Six major conservation and environmental organisations have formed a coalition to scale funding for global climate and nature goals through sovereign debt conversions.
The Coalition, between Conservation International, The Nature Conservancy, The Pew Charitable Trusts, Re:wild, The Wildlife Conservation Society, and World Wildlife Fund in the US, will “develop a shared pipeline of potential projects, contribute to the development of first-ever practice standards for sovereign debt conversions for nature and climate, coordinate policy efforts, [and] share best practices.”
A sovereign debt conversion involves a country and its creditors agreeing to wipe a portion of the nation’s debt in exchange for receiving tangible, traceable outcomes on things like infrastructure projects. Through this process, a country can reduce its overall debt burden while providing resources for economic development.
Conservation International, one of the six NGOs forming The Coalition, pioneered so-called ‘debt-for-nature’ swaps in the late 1980s. Its CEO, Dr. M. Sanjayan, says the tool is “foundational… for protecting and restoring nature.”
The International Institute for Environment and Development estimates that more than US$100 billion of debt in developing countries could be freed up to spend on restoring nature and adapting to climate change.
The approach is particularly important for low-income nations which have great potential for growth in renewable energy production and conservation but, at the same time, are often the most vulnerable to climate change and at risk of debt distress.
