(Nov 12): China won’t contribute to the rainforest conservation fund that Brazil has made its showpiece initiative at the United Nations’ COP30 climate summit, according to three people familiar with the matter.
Known as the Tropical Forest Forever Facility, the new fund has racked up US$5.5 billion in investment pledges so far, including from Norway, France and Indonesia, while Germany has said it will make a “substantial contribution”.
Without additional investors, however, Brazil is likely to fall far short of even a reduced target put forward just before the start of talks. Initial estimates were for a US$25 billion pool that would then be leveraged to create a US$125 billion vehicle. Fernando Haddad, Brazil’s finance minister, said last week he believed the fund could raise US$10 billion by next year.
Chinese officials maintained that developed nations should bear primary responsibility for funding global efforts, two of the people said. Brazil and Indonesia, two developing countries, were the earliest backers of the TFFF.
A text inquiry to China’s delegation attending COP30 wasn’t immediately answered. The country’s environmental and finance ministries could not be reached for comment outside regular business hours. Brazil’s Finance Ministry didn’t immediately respond to requests for comment.
The TFFF is designed to incentivise conservation of global forests, which store large amounts of planet-warming carbon dioxide. It would work by investing contributors’ money in financial assets with a high rate of return. A portion of that would be used to repay investors with interest, while a large sum would be set aside to provide countries with US$4 per hectare of protected tropical forest.
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Brazil doesn’t expect any more nations to commit to investing in the fund during COP30, which runs through Nov 21 in the Amazonian city of Belém, one of the three people said.
Talks with India have stalled, according to the person. Japan and the UK have expressed interest in supporting the fund but are not yet ready to make formal commitments.
Indian and Japanese officials didn’t immediately respond to requests for comment.
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Brazil is also awaiting pledges from the Netherlands and Canada, but these are expected sometime next year, said the person.
No multilateral development banks have committed money to the fund so far. But on Tuesday, the European Investment Bank said it was in discussions with the European Commission on supporting the fund, according to the bank’s Vice President Ambroise Fayolle.
“The basic principle — that you need to find a way to reward countries that don’t destroy the forest to rebuild it — is something that is completely legitimate,” Fayolle said in an interview in Belém.
Separately, the EIB announced Tuesday it would contribute EUR50 million ($75.35 million) to a reforestation fund run by Ardian, a private investment firm.
While the EIB’s discussions are still in early stages, one other Western development bank, with a track record of climate investing, has already declined to participate after being courted by Brazil, according to a person familiar with the matter.
Thirteen German NGOs released an open letter to Chancellor Friedrich Merz on Tuesday pushing him to announce a US$2.5 billion investment in the TFFF. Norway’s US$3 billion investment over 10 years came with a number of conditions, including that others would put in a significant amount of money too.
“We consider it politically crucial that the amount you announced be specified during the climate conference in Belém,” reads the NGOs’ letter. “This would help maintain the momentum of the TFFF, guarantee Germany’s influence in its further design through a seat on the board, ensure that Norway’s funds do not expire, and mobilise additional resources from other countries.”
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There’s also some sign of philanthropies being willing to invest. The Minderoo Foundation, backed by the Australian mining billionaire Andrew Forrest, invested US$10 million.
“The beauty of this is that it’s a large group of capital which is there to preserve forests and it’ll actually work,” he said in an interview. “We get capital back, we get a return, and better, you get to save the rainforests in the world and it’s not an offset.”
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