Latest News

Sources say that China is investing in the Brazil-led Global Forest Fund

Two people familiar with the negotiations said that China had signaled the Brazilian government it would invest in the Tropical Forests Forever Facility. This is a multilateral fund to conserve endangered forests all over the world. China's investment in the fund that Brazil proposed first in 2023 would be a significant shift in climate financing, which relied on funding coming from wealthy nations responsible for global warming up to this point. China's commitment could allow emerging economies to contribute to climate change mitigation financially, going beyond the requirements of the 2015 Paris Agreement that were imposed on developed countries.

This new approach is being adopted as wealthy countries such as the United States back away from their ambitious pledges of funding projects to curb climate change. However, poorer nations are increasing pressure on these nations to do so as they struggle to deal with the effects of a warming climate. Last year, at the United Nations Climate Summit, leaders from developing countries criticized wealthy nations for their $300 billion annual global finance target. This was only a fraction of $1.3 trillion economists claim is needed. Sources say that Chinese Finance Minister Lan Fu'an, who met with his Brazilian counterpart Fernando Haddad, on Thursday, expressed his intention to contribute to TFFF (the Forest Fund for the Future), a fund to support the conservation of forests. The two spoke at a side meeting of finance minsters ahead of the BRICS summit, which begins in Rio de Janeiro this Sunday. One source who was present at the conversation said that Lan told Haddad that he thought the fund idea was important and that China would contribute. The discussion, however, did not include specific values. Sources say that the Brazilian government took the message of China's finance ministry as a sign that Beijing would contribute funds. However, a public announcement will not be made until the U.N. Climate Summit, COP30 in November.

The Chinese embassy in Brasilia, as well as the Brazilian Finance Ministry, did not respond immediately to a comment request. Sources claim that Brazilian President Luiz Inacio Lula da Silva discussed the fund in May with Chinese President Xi Jinping. Brazil is also looking to attract other developing nations with rich resources, especially from the Middle East.

The Brazilian government believes that the TFFF could be the main new deliverable for COP30 in Belem, an Amazonian city.

Policymakers envision TFFF to be a $125 billion endowment fund that combines contributions from the private and sovereign sectors. The fund would be managed as an endowment, with countries receiving annual stipends based upon how much of their rainforests remain standing.

Although sources don't expect the fund will launch at this scale, initial indications of support came from the U.K. France, Germany Norway, Singapore, and the United Arab Emirates.

After President Donald Trump backed out of the Paris Agreement, the initial support from the United States has evaporated.

The TFFF is a good example of the growing attention being paid to the conservation of tropical forests. These forests are rich in carbon that can help combat climate change. They also protect biodiversity. (Reporting from Lisandra paraguassu, Rio de Janeiro. Writing by Manuela andreoni. Editing by Brad Haynes & Chizu Nomiyama)

(source: Reuters)