Can a Financial Incentive Stop Global Deforestation

Brazil is raising 125 billion dollars from institutional investors and private sources for a global investment fund.
The initiative, presented before the annual climate summit COP30 in the city of Belem in the Amazon, is meant to reward countries that preserve their tropical forests through payments based on forest conservation.

Since most major rainforests are located in poor tropical countries, it was easier to profit from clearing forested areas than from preserving them.
A senior adviser on climate affairs in the Brazilian Ministry of Finance said that decades of promises by wealthy countries to finance the fight against deforestation were not fulfilled.
Deforestation rates remain high.

An area equal to eighteen soccer fields of primary forests was cut or burned every minute in 2024. Rainforests are rich in biodiversity and help regulate the climate.
Their destruction releases large amounts of stored carbon.
The Brazilian initiative is intended to stop this trend and create a reliable long term income source that reduces the economic incentive for cutting trees.

However, the path forward is difficult.
Leaders of the initiative must first raise twenty five billion dollars from sponsoring governments that want to improve their conservation abilities and are willing to absorb losses if the fund performs poorly.
Later the hope is to attract an additional one hundred billion dollars from private investors such as pension funds and sovereign wealth funds.

Only countries with an annual deforestation rate below zero point five percent will qualify.
These countries must maintain the threshold every year to continue receiving payments.
The fund can begin operating even without the full initial capital, which is important since so far Brazil is the only country that has committed funding.
Some diplomatic sources expressed concern about the monitoring methods of the fund and about the high credit rating required to attract outside investors.

Observers said it is a difficult period to ask governments for major conservation donations, but stressed that the long term project may gain support over time.
Brazil recorded the largest annual drop in greenhouse gas emissions last year since 2009.
The reduction was attributed to success in fighting deforestation, with a commitment to reach zero deforestation by 2030.
Despite this, support for a major oil project near the Amazon River delta has raised concern, even though leaders claim the oil income will fund the climate transition.