- Open Cage
- Debt-for-nature swaps are agreements whereby a portion of a developing nation’s foreign debt is forgiven in exchange for local investments in environmental conservation measures. Pictured: a Yellow Spotted River Turtle in Bolivia's Beni Biosphere Reserve, the location of the very first debt-for-nature swap, brokered by the non-profit Conservation International in 1987.
Courtesy of: EarthTalk®
E — The Environmental Magazine
Dear EarthTalk: As I understand it, “Debt-for-Nature Swaps” are arrangements by which countries can erase debt by preserving land. Are any being done today? — Bill Hunt, Topeka, KS
The debt-for-nature swap concept, whereby a portion of a developing nation’s foreign debt is forgiven in exchange for local investments in environmental conservation measures, dates back to the mid-1980s when Thomas Lovejoy of the non-profit World Wildlife Fund (WWF) first proposed it as a way to deal with the problems of developing nations’ indebtedness and the negative consequences for their natural resources and diverse environments.
The theory goes that if a country with, say, valuable tropical rainforests, is up to its ears in debt, it will sell off or otherwise deplete those natural resources, instead of protecting or conserving them, in order to raise the money needed to pay off its debts. Debt-for-nature swaps can therefore be useful financial mechanisms for helping countries reduce debt without destroying their most valuable natural resources.