World leaders launch forests fund, get first $5B

BELEM, Brazil (AFP) — World leaders attending a climate summit in Brazil launched a fund Thursday to save the world’s forests, quickly raking in over $5 billion in pledges to reward tropical countries for not chopping down trees.

France pledged a conditional 500 million euros, Portugal added a more modest $1 million, and Germany made an unspecified commitment.

Norway on Thursday pledged 30 billion kroner ($3 billion) for loans, but with strings attached.

The initial government commitments still fall far short of what is needed for the fund to attract the private investment it seeks, but Brazil’s President Luiz Inacio Lula da Silva still described the Tropical Forests Forever Facility as unprecedented.

Ultimately, Brazil — the fund’s political sponsor — seeks to create a $125-billion facility that would pay out a share of profits to developing countries for every hectare of forest they leave standing.

Private investors would also receive a return from funds invested mainly in emerging market bonds.

“Such a fund, which will help us, comes at the right time,” Abe Assamoi, an Ivory Coast representative, told Agence France-Presse in Belem, a city at the edge of the Amazon rainforest.

“We have certainly lost a lot of forests, but we have implemented a comprehensive strategy to reforest our country... We have ambitious goals,” but these require money, he added.

The fund was launched in Belem Thursday as heads of state and government met ahead of an annual round of United Nations climate talks starting next week.

The designers of the fund envision raising $10 billion in initial contributions from governments within a year — a figure revised downward in the face of an initial lackluster response.

The $10 billion should be increased to $25 billion in the longer term — startup money that will then attract private investments worth another $100 billion.

Brazil hopes the fund will create a reliable, long-term revenue stream, an alternative to tropical countries cutting down forests for economic gain.