Brazil launches forestry investment fund

The Brazilian government has launched a new international investment fund designed to help tackle deforestation in the Amazon rainforest.

Officials said the fund, which will be managed by Brazil's National Development Bank, will aim to raise up to £10.5bn by 2021 from international governments and businesses. The money is expected to be invested in projects that promote alternatives to deforestation for Amazonian communities and improve protection for nature reserves.

Speaking at the launch of the fund, Brazilian president Luiz Inacio Lula da Silva said that the fund underlined the country's commitment to protect the Amazon and help tackle global warming.

The move was welcomed by environmentalists who hailed it as the first time the Brazilian government has explicitly linked deforestation with climate change.

However, there was also evidence of the tensions currently afflicting international negotiations designed to help curb emissions from deforestation, with Silva insisting that while foreign governments would be asked to donate to the fund Brazil would retain complete autonomy over how it is invested.

How to better protect the world's forests has emerged as one of the key sticking points in ongoing international climate change negotiations. Following the UN's Bali conference, it was agreed there would be a greater focus on curbing emissions from deforestation, with supporters of forestry protection arguing that with land use accounting for around a fifth of global emissions, reducing deforestation represents one of the most cost-effective means of reducing emissions.

However, finalising a framework for protecting the world's largest rainforests has proved difficult, with some western negotiators claiming they should not be obliged to pay to help governments tackle illegal logging activity that they should already be addressing.

Responding to perceived criticism from western governments over deforestation, Silva said that other countries "talk as if they own the Amazon, but we know what it represents to humanity and to Brazil".

Minister for strategic affairs, Roberto Mangabeira Unger, said: "The fund is a vehicle by which foreign governments can help support our initiatives without exerting any influence over our national policy. We are not going to trade sovereignty for money."

Details on how the new fund will generate returns for investors also remain sketchy and are likely to hinge on the success of international talks designed to integrate forestry projects into international carbon trading schemes. While the sale of carbon credits against protected areas of forestry has secured significant support at international level, concerns remain over how such an initiative could be administered.