Brazil’s Forest Fund invites a rethink of how the world values nature

There were many reasons to pay attention to this year’s United Nations General Assembly. One came from Brazil’s President Luiz Inácio Lula da Silva, who positioned himself as a protector of planetary stability. At UNGA, he called on the world to invest in the Tropical Forests Forever Facility (TFFF), an instrument to reshape how the world values forests. Two months later, at COP30 in Belém, several countries committed a combined US$6.6 billion to the Facility, signalling that the TFFF is no longer an idea but a live experiment in rethinking the economics of conservation. 

The TFFF is an investment and endowment fund, and one of the boldest attempts yet to rewire how the world fights deforestation. With a scale that dwarfs the piecemeal and underfunded donor-based models of the past, the TFFF could mark a first: a results-based mechanism that pays countries systematically for keeping tropical forests standing.

Its design is straightforward in theory. Investor capital is pooled into a diversified portfolio of financial instruments. Returns first repay investor governments and private investors. The surplus is then distributed to tropical forest countries that keep deforestation near zero. In practice, this means that countries such as Peru and Brazil could receive payments for maintaining forest stability, while others with ongoing forest loss, such as the Democratic Republic of Congo, China, and Indonesia, would not yet qualify. The design rewards progress toward zero deforestation, creating clear fiscal incentives for governments to strengthen monitoring and enforcement over time.

The current design of the TFFF includes performance and verification safeguards, rules for results-based payments, and a mandatory allocation of at least 20% of proceeds to Indigenous Peoples and Local Communities (IPLCs) through national mechanisms. Direct, rules-based pathways for communities to access finance as managers, not just beneficiaries, represent one of the facility’s most innovative features.

Yet there is perhaps another innovation the TFFF provides: a bridge toward an economic paradigm where forests move from the margins of the economy - charity, offsets, or philanthropy - to the centre of sovereign balance sheets.

What we count counts

Our global economy treats nature as invisible. Creditors recognise pipelines, ports and power plants as collateral, but not the ecosystems that stabilise them.

The outcome is a systemic bias: it remains easier to profit from clearing forests than to derive value from keeping them intact. For example, for governments under debt pressure or structural adjustment, clearing land yields quick foreign exchange, even when the long-term cost is ecological collapse. Brazil, Indonesia, and Gabon in the 1980s are textbook examples of forests converted to meet external debt obligations. Meanwhile, investors today back roughly US$8.9 trillion in commodity value chains that erode the ecosystems underpinning their own returns. Ratings agencies, central banks, and oversight bodies treat those losses as externalities, using balance sheets and risk models that misprice the destruction of tropical forests and other natural assets worldwide.

The decision to draw the boundary of GDP around factories but not forests was a deliberate choice. That choice created growth in some areas while hiding depreciation in others, including nature. Extractive practices have damaged ecosystems, wiping out 70% of insect populations, depleting 80% of coral reefs and fish stocks. Any company that depreciates its assets without replacement eventually goes bankrupt; the global economy is heading the same way as nature.

At this very moment, we are in an era of rapidly re-counting assets: an equally deliberate choice. Semiconductors, critical minerals, and compute power have been pulled into the centre of industrial policy and geopolitical competition. Forests, the living infrastructure of climate and water systems, the genetic libraries of future medicines and resilient crops, have remained outside the ledger. The TFFF could help bring them onto it.

Counting nature - TFFF

The TFFF creates a clear and verifiable link between how forests perform and how governments earn. It offers a first prototype for how natural capital could appear on sovereign balance sheets. Payments, currently capped at about US$4 per hectare, are modest relative to the economic pressures driving deforestation, but they do set a precedent: a direct fiscal flow tied to verified ecological performance.

By turning forest stewardship into an auditable revenue stream, the TFFF allows ecosystems to be recognised as public assets that generate measurable, contract-based value. This gives governments both the incentive and the tools to account for non-market services like carbon storage, water regulation, and soil fertility.

In effect, standing forests become productive assets, legible to markets, visible to credit agencies, and potentially eligible as collateral. The monitoring and registry systems behind the TFFF provide the data trail needed for trust and auditability. As these revenues become predictable, they can improve fiscal stability through tighter credit spreads, greater borrowing headroom, and lower capital costs for high-integrity stewardship.

Ecosystem performance starts to reinforce sovereign credit, and stronger credit, in turn, finances better ecosystem performance. That is what it means to bring nature onto the balance sheet.

Nature on the balance sheet

There could be cascading implications. 

For sovereigns, nature-rich countries could approach creditors not with empty hands but with billions in ecological wealth formally recognised, strengthening bargaining power in debt negotiations and credit ratings.

For investors, investment in nature would reduce portfolio risk and open space for new performance-linked instruments.

For households, stable ecosystems mean more predictable food and water prices, with forests not abstractions but buffers against everyday volatility.

For indigenous peoples and local communities, recognition of ecosystems as assets strengthens the case for tenure rights and community leverage in the face of industrial pressures.

Altogether, biodiversity and ecological functions would enter the economy not as exploited commons but as sources of strategic value, giving forest nations a stronger voice in global markets. In short, one mechanism, natural capital accounting, would ripple through households, markets, communities, and geopolitics.

No country yet meets all the data and governance requirements for this system, but that is the point: tying finance to verifiable ecological performance will incentivise the creation of those capabilities.

Governments would not be starting from scratch. Many already produce natural capital accounts in satellite form, often buried in environmental ministries or statistical agencies. The TFFF could elevate these into the domain of finance ministries, integrating ecosystem indicators with GDP, fiscal deficits, and infrastructure dashboards. Once counted officially, ecosystem services could then influence procurement, subsidy reform, and industrial policy. In practice, the accounts become both a mirror - revealing nature’s real contribution - and a compass, steering public and private capital toward assets that make resilience possible.

The TFFF can be the first step toward building an economy that actually trusts nature. To make that trust real, three ingredients will matter.

First, credibility. If payments for forest stewardship are to reshape global finance, they must be rigorous and verifiable. The TFFF should have a clear and robust canopy threshold - any forest area above that line must be monitored and accounted for. This clarity removes ambiguity and ensures consistent, auditable reporting.

Second, transparency with sovereignty. Digital infrastructure should make ecosystem performance visible without eroding national control. The TFFF should support sovereign data platforms connected through interoperable standards, giving countries ownership of their information while still enabling global auditability. This architecture builds trust without imposing uniformity, allowing each nation to anchor its natural wealth in data it governs.

Third, openness. The infrastructure behind the TFFF should operate as a digital public good. Decision-grade data on carbon, water, biodiversity, and soil health could inform not only TFFF disbursements but also the wider economy, from insurers and supply chains to local cooperatives. An open yet sovereign data layer could spawn a marketplace of interoperable tools, risk models, insurance mechanisms, and verified investment products, all built on consistent ecological baselines.

Together, these principles would form a system of trust that anchors financial value in living systems.

The balance sheet moment

President Lula’s announcement was an invitation to redefine how to manage planetary assets and our wealth in the twenty-first century. COP30 in Belém confirmed that the world is willing to test that proposition with real money; in the year ahead, the COP Presidency will aim to reach US$10 billion in capitalisation. 

Failure to accept this invitation would be catastrophic. Insufficient investment to prevent deforestation in the Amazon, Congo and Southeast Asia rainforest basins would tip critical systems from self-watering rainforests into dry, fire-prone savannahs. Regional and downwind rainfall patterns would unravel, agricultural breadbaskets would fail, export-import corridors would be wiped out, food scarcity would become famine, and the world would have to deal with an unprecedented migration surge that would strain governance, security and social cohesion across continents. Seen in this light, the TFFF can be more than just another fund; it can create a balance sheet moment where forests really do become global assets.

illuminem Voices is a democratic space presenting the thoughts and opinions of leading Sustainability & Energy writers, their opinions do not necessarily represent those of illuminem.

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