News: India welcomed Brazil’s initiative to establish the Tropical Forests Forever Facility (TFFF) for conserving tropical forests.
About Tropical Forests Forever Facility (TFFF)
- The TFFF is a mechanism that incentivizes conserving and expanding tropical forests by making predictable annual payments for maintaining standing forests.
- Aim: The Facility aims to remunerate countries for keeping forests intact, valuing ecosystem services, and making standing forests economically preferable to deforestation.
- Initiative by: The initiative is led by Brazil, with India participating as an Observer.
- Launched at: It is launched at COP30 in Belém, Brazil.
- Member: So far, five other tropical forest nations have joined which are – Colombia, Ghana, the Democratic Republic of Congo, Indonesia, and Malaysia.
- Potential investors: Germany, the United Arab Emirates, France, Norway, and the United Kingdom are helping shape the mechanism as potential investors.
- Funding
- Junior capital: Investor nations are expected to provide an initial USD 25 billion as junior capital,
- Private senior capital: With this injection, it should be possible to leverage an additional USD 100 billion in private senior capital over the next few years.
- Projections indicate the mechanism could generate about USD 4 billion annually for environmental preservation.
- Functions
- Performance verification: Participating countries must submit annual, satellite-verified reports to prove conservation performance.
- Payment formula: Payments are based on USD 4 per hectare preserved and may be cut or discounted if deforestation or degradation is measured.
- Spending autonomy: Beneficiary countries retain autonomy to decide the final use of the funds.
- Indigenous allocation: Countries must set aside 20% of the resources specifically for indigenous peoples and traditional communities.
- Investment exclusions: Investments in projects involving fossil fuels are prohibited.
- Green prioritization: Priority is given to actions and securities from governments and companies in emerging countries and to products considered green.
- Carbon Market and TFFF: Compared to a carbon-credit coalition that compensates actors for greenhouse-gas removals under a gradually reducing global cap, the TFFF would pay sovereign states for keeping forests intact, creating clear complementarity.
