Factoring forest resilience into the global temperature rise limit of 1.5°C, as stipulated by the Paris Agreement, remains a challenge. While some have labeled scientists as alarmists, their predictions have proven to be conservative. “Their forecasts are happening slightly faster than anticipated. Our task is to maintain the forest’s integrity. It’s crucial to understand that about 50% of rainfall comes from evapotranspiration,” said Garo Joseph Batmanian, director-general of the Brazilian Forest Service.

This means that fewer plants result in less atmospheric moisture. “This leads to drier forests, increasing the dryness of any remaining ones. For a forest to thrive, it requires a minimum monthly and annual rainfall,” he added.

Brazil has pledged to restore 12 million hectares by 2030. Although progress slowed during the Bolsonaro administration, Mr. Batmanian insists the goal remains. “Restoring the right areas, particularly in deforestation arcs, creates buffer zones. Large-scale restoration in appropriate locations enhances resilience for future challenges,” he argues.

The TFFF is one of Brazil’s primary initiatives, though its details are still being finalized. “We haven’t, like other countries, come with a fully defined plan, dictating all rules and figures. We offer leadership but do not claim ownership of the concept. If everyone agrees on the principles, we can discuss specifics, understood?”

Mr. Batmanian, an Egyptian-born Brazilian ecologist of Armenian descent dedicated to this cause since the 1980s, understands that idealism alone won’t save forests. How can financial leaders be convinced it’s a profitable venture? Through reasonable profits.

The proposed fund is “akin to a savings account,” he explains, emphasizing the need for more than donations, which are welcome but insufficient to provide the necessary predictability for an ongoing task. Nature-based solutions cannot rely on the goodwill of governments or private sector entities, domestically or abroad, he notes.

The TFFF’s returns aren’t substantial, nor are the risks. Initially, the fund, with $25 billion in capital, would leverage resources up to $125 billion and incorporate a mechanism akin to Brazil’s Credit Guarantee Fund (FGC), assuring savers in the banking system that their investments are secure.

This fixed-income fund would generate returns through sovereign bonds and other high-grade securities. The substantial funds Brazil targets only invest in assets with this classification.

The tropical forests benefit from the margin between promised returns to investors and any excess generated by the fund’s management. This financing will support existing or new projects in 70 countries with such forests, including Brazil. Only those maintaining minimal deforestation levels receive funds. It’s meant to be straightforward.

“Our question is: what happens when a country already controls its deforestation? It no longer receives funds for reducing it. Yet, the challenge remains to keep the forest intact. Without this, deforestation could resume over time,” Mr. Batmanian explains.

“We’re proposing a system complementary to carbon credits to reward good behavior. If a country meets the eligibility criteria, it receives X dollars per hectare of preserved forest,” he says. Payments would be based on satellite imagery typically used by countries. In Brazil, the Project for Monitoring Deforestation in the Legal Amazon by Satellite (PRODES) is employed.

“It’s not about calculating the carbon content of a forest. It’s about rewarding a well-maintained forest with a set amount, visible from satellite images. This approach applies to all 70 developing countries with forests,” he emphasizes.

Brazil has approached five forested countries: Colombia, Ghana, the Democratic Republic of the Congo, Malaysia, and Indonesia. It has also reached out to potential investor countries or those that may lead others to invest: Norway, France, the United Kingdom, Germany, the United States, and the United Arab Emirates.

Additionally, a penalty system is proposed: for each deforested hectare, a country loses the right to claim benefits for 100 hectares of forest. “This is a proposal. The collective of countries might prefer 200 or 50 hectares as the penalty. It incentivizes countries to continue pursuing zero deforestation,” says Mr. Batmanian, who has been part of technical meetings and discussions with interested nations.

In this context, restored hectares also earn credits. This ties into another key area for Mr. Batmanian, who led the World Bank’s Global Forests, Landscapes, and Biodiversity program in Washington, directed WWF-U.S. Latin America Program, and served as WWF-Brazil’s first secretary-general when it was established in 1996.

He is enthusiastic about the upcoming first round of public forest concessions, expected in early 2025. The tender for restoring 15,000 hectares of the Bom Futuro National Forest in Rondônia is set to be released, with the eventual goal of these areas being recognized in PRODES imagery.

The Brazilian Forest Service, tasked with managing public forests, has requested the PRODES operators to identify degraded or deforested areas within conservation units. “We seek restored hectares. Entrepreneurs profit from the carbon of restored hectares. It’s a win-win situation. They don’t just want to plant trees; they want them to grow and generate carbon,” he says.

Pragmatic and creative, Mr. Batmanian emphasizes the need for sustainable economic models tailored to each biome. “Carbon models work best in the Amazon, where forests accumulate more carbon per hectare. The Bom Futuro model might not suit the Pantanal or elsewhere,” he explains. The model was developed by the Brazilian Development Bank (BNDES) and is deemed economically viable.

Beyond the forest itself, Mr. Batmanian highlights local job and income generation, as seeds need collection, and seedlings require planting. “There’s also a clause for ‘additional charges,’ mandating a percentage of revenue be invested in local improvements, benefiting surrounding communities and contributing to area protection,” he notes.

Several companies are already restoring land in Brazil and selling credits. However, when done on private land, the costs and risks can be prohibitive, especially in the Amazon. “They must verify land ownership to ensure it’s not illegally occupied. Land purchase is also required. In a concession, neither is necessary,” he says.