An independent economic stress test of the Tropical Forest Forever Facility, the $125bn mechanism 53 governments, NGOs and private institutions signed up to before COP30.
The finding
The Tropical Forest Forever Facility promised billions in annual forest payments at no net public cost, funded out of investment returns rather than development budgets. Whether the promise held was something nobody had independently costed.
Aidan Hollis, Head of the Department of Economics at the University of Calgary, and I did the arithmetic. The design mistakes a risk premium on liquid emerging-market sovereign debt for dependable long-term yield. We did not stop at the criticism: we costed a simpler structure that funds itself.
The book · first two chapters, published 23 September 2026
Missing Billions: The Tropical Forest Forever Facility and the Urgent Quest to Protect Our World, by Aidan Hollis and Max Matthey, is in draft. Part II, on how much the financial machine would actually deliver, is published here as working drafts, free, so that the argument can be tested before sponsor money moves. Corrections to the address below.
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Chapter 8 · The Financial Reality
The Concept Note's arithmetic tested against what emerging-market debt has actually paid since 2000, and the fund run day by day through the markets of 2000 to 2026 from nineteen launch years. It delivers 39 to 56% of the payments it promises, and the sponsors' $25bn is gone in eleven of nineteen runs. PDF, 21 pages.
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Chapter 9 · When Public Institutions Bet on Spreads
Detroit, Orange County, Norway's Terra municipalities, Sachsen LB and Long-Term Capital Management: what happened to the public bodies that funded a permanent obligation out of the difference between their cheap credit and a higher market return. PDF, 21 pages.
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Chapter outline
Fourteen chapters in four parts. Titles and structure are provisional.
Cite as: Hollis, A. and Matthey, M. (2026), Missing Billions, working draft, chapters 8 and 9, September 2026, missingbillions.org.
The load-bearing number
The facility's own build-up requires a portfolio “generating between 247 bps and 325 bps of gross spread over UST”. That is its floor and its ceiling, computed on its own figures.
Required spread
247–325bp
The facility's own build-up, Concept Note pp. 40–41.
Spread available
244bp
EMBI, end of July 2026, against a ten-year average of 372bp.
The mechanism needs more spread than the index it is modelled on has lately been paying, and the index itself has drifted up to investment grade on average. To earn the assumed 350bp the fund would have to hold worse credit than the index, which is the band where realised default losses eat the excess return.
Where it stands · September 2026
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Capital
About $7.3bn of sponsor capital is pledged against a $25bn core target, and $10bn is the threshold Norway has set for the end of this year.
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Norway
NOK 30bn, roughly $3bn, is pledged in principle and unauthorised. All four opposition parties oppose granting the lending authority, and the ministry will sign nothing binding before parliament has approved an appropriation.
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Germany
€1bn is announced subject to budgetary and parliamentary reservation, with a Bundestag vote due in late November 2026. The federal government has stated twice on the record that it is considering no commitment beyond it.
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Design
The financing model is still being built. Concept Note 3.1 dropped the AAA target and deleted the forest-country rows of Table 6.
Who reached the same conclusion
BloombergNEF, working independently, arrived at the same result. So did Bård Harstad of Stanford, writing in Project Syndicate that there is no free lunch, and Arild Angelsen of the Norwegian University of Life Sciences.
The work
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The stress test
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First peer-reviewed citation
Richard Fischer, “Is the Tropical Forests Forever Facility really results-based?”, Forest Policy and Economics 190 (2026) 103876. doi:10.1016/j.forpol.2026.103876
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Missing Billions, the newsletter
The analysis continues for around 750 readers, most of them in universities, ministries, foundations and newsrooms. Read and subscribe on LinkedIn.
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Missing Billions, the book
The critique at book length, in draft. Chapters 8 and 9 are published above as working drafts.
Selected coverage
- 2026-05-29NettavisennoStøre lover 30 milliarder til nytt regnskogfond: «Gambling»
- 2026-05-25REDD-MonitorenTomorrow's TFFF meeting is shrouded in secrecy
- 2025-11-24MongabayenBrazil's forest fund faces a slow takeoff at COP30 despite initial support
- 2025-11-19UOLptAlemanha achou arriscado investir em fundo de florestas de Lula
- 2025-11-18HandelsblattdeCOP30: Riskante Finanzmodelle zum Schutz des weltweiten Regenwalds
- 2025-11-05DIE ZEITdeRegenwaldfonds: Die wundersame Geldvermehrung von Belém
- 2025-11-05Carbon BriefenCOP30: Could Brazil's Tropical Forest Forever fund help tackle climate change?
- 2025-10-29Financial TimesenHard questions loom at COP30 summit
- 2025-10-28Süddeutsche ZeitungdeWie Lula da Silva den Regenwald retten will
- 2025-10-14TagesspiegeldeInterview on the facility's finance model
- 2025-10-09Global WitnessenBanking on forests: inside private-sector plans to shape the TFFF
- 2025-09-23Climate Home NewsenCoverage of the return assumptions
The analysis carries weight because nobody commissioned it and it belongs to no house whose portfolio might come up for review. No commissioned research, no say over the result, and whatever comes out gets published.
Contact
Max Alexander Matthey is a political economist in Berlin, defending his doctorate in December 2026.