Brazil is set to propose a global financing framework to raise funds for the conservation of tropical forests at the upcoming COP28 UN climate change summit in Dubai, as reported by Reuters on November 23. At COP28, Brazilian President Luiz Inácio Lula da Silva will announce the fund designed to compensate residents and landowners who help preserve forested areas such as the Amazon. According to two people familiar with the matter, the fund might be created in the form of an investment fund with contributions from institutional and long-term investors. The fund would offer a fixed rate of return, and any earnings above this rate would directly benefit forest dwellers for habitat maintenance.

Brazil’s environment minister, Marina Silva, stated the need to offer resources and capital to people who are already preserving the forests. The move intends to dissuade poorer citizens living in wooded areas from being enticed by deforestation-related economic opportunities, such as logging and gold mining. The proposed fund aligns with President Lula’s core environmental agenda of combating deforestation in the Amazon. Notably, in the eight months since Lula took office in January 2023, the destruction of the Amazon rainforest dropped by 50% compared with the same period last year. Furthermore, the proposal also sent a clear message to developed economies that effective forest preservation requires not just financial contributions for sustaining the forest, but also ensuring the well-being of people inhabiting these regions.

Sources:

https://www.reuters.com/sustainability/land-use-biodiversity/brazil-propose-mega-fund-conserve-forests-cop28-climate-summit-2023-11-23/

https://www.ft.com/content/df19b473-e468-4c2a-a56b-692db26b0174