The Battle of Incentives: Can Lula’s Fund Outbid the Loggers and Ranchers?

The Brazil climate summit is the stage for a new “battle of incentives.” The central question is: can a global fund for preservation outbid the powerful, on-the-ground profits of destruction? President Luiz Inácio Lula da Silva is betting $5.5 billion that it can.
His “Tropical Forests Forever Facility” is a direct economic challenge to the cattle ranchers, miners, and illegal loggers who profit from deforestation. The fund would pay 74 developing countries to keep their forests intact, creating a new, sustainable revenue stream.
The proposal, announced in the Amazonian city of Belem, is to make conservation more lucrative than exploitation. To do this, the fund is moving beyond small-scale donations and will be financed by large, interest-bearing loans from wealthy nations and commercial investors.
This financial mechanism is essential for protecting the world’s carbon sinks. These forests absorb vast amounts of CO2, and Brazil is arguing that this global service is far more valuable than the timber or beef produced from cleared land.
The plan has strong early backing, with $3 billion from Norway. It also builds in a crucial alliance, allocating 20 percent of funds to Indigenous peoples. But it faces a tough fight against the deep-rooted economic forces of deforestation and a divided global political stage.