Brazil to propose financing plan to protect tropical forests at COP28

Brazil is planning to launch a global financing framework to support tropical forests, according to officials, as the country seeks to regain its role as an environmental leader at the upcoming UN climate summit in Dubai.

Under the proposal, which is set to be announced by President Luiz Inácio Lula da Silva at the COP28 summit that starts next week, a fund would be created to offer compensation to residents and landowners who help preserve forested areas such as the Amazon.

The maintenance of wooded areas — particularly the rainforests of Brazil, Indonesia and the Democratic Republic of Congo — is crucial in the fight against climate change because of their vital role in absorbing and storing large amounts of carbon dioxide emissions.

The biomes, however, are typically populated by poorer citizens, for whom the extractive industries that fuel deforestation — such as logging and gold mining — offer more enticing economic opportunities. In the case of Brazil, the CO₂ released by deforestation accounts for about half of the country’s total emissions.

“We need to have resources in volume, quantity and frequency to finance those who own forests,” Marina Silva, Brazil’s environment minister, told the Financial Times. “Because today the initiatives we have only encourage those who are deforesting to stop deforesting. They don’t encourage or pay those who are already preserving and keeping the forests standing.”

According to two people familiar with the proposal, one option being considered is an investment fund with money from institutional and other long-term investors, with a set rate of return. Anything the fund earns above this rate would go directly to forest dwellers to maintain their habitats.

After years of being seen as an environmental villain under Jair Bolsonaro’s presidency, Brasília is keen to demonstrate it is fighting climate change and can reap economic benefits from doing so. The country has been confirmed as the host of the 30th UN climate summit, to be held the Amazonian city of Belém do Pará in 2025.

“[We] want to show concrete initiatives,” said one of the individuals involved in the government’s proposal. “This plan is part of the discussion on how to value nature and standing forest and meet the urgency of the moment. It is part of the nature-based economy that needs to be created to replace the illicit economy in the rainforest.”

The idea originated at a summit for Amazonian nations in Brazil earlier this year and its officials hope it will eventually be supported by 80 countries.

“It’s not top-down. It has to be a bottom-up exercise,” said André Aranha Corrêa do Lago, a senior Brazilian diplomat, about Brasília’s environmental efforts. “At COP28, we’re going to have the beginning of a very important new stage. What has to be done will be debated first by the countries that have tropical forests.”

Lula took office in January this year on pledges to protect the environment and crack down on deforestation in the Amazon, which surged under Bolsonaro. Almost all deforestation in the rainforest is carried out illegally by myriad interests including loggers, ranchers and wildcat gold miners.

Lula’s efforts have shown promising early signs, with the country reporting an almost 50 per cent drop in deforestation in the first eight months of the year compared with the same period last year.

The leftwing leader has also been outspoken about the need for developed economies to shoulder a larger burden in the fight against climate change.

“We’re going to COP28 with the aim of telling the rich world that if they want to effectively preserve what’s left of the forest, they need to put money not just into looking after the forest canopy, but into looking after the people who live there,” Lula said earlier this year.

People involved in the plan expect the fund to start small — potentially about $100mn — but to grow substantially. “Everyone knows it has to be much bigger than $100mn,” said one person close to the government, adding that investors may be deterred “if you start by asking for a trillion [dollars]”.

The fund would be likely to be co-ordinated by a multilateral institution such as the World Bank, said two people involved.

“We know that there needs to be a volume of resources that perhaps, until today, has never been proposed,” said Silva. “Although many initiatives for forest protection exist, unfortunately the private resources have not been . . . contributed. We think we have found an efficient, creative and easy way to do this.”

Additional reporting by Beatriz Langella

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