Description
The Tropical Forest Forever Facility (TFFF), Brazil’s $125 billion proposal for COP30, presents itself as a breakthrough in rainforest finance: a blended-finance model that promises to protect forests “at zero fiscal cost.” In reality, it represents the logical endpoint of the Wall Street Consensus – the belief that development outcomes can be delivered through leveraged market instruments if public funds absorb sufficient risk.
This paper dissects the TFFF’s core mechanism: donor governments borrow at lower interest rates to invest in BB-rated emerging-market debt, distributing the interest-rate spread as rainforest premiums while banks collect steady fees. The resulting structure mirrors a classic carry trade – not climate finance – with asymmetric gains and systemic tail risk for the public sector.
Drawing on leaked drafts, back-test data, and interviews with institutional supporters, the paper traces how the language of “green de-risking” and “loss-absorbing capital” rebrands speculative yield-chasing as climate altruism. It situates the TFFF within a broader trend of financialised aid that privileges investor confidence over developmental certainty, arguing that genuine results-based conservation requires stable, politics-proof concessional funding rather than leveraged speculation.
