Wall Street investors have earned billions financing activities linked to deforestation in the tropics, with forest loss reaching record highs last year. But a major proposal by Brazil’s COP30 presidency wants to turn financial markets into allies of the rainforest.
The Tropical Forest Forever Facility (TFFF), a proposed new fund seeking to raise cash for conservation efforts in tropical countries, is set to be launched at the COP30 climate summit in Belém later this year.
Brazilian President Luiz Inácio Lula da Silva has rallied behind the initiative and secured key endorsements from the eight South American nations home to the entire Amazon Basin. Private banks and countries in the BRICS group of large emerging economies have voiced support.
COP30 president André Corrêa do Lago has said “the TFFF is the right answer for forest conservation”.
The initiative comes as developing countries have complained about being unable to access existing forest funds at the Global Environment Facility (GEF), while foreign aid budgets which have funded forest conservation shrink in the US and Europe.
Yet finance needs in developing countries are large and growing, with estimates ranging between $20 billion and $72 billion every year to protect forests. In contrast, in 2022, the total finance destined for forests was just $2.3 billion.
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What is the Tropical Forest Forever Facility (TFFF)?
The TFFF is being proposed as a blended finance instrument, with funding from both public and private sources. It would seek to directly pay tropical countries that can show effective forest protection.
On paper, the TFFF will get its money similarly to an investment fund. Donor countries and private investors put their money in the fund, which then invests the capital in financial markets. A part of the returns is used to pay back investors and what remains is allocated to forest protection in tropical countries.
“Think of a bank that runs normal market operations but that directs its profits not to shareholders but to forests,” said João Paulo de Resende, undersecretary for economic and fiscal affairs at Brazil’s Ministry of Finance.
In its most recent version, Brazilian officials propose that the fund starts with $125 billion in capital, of which $25 billion would come from donor countries and $100 billion from private investors.
The payments to forest countries would depend on the returns of the fund, but an 8% yield would allow the fund to pay at a rate of about $4 per hectare of protected forest — which in total could raise an estimated $2.8 billion for rainforests every year.
The Brazilian government has said donor countries could include the United Kingdom, Norway and the United Arab Emirates, while private investors endorsing the fund include investment managers PIMCO, Bank of America and Barclays.
Recipients would include tropical countries in major rainforest basins such as Colombia, the Democratic Republic of Congo (DRC) and Indonesia, among others.
How is the TFFF different from other climate funds?
Other UN funds like the Green Climate Fund (GCF) or the GEF mostly give out one-time grants to countries that reduce emissions through projects and programmes to protect or restore forests (an approach known as REDD+). The TFFF would instead aim to reward countries that have kept their forests standing and can show results.
This “results-based payments” system is not new – the GCF, for example, gave out more than $500 million between 2015 and 2020 in this way. However, a fund solely for countries that can show success in preventing deforestation is a new way to target large intact rainforests, which struggle to receive REDD+ funding, said Torbjørn Gjefsen, international forest finance advisor at the Rainforest Foundation Norway.
“There is complementarity. It’s not competing with REDD+,” said Gjefsen. “If fully operational, it will substantially increase the amount of funding available for this kind of results-based payments.”
Amid a context of tighter foreign aid spending, another key difference is that the TFFF would seek to attract investments rather than depending on donations from public budgets.
The fund’s concept note claims that, if fully operational, the one-time investment from donor countries would allow payments to forest nations for as much as 40 years in the future.
Finally, unlike the other UN environmental funds, the TFFF is being proposed as a mechanism hosted by the World Bank outside of UN environmental conventions.
Sandra Guzman, founder of the Climate Finance Group for Latin America and the Caribbean (GFLAC), said this could potentially help convince large developing countries like China to contribute funds without having to assume donor-country responsibilities at the UN negotiations. Chinese officials have welcomed the TFFF and said they “hope it plays a positive role”.
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How will the TFFF make money from financial markets?
In tapping financial markets, the TFFF will have to also deal with risk. If investments don’t generate the expected yields, payments to forest countries would need to be paused and paid out later, de Resende said.
The Brazilian government’s estimates show that if the TFFF had been operating in the last 20 years, it would have been under financial stress on two occasions: during the 2008 financial crisis and during the COVID-19 pandemic. The TFFF’s models project a 60% chance that payments to forest countries would need to be slightly reduced at some point in the fund’s lifespan.
The Brazilian authorities remain optimistic, as most value fluctuations are likely to be small, they say. Resende said that “over the long run, this risk is minimal.”
The TFFF’s main strategy is to get cheap money from investors and lend money to emerging economies at much higher interest rates. Emerging market bonds would account for as much as 80% of its investments.
Critics say this could be a risky strategy, which is precisely why these emerging countries pay higher interest rates. “The risk of Egypt’s state bond is just not the same as the risk of US treasury bonds,” said Max Alexander Matthey, co-founder of Climate Impact Auctions.
Another key point is that, for the fund to achieve the promised payments, it would need to borrow money at a very low cost, so it would need a top-category AAA rating from credit rating agencies. Brazilian authorities have been in discussion with agencies on this and have said they aim to receive a “shadow rating” for the TFFF before COP30.
As part of the strategy, the fund will also exclude any investments in polluting industries such as coal, oil and gas.
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Who is allowed to receive payments from the TFFF?
According to the fund’s concept note, the 74 countries that are home to rainforests could be eligible to apply for TFFF payments if they meet the required criteria.
To access funds, tropical countries must demonstrate that they are reducing deforestation in a defined area, have a robust forest measurement system and a set of forest policies, and demonstrate that the payments will not replace national resources.
Countries would also have to commit to reserve at least 20% of payments for Indigenous people. While an important step, Guzman said this could be tricky in practice because of the challenges of directly transferring funds to these communities.
“Indigenous communities do not always have formal legal structures or administrative capacity,” she said. “It’s not easy, but it is desirable that communities start building these legal mechanisms.”
Currently not many forest countries meet the minimum requirements to be eligible for TFFF payments.
Online platform TFFF Watch, built by NGO Plant for the Planet, estimates that major countries like the DRC and Indonesia would not qualify for payments due to high deforestation rates, and would be missing on annual deals worth $400 million and $450 million respectively.
On the other hand, Papua New Guinea would be greatly benefitted if the TFFF went into operation exactly as laid out in its concept note, according to TFFF Watch. The country is already eligible for around $120 million in annual rewards, the platform estimates.
As shown by recent wildfires in the Amazon, some countries could end up losing or seeing some of their forests degraded even with robust protections. In these cases, countries would get their payments cut by the same ratio as they lose forests.
Yet once they do access TFFF funding, forest countries will have full authority over how to use the funds.
Brazilian government authorities have sent a letter of intent to the World Bank, which will have to decide by October whether it will host the TFFF. By COP30, Brazil plans to sign a declaration of intent with donor countries.
The post Explainer: Brazil’s “right answer” to forest finance turns to financial markets to keep rainforests standing appeared first on Climate Home News.
https://www.climatechangenews.com/2025/09/23/explainer-brazil-forest-finance-financial-markets-tfff-cop30/
For tech entrepreneur Elon Musk, the answer to the rocketing energy needs of artificial intelligence (AI) data centres is to launch them into space, where they could tap limitless energy from the sun. But until that happens, the places on Earth where these number-crunching mega-hubs are located face big spikes in electricity demand to run them.
In the US, this has sparked fears of higher energy prices for consumers. To allay those concerns, President Donald Trump will reportedly convene big tech firms this week to sign a pledge to provide or pay for the extra energy supplies they will need as their AI data centres expand.
According to the International Energy Agency (IEA), data centres accounted for 1.5% of electricity demand worldwide in 2024 – a share set to rise to about 3% by 2030. Overall, data centre demand is expected to more than double to about 945 terawatt-hours (TWh) by then, which is slightly above the electricity consumption of Japan today.
AI data centres, where AI models are trained and deployed, put far more strain on power supplies than traditional data centres, which each use between 10 and 25 megawatts (MW). In comparison, demand from a “hyperscale” AI centre can exceed 100 MW at any given time, which if running at full capacity could consume as much electricity in a year as 100,000 households.
Data-centre electricity consumption in household electricity consumption equivalents (million households), 2024
We look at where this power might come from and whether, as some warn, AI is going to blow the world’s efforts to transition away from fossil fuels out of the water.
Why does AI need so much electricity?
AI data centres differ in how they use electric power. In a conventional data centre, data requests from businesses, individuals and other users come in a randomised way, translating into a steady load level on the servers, with relatively little fluctuation in demand.
But in an AI data centre, processors need to go through training or learning periods, using so-called “graphical processing units”. These are synchronised, being started up and switched off at the same time. This translates into “power bursts”, which last just a few seconds, but happen very frequently and concurrently, according to Gerhard Salge, chief technology officer at Hitachi Energy.
“That is a different challenge than just providing the power and the energy for the conventional data centres,” he told journalists at the International Renewable Energy Agency assembly in Abu Dhabi earlier this year.
Here, officials and business executives discussed how to meet those demand peaks, noting they cannot be dealt with just by installing huge batteries as those would wear out quickly.
Martin Pibworth, chief executive of SSE, a Scotland-based energy firm, said AI-led demand will put pressure on the power system, but “the problem we all have is no one really knows the pace and trajectory of that demand lift”. In the UK, the government’s Clean Power Plan will be needed to make sure electricity operators can meet demand from AI and other data centres as more come online, he added.
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In the US, meanwhile, the Trump administration is eager to ensure that communities that are home to data centres, as well as the wider public, do not turn against the industry due to its perceived unfairly high use of energy and water.
Ahead of a meeting scheduled on March 4, where US tech titans are due to sign a pledge on powering their own data centres, White House spokesperson Taylor Rogers told CNBC: “Under this bold initiative, these massive companies will build, bring, or buy their own power supply for new AI data centres, ensuring that Americans’ electricity bills will not increase as demand grows.”
Will electricity for data centres and AI come from clean or dirty sources of energy?
The answer to this question is key to how countries tackle climate change, as it will affect their energy mix, how electricity is produced and distributed, and therefore the trajectory of their greenhouse gas emissions. Decisions made by governments and businesses will shape how the AI industry powers the technology on which it relies.
Under pro-fossil fuel Trump, the US has walked away from policy support for clean energy, meaning data centre operators can choose their energy sources freely. In January, data from Global Energy Monitor (GEM) showed the US now has the most gas-fired power capacity in development, surpassing China and accounting for nearly a quarter of the world’s total.
More than one-third of this capacity is set to directly power data centres on-site, in hotspots like Texas, and many more grid-connected gas-fired projects are planned to meet an expected increase in energy demand from AI, GEM said.
On the other hand, some tech companies – especially multinationals – have set goals to cut their emissions to net zero, and so are choosing to power their data centres with renewables, including in the US.
For example, French energy giant TotalEnergies recently signed two long-term Power Purchase Agreements (PPA) to deliver 1 gigawatt (GW) of solar capacity for Google’s data centres in Texas. This followed two other PPAs with Google for 1.2 GW secured by Clearway, a California-based renewables company 50%-owned by TotalEnergies.
Sources of global electricity generation for data centres – base case, 2020-2035
Some countries are also moving to ensure the power needed for AI and the data centre industry is produced using clean energy.
In Ireland, an effective ban on new data centre connections was lifted in December, provided at least 80% of the centres’ annual energy demand is met by new renewable electricity sources. The government also plans to build Green Energy Parks, where data centres can be located alongside renewables plants to avoid straining the national grid.
Salge of Hitachi Energy said that with big investors wanting to drive investment in AI data-crunching so fast, “there is no other power generation technology than variable renewables which you can build in such a timeline” of two to three years. “Anything else will be in the 2030s and later,” he added.
Some governments – such as Sweden’s centre-right coalition – have proposed nuclear as a clean energy solution for AI data centres, saying they could fuel a “renaissance”. But building nuclear power plants requires massive investment and long timelines, while new small-scale modular reactors are not yet commercially available.
How are power systems and regulators coping so far?
In a February report forecasting electricity demand out to 2030, the IEA said AI and data centres are contributing to generation growth in advanced economies, which is now accelerating again after 15 years of stagnation. However, it flagged bottlenecks in connecting new data centres, because grids are not being built or improved fast enough to keep up with rising power demand, forcing big customers to wait.
The report noted that at least 150 GW of queued data centre projects are estimated to be in the advanced stages, while one-fifth of the global data centre build-out is at risk of delay due to grid congestion.
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Planning, permitting and completing new grid infrastructure can take five to 15 years, whereas data centres need one to three years. Prices for key grid components have also nearly doubled over the past five years, the IEA noted.
The European Commission, meanwhile, aims to support those operators that can save on energy use. It plans to adopt a “Data Centre Energy Efficiency Package” in April that will contain an assessment of data submitted under a reporting scheme, introduce a rating scheme for data centres in the EU, and start work on minimum performance standards.
Can AI help to resolve the issue?
Experts say it’s important to look at both sides of the coin, pointing to ways in which AI can contribute to more effective power grid management and integration of renewables into national power supplies.
According to new analysis by energy think-tank Ember, AI applications such as short-term renewables forecasting, predictive maintenance, and real-time monitoring and adjustment of transmission line capacity can deliver operational improvements in power systems.
It estimates that AI could enable Southeast Asian nations, for example, to reduce their power sector costs by $45 billion-$67 billion through to 2035, depending on how much renewable energy they deploy. Potential AI-driven efficiency gains could cut emissions by 290 million to 386 million tonnes of CO2 over the next decade in ASEAN countries, it adds.
“While power-hungry AI might initially stress the power systems, with various powerful applications it has the potential to significantly accelerate the energy transition and offset consumed energy rapidly,” Ember data analyst Lam Pham said in a statement.
The post Explainer: Will AI data centres make or break the energy transition? appeared first on Climate Home News.
Explainer: Will AI data centres make or break the energy transition?
A new investigative report released by Greenpeace Southeast Asia, in collaboration with the Uniting Church in Australia, Synod of Victoria and Tasmania, has uncovered disturbing links between suspected forced labour in the Indonesian tuna fishing industry and seafood sold in Australia.
The investigation analysed testimonies from 25 fishers working on 17 Indonesian tuna fishing vessels that supply the Australian market. These vessels supply five Indonesian processing companies, which in turn export to 18 Australian seafood companies, including major brands seen on our supermarket shelves.
The findings raise urgent questions about human rights protections at sea and the integrity of seafood supply chains reaching Australian supermarket shelves.
What the Investigation Found
Fishers interviewed described experiencing multiple internationally recognised indicators of forced labour.
Of the 11 forced labour indicators identified by the International Labour Organisation, the most frequently reported were:
- Abuse of vulnerability (56%)
- Debt bondage (56%)
- Deception (40%)
The report reveals a multi-layered recruitment network in Indonesia that channels vulnerable workers from rural areas into exploitative situations. Labour brokers, known locally as calo, collaborate with vessel administrators and manage recruitment. Fishers reported being lured with promises of high salaries and advance loans, only to be charged illegal and inflated fees for travel, training and documentation.
The investigation also found that labour exploitation at sea is intertwined with environmental crime. Companies allegedly pushed vessels and fishers to engage in illegal, unreported and unregulated fishing practices, including shark finning and the deployment of illegal fish aggregating devices.
The link between labour abuse and environmental destruction is not accidental. It reflects an extractive system that externalises both human and ecological costs to sustain profit margins.
Industrial fishing not only exploits vulnerable workers and undermines human rights, it also strips life from our oceans, degrading fragile ecosystems and pushing marine wildlife toward collapse.
What Needs to Happen Now
The report calls for urgent action from both governments and industry.
The Indonesian Government must:
- Enforce decent and effective work at sea policies aligned with international standards.
- Ensure ethical recruitment practices.
- Guarantee fair wages and protections for Indonesian fishers.
The Australian Government must:
- Prohibit seafood products linked to labour exploitation and forced labour from entering Australian markets.
Seafood companies in both countries must:
- Conduct robust human rights and environmental due diligence across their supply chains.
These are not abstract policy fixes. They are necessary steps to prevent modern slavery at sea and to stop environmental crime from being embedded in global seafood trade.
Environmental Justice and Ocean Protection Go Hand in Hand
This investigation highlights something fundamental. Human rights and ocean protection are inseparable.
Environmental justice means the fair treatment and meaningful involvement of everyone in creating a healthy environment. When workers are exploited and forced into dangerous conditions, environmental laws are often ignored too. Abuse at sea and ocean destruction are two sides of the same industrial system.
Destructive industrial fishing methods such as longlining and bottom trawling continue to pillage and industrialise the ocean. They kill wildlife, destroy fragile habitats and undermine the resilience of marine ecosystems.
If we want a thriving ocean, we must protect both the people who work on them and the ecosystems themselves.
Why This Matters for Australia and the Global Ocean Treaty
The Australian Government is on the cusp of ratifying the Global Ocean Treaty, the legal instrument allowing governments to create high seas ocean sanctuaries free from industrial fishing. Once Australia has ratified, it has the critical tool it needs to protect the ocean and safeguard beautiful and endangered species like whales, dolphins and sharks from destructive fishing methods in the high seas.
Vast, robust ocean sanctuaries are a crucial solution to the ocean crisis. These high seas sanctuaries will provide a blue haven where wildlife can rest, recover and thrive. Greenpeace Australia Pacific is calling on the Australian government to champion multiple high sea ocean sanctuaries in our region, starting with a first generation ocean sanctuary in the South Tasman Sea between Australia and Aotearoa, free from industrial fishing, whaling and the threat of deep sea mining.
As this investigation shows, the stakes are not only environmental, they are deeply human.
Australia has an opportunity to lead by cleaning up seafood supply chains at home and by championing ambitious ocean protection globally by creating fully protected ocean sanctuaries. Protecting workers’ rights and protecting ocean wildlife must happen together.
https://www.greenpeace.org.au/article/new-investigation-reveals-forced-labour-tied-to-tuna-sold-in-australia/
Our colleagues at Greenpeace Southeast Asia, in collaboration with the Uniting Church in Australia, Synod of Victoria and Tasmania, launched a new investigative report, “Forced to the Bottom: Squeezing Indonesian Fishers and Oceans for Tuna Dirty Profits.” The report draws on testimonies from 25 fishers working on 17 Indonesian tuna vessels supplying the Australian market, documenting indicators of forced labour including abuse of vulnerability (56%), debt bondage (56%) and deception (40%). It also traces supply chain links to tuna sold here in Australian supermarkets.
Crucially, the investigation highlights that labour exploitation at sea is intertwined with illegal and destructive fishing practices, underscoring that human rights abuses and environmental degradation are part of the same extractive system. Industrial fishing not only undermines workers’ rights, it drives biodiversity loss and ecosystem damage. Vast, robust ocean sanctuaries are a crucial solution to the ocean crisis. These high seas sanctuaries will provide a blue haven where wildlife can rest, recover and thrive free from the hooks of industrial fishing. If Australia is serious about ocean leadership, it must ensure seafood linked to forced labour does not enter our markets and require robust human rights and environmental due diligence across supply chains. Protecting workers and protecting the ocean go hand in hand.
REPORT: Forced To The Bottom – Squeezing Indonesian Fishers and Oceans For Dirty Tuna Profits
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