In , taking a share in the new global forest fund, the Tropical Forests Forever Facility. declared support, but has not yet set values, while initial announcements total just over US$5.5 billion, with Norway leading the way. Tropical forests regulate rainfall that feeds hydroelectric plants and crops, buffers heat and stabilizes production chains. Without forests, production becomes more expensive, volatility increases and the population is more exposed to climate extremes. How to transform conservation into predictable revenue?
Sometimes conservation policies fall short because they operate with vague promises and lax verification. It transforms conservation into recurring revenue, verifiable and comparable between countries. , raising public, philanthropic and private resources in a fund closed to fossils. Assets must yield above the cost of debt; the surplus becomes an annual payment per hectare preserved. The ambition is to operate with US$125 billion under management. The reference value starts at U$4.00 per hectare per year.
Check what is left standing by satellite and then pay. There are conditionalities: keeping the amount below agreed limits and on a downward trend, publishing data and allocating twenty percent of resources to initiatives with indigenous peoples and traditional communities. Countries are the beneficiaries and implementation must provide for subnational transfers for inspection, land regularization and productive alternatives. These elements respond to problems with previous mechanisms: slowness, weak verification and lack of automatic consequences.
This architecture speaks to Elinor Ostrom, winner of the 2009 Nobel Prize for Economics. Instead of a single command, the TFFF adopts a polycentric arrangement: it defines global rules and metrics, but leaves execution, monitoring and distribution in local layers.
In practice, this operates through four mechanisms. First, independent verification combines satellite with local data, fulfilling the function of mutual observation to reduce opportunism. Second, performance contracts with automatic penalties represent gradual and predictable sanctions. Third, the mandatory allocation of resources to traditional communities turns beneficiaries into inspectors of compliance with the rules. Fourth, multilateral fiduciary management equalizes power between governments, donors and civil society, preventing political capture.
However, the heart of the design is behavioral. As shown, losses weigh more than equivalent gains. The TFFF transforms “receiving for conservation” into the status quo and attaches an automatic penalty to deforestation: US$4.00 is paid per hectare conserved, but if monitoring detects a deforested hectare, the equivalent of 100 hectares is deducted from the eligible total. Whoever loses one hectare loses the payment of one hundred. The marginal gain from deforestation is dominated by a greater cash loss. In other words, the mechanism uses loss aversion as budgetary discipline.
For states and municipalities, a predictable flow allows planning inspection, regularization and productive alternatives, instead of living off erratic notices. For the Union, comparability generates reputation and learning among peers, and fiduciary management reduces the temptation to relax rules when goals are exceeded. The arrangement also needs to look for leaks: when politics tightens in one biome, pressure can migrate to another.
The fund is an advance, but it does not alone resolve the forest’s economic dilemma. Transforming conservation into recurring revenue is necessary, but insufficient. Without a green economy that generates income and replaces predatory activities, budgetary incentives end up being eroded by the need for local survival. Formal rules work when they dialogue with local adaptation capacity. TFFF helps create predictability and reputation, anchoring stable payment for the standing forest. But for it to work, it needs to be coupled with a development strategy that treats the forest as productive infrastructure and local work as part of the solution.
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