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TWN
Info Service on Biodiversity and Traditional Knowledge (Feb23/01) Debt for environment swaps We wish to share with you a Briefing Paper, ‘Debt for Environment Swaps’, published by the Climate and Community Project. It is part of a Memo Series on Environmental Finance in the Debt and Ecological Crises, which is a series of briefings looking at financial mechanisms that (in theory) support climate action and biodiversity conservation in the midst of a new debt crisis. Debt swaps aim to alleviate these pressures by offering some level of debt relief in return for commitments to devote freed up financial resources toward achieving environmental objectives such as biodiversity conservation or climate change adaptation. However, debt swaps are part of an ideological approach to financing environmental action that rests on the belief that public resources are nearly exhausted, so any remaining public funds are most effectively spent to leverage private investment to achieve public priorities. There are numerous drawbacks and limitations associated with these arrangements, which the Briefing Paper elaborates on, concluding that they cannot be the primary mechanism that creates definitive, just resolutions to the mutiple crises facing developing countries. The swaps are also crucially not a substitute for a new, comprehensive global debt architecture or increased direct funding for environmental priorities flowing form North to South. “Swaps, cannot… be a substitute for massively scaled up, non-debt environmental funding from North to South, nor replace structural reform to the global debt architecture that is crushing Southern economies and their financial capacity for achieving sovereign social and environmental priorities to contend with crises, like climate change and mass extinction, for which they bear little responsibility.” With
best wishes,
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