I'm pretty skeptical about this one. Seems far too small scale and susceptible to market fluctuations.

Summary:

The problem: Every year over the last two decades, countries have been losing about nine million acres of tropical forest that are crucial to curbing climate change. Markets for selling carbon credits and other financial mechanisms have not significantly changed that trend globally.

The fix: Officials from Brazil are finalizing a proposal for a new financial product called the Tropical Forests Forever Facility, which aims to raise $125 billion from investors, countries and philanthropic organizations.

Its structure is unique: investors would loan the fund money, which would be paid back with interest. That money would then be invested in a diversified portfolio that would generate a return. Those excess returns would be used to pay roughly 70 developing countries $4 for every hectare of tropic forest they protect — including for forests that are not under immediate threat and which have historically received very little funding.

The structure means T.F.F.F. is more like a return-generating investment than traditional foreign aid, which the fund’s creators think could help make it more palatable for countries and philanthropies.

“We have long talked about the advantages of conservation, but haven’t been able to, let’s say, translate that into concrete things people can feel,” said Marina Silva, Brazil’s environment minister.

The obstacles: Getting $125 billion in investments is an enormous challenge to say the least. If the T.F.F.F. were to raise $125 billion it would be, by some measures, the biggest climate fund in the world. There are also concerns about who would — or could — govern such a large financial portfolio. And then there’s the risk of a financial crash, which could hurt the fund’s abilities to pay countries for forest protection.

What’s next: Officials in the U.S., Norway, France and other wealthy nations are evaluating the idea, as is the World Bank. The project, first presented at the global climate summit in Dubai, last November, is now in its final stages of design.

Under the plan’s terms, countries with a lot of forest could get a significant boost in their budgets. Brazil, for example, would have been paid around $600 million this year if the fund was operational. — Manuela Andreoni