A recent report by the International Institute for Environment and Development (IIED), a UK-based non-profit organization, suggests that debt-for-nature swaps could potentially yield $100 billion to combat climate change.
These swaps involve poorer nations having their debts forgiven in exchange for safeguarding vital ecosystems like barrier reefs or rainforests.
The estimate is based on the potential for such swaps in numerous of the 49 least developed countries, particularly susceptible to debt crises.
Countries like Belize, Ecuador, Barbados, Gabon, and Cabo Verde have engaged in such swaps in recent years.
Also read: IMF advises Pacific Islands to explore debt-for-nature deals
Laura Kelly, the director of IIED’s sustainable markets research group, noted that many nations grappling with debt distress and concurrently facing significant threats from global warming are considering similar measures.
The analysis, relying on data from the IMF and World Bank, reveals that the countries in question collectively owe $431 billion, primarily to wealthier governments, the IMF, pension funds, and hedge funds.
“For governments (that do debt swaps) it creates some fiscal space, but also it helps to achieve outcomes in terms of climate and nature that have global impact,” Kelly said, adding that many countries were interested in potentially doing them.
