The UN’S Green Climate Fund Must Stop Financing False Solutions

Public Finance Continues to De-Risk Private Sector Investments in False Climate Change Solutions

The &Green Fund has been fully operational since 2017 and currently has a portfolio of seven ongoing projects, mainly consisting of intensive cattle farming and monocultures. The funding proposal submitted to the GCF basically consisted of a request for public finance to de-risk private sector investments in “deforestation-free and socially inclusive commodity supply chains”—in other words, for monoculture plantations of oil palm, cocoa, and rubber, and unsustainable industrial cattle farming. The &Green portfolio includes agribusiness such as the multinational food processing company Marfrig from Brazil, which has been accused of repeatedly being involved in illegal tree cutting, “cattle laundering,” and extensive palm oil monoculture tree plantations in Indonesia.

The funding proposal had many other concerning aspects such as a very complex financing structure, overly optimistic claims of CO2 reduction, and the fact that their projects could include GMO seeds. It demands public climate finance to support agribusinesses that already have access to large amounts of finance. If this funding proposal is approved, we will very likely see some of the same impacts and mistakes that are being reported in the sub-projects part of the Arbaro Fund.

History Repeats: More Eucalyptus, Fewer Food Crops, Rising Unemployment

The Arbaro Fund proposal approved by the GCF in 2020 led to the establishment of 75,000 hectares of new tree plantations across seven target countries in Latin America and sub-Saharan Africa. Since its creation, the Arbaro Fund has been critiqued by more than 100 civil society organizations due to the negative social, environmental, and economic impacts of extensive monoculture tree plantations for industrial purposes. These include the displacement of local communities from their traditional land and livelihoods, increasing insecurity in land tenure, a disruption in the local peasant economy, the worsening of economic difficulties, rising divisions within the communities, and the further erosion of the rights and agency of women in all their diversities.

These impacts have been documented in studies and reports by the World Rainforest Movement, the Global Forest Coalition, and Centro de Estudios Heñói. More recently, an investigation led by Lighthouse Reports showed how European development finance institutions, including the FMO, where the Dutch state is the bank's largest shareholder, fund forestry businesses that use agrochemicals that are banned by the European Union itself.

As the studies show, the territorialization of agribusiness and, in recent years, of eucalyptus plantations, has led to the large-scale displacement of communitie

False promises of development and mitigation of climate change and the expansion of industrial monoculture tree plantations have been a common pattern in the countries where Arbaro operates. The Centro de Estudios Heñói has highlighted the tendency of the forestry industry to reproduce the predominant agro-export model in Paraguay. Quite contrary to the declarations of good intentions and the greenwashed claims of carbon capture and greenhouse gas reduction, these eucalyptus trees end up as charcoal to dry soybeans, corn, wheat, and others.

As the studies show, the territorialization of agribusiness and, in recent years, of eucalyptus plantations, has led to the large-scale displacement of communities. The inhabitants also experience biodiversity loss, as animals, food crops, water, and soil are affected. There are cases of overt and potential land conflicts with the companies (in Santaní, area of influence of Forestal Apepú, a timber production business fully owned by Arbaro) and other historical cases such as the case of Barbero Kue (area of influence of Forestal San Pedro). Contrary to the companies’ claims about their social commitment to the communities, the inhabitants report that they do not receive any type of assistance. Most jobs are temporary and dangerous and disassociate the workers from their peasant culture.

“Nothing Grows Here Anymore, No Beans, Cassava, Corn, Nothing.”

In June 2023, Heñói Centro de Estudios conducted field visits to communities near Apepú Forestry. The villagers told Heñói that they were economically impoverished and that the rural youth are being forced to relocate to other regions for work. They also noted that there were threats looming over the Indigenous Peoples and the local communities, owing to the interests of big businesses and large-scale landowners. They stated that they have been dispossessed of their lands, and were going to starve in the cities.

A farmer stated: "The eucalyptus plantations have ruined the water and the soil. Nothing grows here anymore, no beans, cassava, corn, nothing. Before the eucalyptus, our corn was big and beautiful, and we had bountiful harvests. We have lost everything, even after all the sacrifices we have made.”

The weakening food security in the region also impacts the culinary culture of the region. Villagers reported that it is no longer possible to make Vorí vorí, Paraguay soup, or chipa guasú. Food is fundamental to primary socialization, and the communal binding of the peasantry is being lost.

"Though we are the ones who produce food for everyone, farmers are not prioritized by the state or by the companies."

The peasants receive no assistance from the state. "Though we are the ones who produce food for everyone, farmers are not prioritized by the state or by the companies. If food production ends, what will happen to all of us? They do not value us," said another peasant farmer. The local community has been discussing the importance of working together to find a resolution and to demand technical assistance for small producers.

To honor the pledge and recognize the Paris Agreement benchmark of 1.5°C, climate finance must be redirected away from greenwashing and towards real solutions—just transition, climate resilience of frontline communities, conservation, protection of land and forests, and reforestation—and provide direct funding access to Indigenous Peoples, women from frontlines communities, and local communities. Their land rights must be secured, as must their rights to resources, their territories, and their right to govern. Real solutions that are rights-based and gender-just do exist, and they are the only way to prevent catastrophic global climate change.