The Tropical Forests Forever Facility: “The worst conservation fund ever?”
Another false solution for tropical forests.
In October 2024, the New York Times reported on a new fund called the Tropical Forests Forever Facility. “What if financial markets treated trees like shareholders?” Times journalist Manuela Andreoni writes. With that completely nonsensical introduction, Andreoni launches into her puff piece about the Tropical Forests Forever Facility.
Brazil introduced the idea at COP28 in Dubai. By October 2024, it was in its final stages of design and “could ultimately pay out $4 billion a year to protect forests,” Andreoni writes. The aim is to pay for 1 billion hectares of tropical and subtropical moist broadleaf forests.
Brazil will launch the TFFF in November 2025, at COP30 in Belém.
What is the TFFF?
In February 2025, the TFFF published a second concept note, which explains how the fund is supposed to work. There are two parts to the funding:
Rich countries such as the US, Norway, Germany, France, UK, and United Arab Emirates, institutions such as the World Bank, and philanthropic organisations, will loan — not donate — a total of US$25 billion.This is the “sponsor capital” part of the deal. The sponsors’ funding will be repaid (with interest) over a 40-year period.
The remaining 80% of the fund’s capital will come from selling “liquid, highly rated, long-term bonds” with a 10-30-year maturity and a fixed rate of return, to institutional bond market investors and retail investors. This is the “senior debt” part of the deal.
The US$125 billion will go into the Tropical Forest Investment Fund (TFIF). Exactly how this will be managed has not yet been decided, but it will probably be managed by a multilateral development bank, such as the World Bank.
The fund will invest the money in “liquid public market bonds”. The return made in these investments is first used to “service TFIF’s senior debt, then pay interest due on its sponsor capital”. What’s left over will go to results-based payments to Tropical Forest Countries.
The fund hopes to raise US$3.4 billion per year for Tropical Forest Countries — down from the US$4 billion reported by the New York Times in October 2024. It assures us that this will be enough to cover US$4 per hectare of standing forest, because of current rates of deforestation.
While the payment for keeping forest standing is US$4, if deforestation takes place, countries will be penalised at a rate of US$400 per hectare: “for every hectare deforested, 100 times the hectare will be deducted from the payment” the TFFF’s concept note explains.
The worst conservation fund ever?
Frederic Hache at Green Finance Observatory asks whether TFFF might be “The worst conservation fund ever?”
Global South countries only get funding if the investment fund returns more than it has to pay to its providers of “sponsor capital” and “senior debt”. In a briefing about the TFFF, Green Finance Observatory notes that,
“Global South countries are being asked to bet on future interest rates, stock market growth over the next 20 years and on the investment skills of fund managers to possibly get conservation funding; and in exchange for this hypothetical funding, they would agree to be liable for 100 times the amount they may receive, should they lose any biodiversity.
Green Finance Observatory raises three serious problems with TFFF:
The investment is structured in favour of rich countries and investors;
Conservation funding for tropical forests is made conditional on betting on stock market future prices; and
TFFF could be used by rich countries to avoid conservation funding requests from the Global South, and to avoid loss and damage payments.
TFFF’s February 2025 concept note acknowledges that, “As TFIF is an investment fund, its returns cannot be guaranteed.” The concept note also states that, “If payments are insufficient to cover full Forest Payments, per-hectare payments will be reduced. TFCs may receive catch-up payments if TFIF leverage improves.”
In a critique of TFFF for Fundación Solón, Mary Louise Malig and Pablo Solón, write that, “This confirms that payment for standing forests is not a response to their importance but rather a financial game typical of any capitalist bank”.
Who is behind TFFF?
Christopher Egerton-Warburton helped to design the proposed fund. In 2008, he established UK-based Lion’s Head Global Partners, an investment banking firm that focuses on “sustainable development”. Egerton-Warburton told The New York Times that, “We’re at this stage where everybody’s saying, look, in principle, this is crazy. But it’s crazy in a kind of interesting way.”
The TFFF was dreamed up 16 years ago by Kenneth Lay, then-treasurer of the World Bank. Lay has been called the “architect of the modern bond market”.
In 2018, Lay co-wrote an article for the Center for Global Development about the Tropical Forest Finance Facility, as it was then called. “Crucially, the TFFF can provide an incentive to tropical forest countries without encumbering the finances of the countries that sponsor it,” Michele de Nevers, Kenneth Lay, Michael Wolosin, and Patricia Bliss-Guest wrote.
Michele de Nevers is a Visiting Fellow at the Center for Global Development. She spent 19 years working at the World Bank. In 2018, Kenneth Lay worked at Policy Transactions Group LLC, as did Patricia Bliss-Guest. She was previously director of Climate Investment Funds at the World Bank. In 2018, Michael Wolosin was President of Forest Climate Analytics. He previously worked at Climate Analytics and now works at Conservation International.
Another “architect” of the TFFF is Garo Batmanian, director of Brazil’s forestry service. Batmanian led the establishment and subsequently became CEO of WWF Brazil. He was chairman of FSC-Brazil and led the preparation and approval of the national standards for forests and plantations in Brazil.
Industrial tree plantations are excluded from the TFFF1 — but here’s an example of FSC-certified operations in Brazil:
After WWF, Batmanian spent 18 years working at the World Bank.
Batmanain told The New York Times that with TFFF, “What we are asking for is an investment.”
No offsets, but greenwashing is encouraged
TFFF’s concept note specifically excludes carbon offsets: “Investors in TFIF bonds will not be able to count an investment as an offset for any carbon linked scheme”.
However, as Malig and Solón point out, TFFF could be used to greenwash the companies that invest in it.
TFFF’s February 2025 concept note states that investors in the scheme “would be able to attribute the impact of their investments in terms of carbon captured or avoided production of CO₂ as well as biodiversity protected”.
Malig and Solón conclude that,
We cannot reward national governments for hectares of standing forest without demanding that they adopt decisive measures to limit and reverse the irrational expansion of monoculture plantations (soy, oil palm, sugarcane, etc.), curb unsustainable livestock farming, mining, fossil fuel extraction, mega-infrastructure, mass tourism, carbon markets, and animal trafficking. It is a gross delusion to believe that allocating a payment per hectare will solve these structural problems of capitalism, which are driven primarily by private capital and companies, as well as by states.
Under REDD, each country gets to decide its own forest definition. Under TFFF the definition of forests is fixed: “A forest is made up of trees with at least 20% crown cover, and trees that are higher than 5 meters. The area with tree monocultures, or under afforestation would not be considered for the purpose of payments.”
Chris, thank you for unpacking the troubling layers beneath the shiny veneer of the Tropical Forests Forever Facility. Your critique underscores how easily conservation initiatives can drift toward financial engineering rather than genuine ecological care.
It's unsettling, though hardly surprising, how quickly meaningful environmental efforts become speculative games dominated by market interests. You've laid bare a stark contradiction: conservation funding dependent on the very economic systems accelerating deforestation.
The penalties outlined feel less like accountability and more like a cruel trap, leveraging the desperation of countries that can least afford risk, all in the name of protecting forests. A financial gamble shouldn't determine the fate of our world's biodiversity.
Your insight serves as a necessary warning: conservation can’t be sustainably achieved through financial sleight-of-hand. Without confronting the deeper issues fueling ecological harm, we're merely treating symptoms - never causes.
This is the type of conversation needed urgently, and I appreciate your sharp lens on these flawed solutions.
It is a very involved ponzi scheme and what is the security for these loans from the "rich" countries? There are so many possible layers of fraud and corruption, and the possibility to bankrupt the supposedly beneficiary countries. Like in Leonard Cohen's song about the cracks that let the light in, these schemes are set up to be so complex in order to allow cracks that let the money slip out.