Can a new fund give tropical forests a future?

Brazil's president Luiz Inácio Lula da Silva announced a $1 billion investment in the Tropical Forest Forever Facility (TFFF) to support forest conservation this week at a United Nations event in New York.

It is the first commitment made to the planned multilateral funding mechanism that Brazil plans to launch at the U.N. Climate Summit, which it is hosting in November in the Amazon city of Belém.

"If tropical forests hit tipping points, the effect of these catastrophes will not be felt just in Belém, Kinshasa or Jakarta," Lula said. "Their degradation would compromise the global climate balance in an irreversible manner."

Brazil's contribution is conditioned other countries joining, according to the TFFF's media office.

The fund aims to compensate countries that leave tropical forests standing and seeks to raise $125 billion - $25 billion from countries and major philanthropies and $100 billion from private-sector contributions.

It would be managed like an endowment, paying countries annual stipends.

Here is what you need to know.

What is the TFFF, and where would the money come from?

In the Amazon and elsewhere, a hectare of forested land is often worth less money than deforested land, where cattle or crops can be more easily introduced.

By better valuing the services that forests provide to natural systems and society - which include cooling the climate, regulating water flow, storing planet-heating carbon and supporting biodiversity - the TFFF would incentivise countries to protect forests.

The fund would seek to raise money through loans from countries, philanthropies, the World Bank, nonprofit organisations, market investors and others, fully repayable within 30 to 40 years.

That money would be invested in assets such as higher-yielding emerging market sovereign bonds, with some of the returns given to investors. Another share would be distributed to 73 countries that collectively hold 1 billion hectares of tropical forests.

Each year, those countries would be paid $4 for each forested hectare. Countries that lose forests would lose money, and those that recover forests would be paid more.

But the planned structure could make disbursements overreliant on high returns from risky investments and a potential default could topple the fund, according to Aidan Hollis, an economics professor at the University of Calgary, and policy analyst Alexander Matthey.

Are there other forest-protection funding schemes?

Other mechanisms include direct donations to funds such as the Global Environment Facility or Brazil's Amazon Fund, as well as bilateral pacts between countries, like Norway and Indonesia.

Other vehicles include carbon-credit initiatives, in which landholders or governments are paid for the carbon captured in forests, and debt-for-nature swaps, in which creditors allow indebted countries to redirect some repayments to conservation.

At the U.N. event, the Congo Republic's environment minister questioned how the TFFF would avoid "overlapping or duplicating" other mechanisms, like the Congo Basin Blue Fund, which finances projects to protect the region's rainforest.

How is the TFFF different, and at what stage is it now?

The TFFF could raise money already available in the market by attracting investors interested in environmentally friendly funds, Brazil's government argues.

The TFFF has received initial signs of support from China, Britain, France, Germany, Singapore and the UAE, people involved in the negotiations told Reuters.

Countries with tropical forests would be provided a stable stream of money, as long as they demonstrate transparent public finance management, that they are able to track deforestation and it is under control. Governments would invest in forest conservation as they see fit.

Brazil has proposed channeling 20% of returns to Indigenous and other local communities, or $800 million annually, which is more than double the amount these communities received to protect land in 2024, according to the Rights and Resources Initiative, a global coalition.

Juan Carlos Jintiach, executive secretary of the Global Alliance on Territorial Communities, described the TFFF in New York as "a possibility to change the current climate financing architecture, which ... sees us as beneficiaries rather than actors."

What are the risks if tropical forests remain unprotected?

Scientists say the impact of degradation and climate change has made vast swaths of the Amazon, the Congo Basin and other rainforests drier and more vulnerable to fires, which exacerbates climate change.

Last year, a record drought in the Amazon led to fires that burned twice the amount of forested areas in Brazil than the previous record, according to 40 years of data from mapping consortium MapBiomas.

This story was updated on Friday September 26, 2025 at 8:36 GMT with details throughout.

(Reporting by Andre Cabette Fabio; Editing by Ellen Wulfhorst and Ayla Jean Yackley.)