Brazil has $167 billion plan to make COP30 talks rare climate success

SAO PAULO – Brazil plans to launch an ambitious US$125 billion (S$167 billion) fund to protect tropical forests when it hosts the COP30 climate summit in November.

The investment vehicle is part of a broad strategy to turn the talks into action after a US withdrawal from climate diplomacy threatens to slow progress.

Discussions are advanced, and some countries have already expressed interest in joining the list of anchor contributors, including Germany, France, the United Arab Emirates and Singapore, according to Dr Rafael Dubeux, executive secretary at Brazil’s Finance Ministry. The new fund should be ready to receive contributions by the time the summit starts in the city of Belem, Dr Dubeux said.

The idea behind the initiative – dubbed Tropical Forests Forever Facility – is to pay nations a fee for every hectare of forest they maintain.

Brazil, Colombia, Indonesia and the Democratic Republic of the Congo are among the heavily forested countries that stand to benefit. The World Bank is helping to develop the fund and is expected to manage it.

Brazil’s forestry fund is just one way officials are looking to make COP30 a landmark event – with plans to also kick off discussions on a multilateral carbon market and a common framework for defining sustainable investments.

The summit, being held in the Amazonian city of Belem, marks the 10th anniversary of the historic Paris Agreement, a global accord that commits nearly every country in the world to keeping warming to well below 2 deg C, and ideally 1.5 deg C, relative to pre-industrial levels. Yet, COP30 follows a recent series of lacklustre UN summits that has added to a sense of backsliding.

US President Donald Trump is pulling the world’s second-largest emitter out of the Paris accord for the second time and slashing international aid. Europe, meanwhile, has begun to focus more of its foreign aid on defence spending to support Ukraine’s war against Russia.

Brazil now must work extra hard to prove that multilateralism can still address climate change amid geopolitical distractions and the US retreat.

“Our COP starts a new decade,” Dr Ana Toni, chief executive officer of COP30 and Brazil’s vice-minister for climate change, said in an interview in Brasilia. “From now on, the big task for the next COPs is how to accelerate the implementation of what has already been agreed.”

Global warming already exceeded 1.5 deg C on an annual basis for the first time in 2024, and temperatures will continue to rise unless drastic action is taken to curb greenhouse gas emissions.

Amid the slow pace of decarbonisation, Brazil sees ready-made solutions like forest conservation as a way to buy time on a rapidly warming planet.

Trees are already absorbing billions of tonnes of carbon dioxide (CO2) each year – CO2 is the main greenhouse gas. And while deforestation has declined in the Brazilian Amazon under President Luiz Inacio Lula da Silva, it has been rising worldwide, with 6.4 million hectares lost in 2023.

Brazil expects rich nations to loan the tropical forest fund US$25 billion to kick-start the initiative. That amount would help attract another US$100 billion from the private sector. All the money would be invested in a diversified portfolio that could generate returns to repay investors as well as reward countries for preserving their forests.

“It’s something innovative because it’s different from asking for a donation; it’s an investment,” Dr Dubeux said. 

Beneficiaries will be able to use the money as they wish and not necessarily in reforestation, he said. What will matter is whether their forests are preserved, which will be checked with the use of satellites.

Along with forest finance, COP30 wants to innovate carbon markets.

Dr Dubeux said the presidency will attempt to form a coalition of countries volunteering to adopt an emissions ceiling, adjusted based on national per-capita income.

Poor nations would have slightly more room to continue emitting, while rich countries would have less flexibility. For countries that decline to join the coalition, Brazil will propose a border adjustment. The goal is to reach “a minimum critical mass” of countries “to make a broad regulated carbon market work”, said Dr Dubeux.

“The integration of the carbon markets could be one of the most important legacies of COP30,” he said.

A common taxonomy for sustainable investments, another aim of Brazil, would avoid greenwashing and enable more targeted public policies and private investments.

While it is still not clear whether US representatives will attend the talks in Belem, Mr Trump will likely loom over proceedings. His tariffs could slow climate progress by draining countries’ resources and eroding trust, Brazilian Environment Minister Marina Silva said last week.

The Trump administration’s wavering support for Ukraine has prompted European nations to make up the difference in military aid. This could impact green commitments, said Ms Silva.

There are other worrying signs. Relatively few countries met a February deadline to submit updated climate plans, known as Nationally Determined Contributions, for the next decade. While most are expected to get theirs in before the summit, the majority of submissions so far have lacked the necessary ambition set out in the Paris accord. 

COP30 organisers nevertheless hope to make progress on the thorny issue of climate financing.

At 2024’s COP29 in Baku, Azerbaijan, rich countries agreed to provide at least US$300 billion for poorer nations annually by 2035, through a wide variety of sources, including public finance as well as bilateral and multilateral deals. But the amount promised was only a fraction of what developing countries had sought, leaving them disappointed.

As host of 2025’s Brics summit in July as well as COP, Brazil is discussing a joint position on climate finance with other nations in that group, which includes India, China, South Africa, Russia, Indonesia and the United Arab Emirates.

“The Brics countries are interested in strengthening coordination” on the issue, said Mr Mauricio Lyrio, secretary for economic and financial affairs at Brazil’s Foreign Ministry.

Although the US exit from the Paris Agreement will have “very bad effects for all the world”, COP30 CEO Toni said, she emphasised that no one country can stop the momentum behind the green transition.

“The decarbonisation train has already left the station,” she said. “There’s no turning back.”
BLOOMBERG