely to be passed on in significant amounts to forest communities themselves. Indeed, the TFFF could end up empowering repressive governments against forest communities.
Where would TFFF’s money come from?
The TFFF aims to raise US$4 billion per year to save tropical forests.
But as Pablo Solón, executive director of Fundacion Solon, points out that money does not come from diverting money from the world’s military budgets, or from the subsidies currently given to oil companies, or by taxing oil.
Instead, the TFFF’s money would come from a gamble on investments in the global South. Lohmann writes that,
At the heart of the TFFF is a fund for wealthy people and Wall Street institutions to invest in to make money. The idea is that after the rich get richer through this fund, there might be a little left over to give to governments of tropical forest countries.
Solón asks, “Why do military expenditures and fossil fuel subsidies receive public funds while forests must rely on stock markets?”
In March 2025, Fundación Solón and the Global Forest Coalition published a critique of the TFFF, written by Mary Louise Malig and Pablo Solón. They call TFFF a false solution for tropical forests.
The Tropical Forest Investment Fund
The fund at the heart of the TFFF is the Tropical Forest Investment Fund. “TFIF investments would almost certainly be in damaging, exploitative, polluting or extractive activities of more or less the ordinary variety” Lohmann writes. “After all, those are the kind of activities that are most likely to return more money to investors than it costs them to borrow.”
The most recent TFFF Concept Note makes clear that decisions about where the money will be invested “will be made exclusively with the aim of optimising risk-adjusted returns and maintaining a strong financial profile for the TFIF”. The TFIF will have “freedom to make decisions that are market-driven” and to “maximise income”.
TFIF investments are likely to be in mining, agribusiness, manufacturing, or infrastructure sectors, involving the processing, trading, or use of steel, cement, aluminium, beef, cocoa, coffee, leather, palm oil, pulp and paper, soy, or rubber. Lohmann notes that in 2024, 150 financial institutions poured US$8.9 trillion into schemes driving deforestation. That’s 2,000 times the US$4 billion that the TFFF hopes to raise.
Northern governments will appoint the board of the TFIF. Tropical forest governments have no say. Neither do TFFF officials. The Brazilian government is negotiating with the World Bank to host the Secretariat, Trustee and main financial manager of the TFFF.
In May 2025, a coalition of more than 40 international environmental, human rights, and Indigenous organisation published a Briefing Note about the TFFF. They argue that TFIF must exclude “investments in fossil fuels and other industries and companies that cause significant harm to biodiversity and human rights”.
Lohmann responds that this “would only make things worse” because it implies that TFIF could survive under such conditions, and that the “problem” has a “solution” inside the TFIF framework.
Lohmann writes that,
That kind of thinking is fatal. It can lead only to the whole scheme persisting and doing even more damage over the years, while deforestation continues to worsen. Even if the TFIF had any incentive to listen to such NGO suggestions (which it doesn’t), it could not possibly interpret them in a way that would contradict the imperative of the global bond market to make profits out of ecological destruction.
Lohmann adds that the TFFF assumes, based on zero evidence, that “the remedy for ecological damage driven by speculative, financialized capitalism must be yet more speculative, financialized capitalism”.
Lohmann illustrates the inequity of the scheme with a diagram of how money will flow through the TFIF and TFFF:
Lohmann sums this up as follows:
Sponsoring governments and their taxpayers absorb financial risk for Wall Street firms; tropical forest governments absorb risk for sponsors; forest communities absorb risk for tropical forest governments.
Leftovers
Any money left once the Wall Street investors and rich government have taken their cut will go to tropical forest governments. But there’s no guarantee of anything being leftover.
Lohmann gives a long list of things that could wipe out the TFIF: “interest and exchange rate shocks, defaults, cyclic economic downturns, reinvestment risk, mark-to-market volatility, unanticipated price slumps or increases, lousy modeling, or just bad investment gambles”.
And then there’s the risk of a financial crash, a liquidity crisis, a global pandemic, more wars, and the ecological and climate crises.
Max Alexander Matthey, a PhD student at the Universität Witten/Herdecke, and Aidan Hollis, professor of economics at the University of Calgary, write that, a “single sovereign default could topple the entire structure,” which could “collapse even before any meaningful payments for forest protection are made”.
Even if any money is leftover, tropical forest governments have to pass the TFIF’s forest monitoring test before receiving anything. “This test is tough,” Lohmann writes. “In fact, it’s so tough that it almost looks as if it were designed to make sure that TFCs [tropical forest countries] flunk much of the time, keeping the promised forest payments out of reach.”
Where would the leftovers go?
Whether the leftovers, if there are indeed any at all, would actually help forests and forest communities is Lohmann’s next question. 80% of the money could be put in “national budgets” according to TFFF’s Concept Note. “If governments wanted, they could use that portion of the money to build prisons for forest defenders,” Lohmann points out.
Even the remaining 20% that is supposed to go “as directly as possible” to Indigenous People and local communities in the form of results-based payments is doubtful.
In a webinar organised by the TFFF in April 2025, Federico de Filippo, of Brazil’s Ministry of Indigenous Peoples, notes that there is no universal definition of “direct financing”. In Brazil, he states that part of the money would be managed by local organisations and networks, with the rest going to financial intermediaries, private sector actors, and government agencies.
These payments raise a series of questions. What about countries that refuse to recognise the existence of Indigenous Peoples, such as Togo or China? What about countries that repress Indigenous communities protecting their territories, such as Kenya, or Thailand, or Tanzania, or Guatemala?
TFFF has produced glossy promotional material but no analysis of the history of payment schemes failing to preserve forests and leading to community conflict.
TFFF relies on the theory that deforestation is a “market failure” and a result of a “funding gap”. But the only evidence it can raise to back any of this in its Concept Note is a non-peer reviewed paper produced for the G20 by the Brazilian presidency in 2024. The paper is not even available on the internet.
As Malig and Solón write in their critique of TFFF,
It is a gross delusion to believe that allocating a payment per hectare will solve these structural problems of capitalism, which are primarily driven by private capital and companies, as well as by States.
Lohmann points out that the TFFF is absolutely not a “paradigm shift”. Rather than paying the ecological debt that the Global North owes the Global South, the TFFF reinforces the mechanisms that imposed that debt and in the process increases the debt.
TFFF was dreamed up in the World Bank
TFFF’s most recent Concept Note includes a quotation from Colombia’s Minister of Environment Lena Estrada, who describes the TFFF an example of “fair financial architecture — built from the South, and for the South”.
Joe Walston, executive vice president of the Wildlife Conservation Society repeats this idea in a TFFF promotional video:
Emanating from Brazil, that not only is a leader in tropical forest conservation, but is from these regions, not led from the North inviting the South to join.
But this is simply not true. TFFF is neither “fair financial architecture” not was it “built from the South”.
The TFFF was originally dreamed up 16 years by a man called Kenneth Lay. At the time he was treasurer of the World Bank. Lay has little or no knowledge about tropical deforestation, or of the communities that live in and around tropical forests. His expertise is making money in the global finance market.
Lay is currently a director at the Rock Creek Group, a Washington DC-based asset management firm.
TFFF’s latest Concept Note reveals that one of the companies that “contributed to technical input” is Bracebridge Capital LLC, a US-based company incorporated in the tax haven of Delaware in 2009.
Lohmann points out that,
Bracebridge – co-founded by wealthy fund manager Nancy Zimmerman – is notorious for being one of a small group of hedge funds which refused a deal that would have allowed Argentina to restructure its debt to Wall Street during the severe depression of the 2000s. Following US court decisions that went against Argentina, Bracebridge scooped up US$1.15 billion in repayments for bonds that it had bought at a huge discount for $120 million – a stunning 952 per cent profit based on the misfortune of Argentina’s people. Then-Argentine president Cristina Fernandez de Kirchner described Bracebridge’s vulture-like behaviour as “financial terrorism.”
The World Bank, which is in line to run significant parts of the TFFF and would dominate the legal structure of the TFFF, would not be audited by anyone. This is despite the World Bank’s terrible 60-year record of forest devastation around the world.
Two scenarios
Lohmann sketches out two scenarios of what might happen after the launch of TFFF at COP30. The first is that the TFFF collapses immediately “due to its multiple inherent absurdities”.
The second is that the TFFF will stagger along for many years, “distracting from the real causes of tropical deforestation while making big profits for a few”. Eventually the financiers from the Global North will quietly forgot about the whole scheme.
Lohmann points out that the first scenario is the better one for tropical forests and their peoples. He makes several suggestions to “help ensure that the plan is shelved as soon as possible”:
NGOs should recognise that they cannot transform a Wall Street financial structure into something that benefits forests. The problem is that it is a Wall Street financial structure. “There is absolutely no prospect that any reforms proposed by NGOs or social movements would be permitted to alter the TFFF’s essentially anti-forest orientation or even to limit its damage significantly,” Lohmann writes.
It is self-defeating for NGOs concerned about tropical forests to endorse TFIF as long as no investment “goes to activities antithetical to forest conservation or that harms forest communities” and that no alliances be made with “governments actively encouraging forest clearance”, as Third World Network proposes. That’s not going to happen, Lohmann points out, because it would undermine the TFIF’s aim to make as much profit as possible.
Neither would TFFF be somehow acceptable if the World Bank stepped aside. “It’s already too late for that,” Lohmann writes. In any case, there is no shortage of other international or national agencies that could take on the job and be just as self-interested, incompetent, and intellectually corrupt as the World Bank.
Lohmann argues that Environmental, Social, and Governance guidelines are not going to help. World Rainforest Movement and others have documented time and time again how certification schemes simply do not work.
The argument that TFFF is “better than REDD”, or “better than carbon markets” is based on a false premise. Sure, TFFF is different to REDD, but it serves the same interests Lohmann notes. It would have similar problems and impacts to REDD. It reinforces the power of the institutions that are destroying the planet.
TFFF uses forests as an excuse for business as usual. It ignores community-based perspectives on economics, ecology, and politics. It assumes a global solution that could be implemented at the flick of a financial switch. But it ignores the endless differences and local realities in tropical forests.
“The conclusion is hard to avoid,” Lohmann writes. “The TFFF’s authors think that social movements are too stupid to notice what is going on. Should that contempt really be repaid with obedience?”
On 7 October 2025, World Rainforest Movement published Lohmann’s report. I’ve updated this post to link to WRM’s version of the report. The report is also available in Spanish, French, and Portuguese.