A new and unconventional proposal is dominating climate talks in Brazil: using debt to save the world’s tropical forests. President Luiz Inácio Lula da Silva has proposed a fund that would pay 74 developing nations to not cut down their trees, financed by loans rather than traditional donations.
This “Tropical Forests Forever Facility,” announced at the summit in Belem, aims to flip the script on conservation. By using interest-bearing debt from wealthy countries and private investors, the plan seeks to make preservation a more profitable venture for governments than destruction.
The logic is simple: currently, destroying rainforests makes money for cattle ranchers, miners, and loggers. Brazil hopes to create a new, more powerful economic incentive that rewards the entire world by absorbing huge amounts of carbon dioxide, the greenhouse gas driving climate change.
The initiative has already attracted significant financial backing, with Brazilian officials announcing $5.5 billion in pledges. Norway led the way with a $3 billion commitment, and more is anticipated from Germany following a meeting between Chancellor Friedrich Merz and Lula.
While the financial model is innovative, the summit is not without its challenges. The leaders of the top three polluting nations—China, the US, and India—were absent from the preliminary gathering. This division prompted a sharp warning from the UN chief about “deadly negligence” if the 1.5-degree warming limit is breached.