'A very significant flow': Finance's number 3 details the forestry fund that will be proposed at COP30

President Lula participated in a meeting of the Amazon Cooperation Treaty Organization (ACTO) in Colombia . There, he stated that developing countries cannot expect wealthier nations to donate money to environmental causes. Therefore, he announced that Brazil will present to COP30 in Belém a proposal to create "a fund to keep forests standing."

This is the Tropical Forests Forever Fund (TFFF), developed by the Ministry of Finance in partnership with eleven other countries. According to the ministry's deputy executive secretary, Rafael Dubeux , the measure could generate between $1 billion and $1.5 billion per year (approximately R$5 billion and R$8 billion). "A very significant flow," he told the program Poder em Pauta , broadcast on CartaCapital 's YouTube channel.

The TFFF is one of two central proposals being prepared by the Ministry of Finance for COP30. The other concerns the creation of a regulated carbon credit market. "The COP's agenda cannot be treated as exclusively climate-related," emphasizes Dubeux. "It's a debate about how to combine economic development and income generation with the emissions limits the planet can tolerate."

How the fund will work

The initial design envisages the TFFF starting with $25 billion, coming from governments and possibly philanthropic entities. Later, the private sector is expected to inject an additional $100 billion through investment and pension funds. "It will be one of the largest multilateral funds ever created," observes Dubeux.

The application will follow an investment logic, not a donation logic. The goal is to generate an annual profit of 7% to 8%, returning part of the return to the initial donors. "The TFFF avoids these donation cycles. Today, we live in difficult times, marked by geopolitical tensions. National budgets are increasingly focused on defense and security, not international cooperation," explains the secretary.

The model differs from the Amazon Fund , which depends on donations and had its resources suspended during the Bolsonaro government, when Germany and Norway cut support due to the escalation of deforestation.

Under the new arrangement, beneficiary countries—such as Colombia, Congo, Indonesia, and Malaysia—will be rewarded for keeping the forest standing, not just for reducing the rate of deforestation. Monitoring will be done via satellite. "It will be a successor to the model based on reducing deforestation," summarizes Dubeux.

Among the likely initial financiers are Germany, France, Norway, and the United Kingdom. The fund will be managed by the World Bank, which, according to Dubeux, "brings enormous credibility to the fund, ensuring that its risk assessment is compatible with investors' interests."

The regulated carbon market

The second axis of Brazil's strategy is the implementation of a regulated carbon market, already provided for in a law approved in 2024. Unlike the voluntary market, criticized for "dubious" business dealings, the regulated market will involve government participation, which sets an emissions cap for each economic sector.

"In practice, instead of treating the atmosphere as an unlimited sewer, we'll establish a limit on how much each company can emit," says Dubeux. As this limit will gradually decrease, companies will have to decarbonize their processes or purchase quotas—which will become more expensive over time.

Similar models have been in operation in the European Union since 2005 and in China since 2021. California, in the US, operates a mature market, despite the country's withdrawal from the Paris Agreement during the Trump and Biden administrations.

At COP30, there's unlikely to be a global consensus on the issue. Therefore, Brazil is betting on a coalition to create a "semi-global" market, open to future accessions but with differentiated conditions. This arrangement tends to benefit countries with lower per capita incomes.