Here is how it would work: Rich nations and big philanthropies would loan the fund $US25 billion, to be repaid with interest. Getting that capital is the hardest part, the fund’s backers say. That money would then help attract another $US100 billion from private investors. Those investors would be paid a fixed rate of return, just as if they had invested in something with slightly higher projected returns than Treasury bonds.

The TFFF would then reinvest the $US125 billion in a diversified portfolio that could generate enough returns to repay investors. The excess returns would be used to pay roughly 70 developing countries based on how much tropical forest they still have standing.

The design allows the TFFF to essentially create its own grants for forest protection. While that design is unique, the financial mechanism behind it – getting deposits and reinvesting them for a profit – is common. It’s basically how banks work.

“The idea is elegant,” said Frances Seymour, a senior adviser on forests for the US State Department. “It’s exciting that it seems to have some political momentum.”

Brazil aims to finalise the fund’s design by the end of the year, including how it would be governed, and roll it out next year. Brazilian officials are trying to capitalise on the country’s role as host of the UN climate summit in 2025 and its turn this year at the presidency of the Group of 20, to beef up support for the TFFF.

The idea has caught the attention of leaders in United States, Norway, and France, as well as the World Bank, which is helping to develop the project. In a meeting about the TFFF in Rio de Janeiro in July, the bank’s president, Ajay Banga, said that his team had “been encouraged by the work that has gone into this idea.”

But, at this early stage in the process, no countries or philanthropies have yet announced that they will put money in the fund.

The proposal’s ambition has stirred some scepticism about its viability. Getting rich nations to commit $US25 billion in loans and investments may be easier than getting that sum in traditional grants. Still, it could be enormously challenging. In the United States, for example, it would require approval by a Congress that is divided.

The fund’s goal is to pay countries with low deforestation rates $US4 for each hectare of standing forest that can be identified by satellite images every year. Those forests can be old-growth or restored, not plantations.

The fund’s proponents say it is priced at the absolute minimum to help countries stop deforestation from mining in Indonesia, the growth of cocoa crops in Ghana, the expanding ranches in Colombia and myriad other moneymaking drivers of environmental destruction.

Countries that receive TFFF funds would also be penalised $US400 for each hectare of forest they lost in a given year. The penalty is roughly the same annual revenue that a hectare of land used in a soybean farm in the Amazon would bring in, which is one of the most profitable uses of deforested land in developing countries.

If a country’s deforestation rate becomes too high, the TFFF payments would stop. There’s also the risk of exposing forest protection funds to the swings of financial markets, which could disrupt the fund’s payments to countries.

Still, experts say the impact of a reliable stream of forest protection funds that countries can plan their yearly budgets around could be enormous.

Take Brazil, one of the wealthiest of the forest countries in the developing world. If the fund was already operating, the country would have received some $600 million this year from its existing forests, minus what it lost. That’s almost double the yearly budget of the country’s Environment Ministry.

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“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.

But with the fund disbursing real cash for standing trees, she said, politicians who now fight environmental protection policies at every turn may start “counting each hectare of preserved forest and thanking each Indigenous person inside their state”.

How the money gets spent may become a source of tension as the fund’s design is finalised. On the one hand, Seymour said, recipients need some freedom to spend the money without burdensome controls and reporting requirements.

On the other hand, the fund needs to ensure it is actually helping forests and reaching the communities that protect them. “Reasonable people can disagree on what the right balance is,” she said.

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This article originally appeared in The New York Times.