Debt-for-nature swap

debt-for-nature-swapdebt-for-nature swapsdebt-for-nature' schemes
Debt-for-nature swaps are financial transactions in which a portion of a developing nation's foreign debt is forgiven in exchange for local investments in environmental conservation measures.wikipedia
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World Wide Fund for Nature

WWFWorld Wildlife FundWorld Wide Fund for Nature (WWF)
The debt-for-nature swaps concept was first conceived by Thomas Lovejoy of the World Wildlife Fund in 1984 as an opportunity to deal with the problems of developing-nation indebtedness and its consequent deleterious effect on the environment. Since e late 1980s, organizations such as Conservation International, The Nature Conservancy, and the World Wildlife Fund have participated in international debt-for-nature swaps.
In addition, WWF has launched several notable worldwide campaigns including Earth Hour and Debt-for-Nature Swap, and its current work is organized around these six areas: food, climate, freshwater, wildlife, forests, and oceans.

Thomas Lovejoy

Dr. Thomas E. LovejoyThomas E. Lovejoy
The debt-for-nature swaps concept was first conceived by Thomas Lovejoy of the World Wildlife Fund in 1984 as an opportunity to deal with the problems of developing-nation indebtedness and its consequent deleterious effect on the environment.
Thomas Lovejoy developed the debt-for-nature swaps, in which environmental groups purchase shaky foreign debt on the secondary market at the market rate, which is considerably discounted, and then convert this debt at its face value into the local currency to purchase biologically sensitive tracts of land in the debtor nation for purposes of environmental protection.

Leonardo DiCaprio

DiCaprioLeonardo DiCaprio FoundationAppian Way Productions
Nature Conservancy, Leonardo DiCaprio Foundation, Oak Foundation and Global Environment Facility have previously provided funds to pay to the debts.
It has worked on projects in over 40 countries and has produced two short web documentaries, Water Planet and Global Warning. The foundation has also funded debt-for-nature swaps.

Global Environment Facility

GEFGlobal Environment Facility (GEF)The Global Environment Facility (GEF)
Nature Conservancy, Leonardo DiCaprio Foundation, Oak Foundation and Global Environment Facility have previously provided funds to pay to the debts.
Debt-for-nature swaps

Developing country

developing countriesdeveloping worlddeveloping nations
Debt-for-nature swaps are financial transactions in which a portion of a developing nation's foreign debt is forgiven in exchange for local investments in environmental conservation measures.

Latin American debt crisis

debt crisisforeign debt interest paymentsLatin America
In the wake of the Latin American debt crisis that resulted in steep reductions to the environmental conservation ability of highly indebted nations, Lovejoy suggested that ameliorating debt promoting conservation could be done at the same time.

Conservation International

CI
Since the first swap occurred between Conservation International and Bolivia in 1987, many national governments and conservation organizations have engaged in debt-for-nature swaps. Since e late 1980s, organizations such as Conservation International, The Nature Conservancy, and the World Wildlife Fund have participated in international debt-for-nature swaps.

Biodiversity

diversitybiological diversitybiodiverse
Most swaps occur in tropical countries, which contain many diverse species of flora and fauna.

Deforestation

deforestedland clearingforest clearing
Also, countries that have engaged in debt-for-nature swaps typically have several threatened or endangered species, experience rapid deforestation, and have relatively stable, often democratic, political systems.

Face value

face amountvalue of legal tender
In these circumstances, the funder can purchase the debt at well below its face value.

Non-governmental organization

NGOnon-governmental organisationNGOs
In a commercial debt-for-nature swap or three-party debt-for-nature swap, a non-governmental organization (NGO) acts as the funder/donor and purchases debt titles from commercial banks on the secondary market.

Secondary market

after-marketaftermarketsecondary trading
In a commercial debt-for-nature swap or three-party debt-for-nature swap, a non-governmental organization (NGO) acts as the funder/donor and purchases debt titles from commercial banks on the secondary market.

The Nature Conservancy

Nature ConservancyTNCconservancy
Nature Conservancy, Leonardo DiCaprio Foundation, Oak Foundation and Global Environment Facility have previously provided funds to pay to the debts. Since e late 1980s, organizations such as Conservation International, The Nature Conservancy, and the World Wildlife Fund have participated in international debt-for-nature swaps.

Ecosystem services

ecosystem serviceenvironmental servicesecological services
maintaining ecosystem services

Debt restructuring

debt-to-equity swapdebt-for-equity swapdebt-for-equity
In contrast to debt-for-equity swaps, debt-for-nature swaps do not compromise national sovereignty since no property exchange takes place.

Welfare economics

welfareconsumer welfareeconomic welfare
Also, if the indebted country does not engage in conservation in the absence of a debt-for-nature agreement, the swap may not provide the indebted country a social welfare improvement or any fiscal space in the national budget.

Fiscal space

Also, if the indebted country does not engage in conservation in the absence of a debt-for-nature agreement, the swap may not provide the indebted country a social welfare improvement or any fiscal space in the national budget.

Environmental degradation

environmental damagedegradationenvironmental impact
Though debt shows a positive correlation with deforestation levels, most researchers believe that highly indebted countries lack political institutions and enforcement structures that would limit environmental degradation.

Washington Consensus

macroeconomic adjustmentneoliberal agendaneoliberal policy
Some suggest that the solutions to environmental degradation are effective political institutions, democracy, property rights, and market structures, and this development theory matches many of the principles of the Washington Consensus.

Kuznets curve

environmental Kuznets curveEconomic Growth and Income Inequality
This approach considers an environmental Kuznets curve, by which environmental degradation increases, reaches a tipping point, then decreases as income or wealth increases.

Glossary of environmental science

debt-for-Nature Swap - a financial transaction in which a portion of a developing nation's foreign debt is forgiven in exchange for local investments in conservation measures.

Russell E. Train

Russell TrainTrain, Russell
Through these debt-for-nature swaps, WWF started to convert portions of national debts into funding for conservation, beginning in the mid-eighties.