French President Emmanuel Macron’s Summit for a New Global Financing Pact, to be held in Paris this week, is a historic opportunity to deliver deep financial reforms that support development and bolster the fight against climate change. But the summit’s focus – climate, development, and debt – appears to be missing something: nature.
Unprecedented biodiversity loss and environmental degradation pose an existential risk to all life on Earth, owing to the depletion of natural resources (including water), disruptions to soil formation and thus food production, longer recovery times from natural disasters, and, potentially, climate and resource conflicts. According to the World Economic Forum, the climate and the environment account for six of the top ten global risks in the decade ahead.
Developing countries did not generate these risks, but they are paying the price: they must fund interventions to help mitigate the climate and biodiversity crises, while also paying to address the loss and damage associated with these interwoven crises.
Yet these countries are already stretched to their fiscal limits, not least because advanced-economy interest-rate hikes and risk-repricing have driven up debt-servicing costs. As a result, they often lack access to affordable finance.
Efforts to address this systemic problem are underway. A notable example is Barbadian Prime Minister Mia Amor Mottley’s Bridgetown Initiative, which aims to create more fiscal space for development, climate mitigation and adaptation, and loss and damage. But more must be done. In fact, the global financial system must be entirely reimagined.
Most immediately, the upcoming summit in Paris must produce a credible reform plan that aligns with the needs of nature. At the same time, multilateral development banks must place nature at the center of their operations. The Global Biodiversity Framework agreed at last December’s United Nations Biodiversity Conference in Montreal, requires them to ensure that their portfolios are both nature-positive and aligned with the 2015 Paris climate agreement.
Special attention should be paid to scaling up proven solutions, such as debt-for-nature swaps. Such swaps – in particular, the “blue bonds” pioneered by The Nature Conservancy – enable a country to refinance its debt under more favorable terms, and allocate the proceeds toward biodiversity protection and climate adaptation. The result is higher spending on conservation or green investment, and a smaller – or, at least, not a larger – debt burden.
In 2021, a $364 million debt-conversion deal with The Nature Conservancy enabled Belize to reduce its debt by about 12% of GDP, while unlocking an estimated $180 million in long-term sustainable conservation funding over 20 years. The agreement also included a commitment from Belize to protect 30% of its maritime territory.
Last year, a similar agreement – involving The Nature Conservancy and the Inter-American Development Bank – enabled the Barbadian government to convert $150 million worth of debt, again in exchange for a commitment to conserve approximately 30% of its maritime territory. And under the world’s largest debt-for-nature deal, reached last month, Ecuador is converting $1.6 billion in debt into $12 million per year for the conservation of the Galapagos Islands.
Debt-for-nature swaps are no panacea; they do not eliminate the need for grants, concessionary financing and other loans, or private investment. Donor pledges still must be fulfilled: rich countries have yet to meet their 2009 commitment to deliver $100 billion per year in climate finance to developing countries by 2020.
Rich countries have also failed to mobilize adequate private investment. Scaling up credit enhancement, for example through third-party guarantees, would lower the investment risk (and thus debt issuers’ borrowing costs), which would simultaneously enable countries to reduce their debt burdens and help to crowd in private financing for climate and nature investments.
Nonetheless, debt-for-nature swaps can go a long way toward helping low- and middle-income countries address the triple challenge of high debts, climate change, and biodiversity loss. Recognizing this, both the Sustainable Debt Coalition, which was created and endorsed by African finance ministers at last year’s UN Climate Change Conference (COP27), and the V20 group of climate-vulnerable countries have called for greater use of these and other innovative tools.
The good news is that the institutional architecture needed to pursue debt-for-nature swaps at scale and with more actors is already largely in place. What is needed now is shareholder will and executive action to boost development-finance institutions’ capacity to provide guarantees for sovereign-debt issuance linked to climate and nature investments.
The Paris summit can kick-start progress by aligning international financial institutions on mechanisms to guarantee debt conversions, and by presenting a package of reforms aimed at increasing such conversions’ effectiveness and efficiency before the UN Climate Change Conference (COP28), which begins on November 30. Financial reforms that do not account for nature will prove unsustainable in the long run.
Debt-for-nature swaps are no longer just a viable economic option; they are now a lifeline for our planet. But if we do not reach for that lifeline now, it may soon be beyond our grasp.
Mkutano wa Rais wa Ufaransa Emmanuel Macron wa Mkataba Mpya wa Fedha Ulimwenguni, ambao utafanyika Paris wiki hii, ni fursa ya kihistoria ya kutoa mageuzi ya kina ya kifedha ambayo yanaunga mkono maendeleo na kuimarisha mapambano dhidi ya mabadiliko ya hali ya hewa. Lakini lengo la mkutano huo - hali ya hewa, maendeleo, na deni - linaonekana kukosa kitu fulani: asili. Kupoteza kwa aina mbalimbali za viumbe na uharibifu wa mazingira unaoonekana hapo awali ni hatari kwa uhai wa viumbe wote duniani, kutokana na kupungua kwa rasilimali za asili (ikiwa ni pamoja na maji), kuvuruga kwa malezi ya udongo na hivyo uzalishaji wa chakula, muda mrefu wa kupona kutokana na misiba ya asili, na uwezekano wa migogoro ya hali ya hewa na rasilimali. Kulingana na Jukwaa la Uchumi la Dunia, hali ya hewa na mazingira ni sababu ya hatari sita kati ya kumi kuu za kimataifa katika muongo ujao. Nchi zinazoendelea hazikuzalisha hatari hizi, lakini zinalipa bei: lazima zifadhili hatua za kusaidia kupunguza mgogoro wa hali ya hewa na utofauti wa kibiolojia, wakati pia zinalipa kukabiliana na hasara na uharibifu unaohusiana na mgogoro huu uliounganishwa. Hata hivyo, nchi hizo tayari zimezidi mipaka ya bajeti, hasa kwa sababu ongezeko la viwango vya riba katika nchi zilizoendelea na mabadiliko ya bei ya hatari yameongeza gharama za huduma ya madeni. Matokeo yake, mara nyingi hawana upatikanaji wa fedha za bei nafuu. Jitihada za kushughulikia tatizo hili la mfumo zinaendelea. "Mfano wa kwanza ni mpango wa Waziri Mkuu wa Barbados Mia Amore Mottley, ""Bridgetown Initiative,"" ambao unakusudia kuunda nafasi zaidi ya kifedha kwa ajili ya maendeleo, kupunguza hali ya hewa na kukabiliana na hasara na uharibifu." Lakini ni lazima afanye mengi zaidi. Kwa kweli, mfumo wa kifedha wa ulimwengu lazima ufikirie upya kabisa. "Mkutano wa Paris unaofuata lazima utokeze mpango wa marekebisho unaoaminika ambao unalingana na mahitaji ya asili. """ Wakati huohuo, benki za maendeleo za kimataifa lazima ziweke asili katikati ya shughuli zao. Mfumo wa Biodiversity wa Dunia uliokubaliwa katika Mkutano wa Biodiversity wa Umoja wa Mataifa mnamo Desemba 2015 huko Montreal, unawajibika kuhakikisha kuwa portfolios zao ni nzuri kwa asili na zinaendana na makubaliano ya hali ya hewa ya Paris ya 2015. Uangalifu maalum unapaswa kutolewa kwa kuongeza ufumbuzi uliojaribiwa, kama vile kubadilishana deni kwa asili. Swaps kama hizo - hasa, "mabango ya bluu" yaliyoanzishwa na The Nature Conservancy - huwezesha nchi kufadhili deni lake chini ya masharti mazuri zaidi, na kugawa mapato kwa ajili ya ulinzi wa utofauti wa kibiolojia na marekebisho ya hali ya hewa. Matokeo ni matumizi ya juu juu ya uhifadhi au uwekezaji kijani, na ndogo <unk> au, angalau, si kubwa <unk> mzigo wa deni. Mkataba wa kubadilisha deni la $ 364 milioni na The Nature Conservancy uliruhusu Belize kupunguza deni lake kwa karibu 12% ya Pato la Taifa, wakati ikifungua karibu $ 180 milioni katika ufadhili wa uhifadhi endelevu wa muda mrefu zaidi ya miaka 20. Mkataba huo pia ulijumuisha ahadi ya Belize kulinda asilimia 30 ya eneo lake la baharini. Mkataba wa mwaka jana, uliohusisha shirika la The Nature Conservancy na Benki ya Maendeleo ya Amerika, ulifanya serikali ya Barbados kubadilisha deni la dola milioni 150 kwa kubadilishana na ahadi ya kuhifadhi karibu asilimia 30 ya eneo lake la baharini. Mkataba wa dhamana ya dhamana ya dhamana ya dhamana ya dhamana ya dhamana ya dhamana ya dhamana ya dhamana ya dhamana ya dhamana ya dhamana ya dhamana ya dhamana ya dhamana ya dhamana ya dhamana ya dhamana ya dhamana ya dhamana ya dhamana ya dhamana ya dhamana ya dhamana ya dhamana ya dhamana ya dhamana ya dhamana ya dhamana ya dhamana ya dhamana ya dhamana. Kubadilisha madeni kwa asili si tiba ya magonjwa yote; haziondoi haja ya misaada, fedha za upendeleo na mikopo mingine, au uwekezaji wa kibinafsi. Msaada wa misaada ya kimataifa umekamilika, na nchi tajiri zimekamilisha ahadi zao za kutoa dola bilioni 100 kwa mwaka kwa ajili ya maendeleo ya hali ya hewa. Nchi tajiri pia zimeshindwa kuhamasisha uwekezaji wa kibinafsi wa kutosha. Kuongeza kiwango cha uaminifu, kwa mfano kupitia dhamana ya mtu wa tatu, itapunguza hatari ya uwekezaji (na kwa hivyo gharama za kukopa za wakopeshaji wa deni), ambayo wakati huo huo itawezesha nchi kupunguza mzigo wao wa deni na kusaidia kukusanya fedha za kibinafsi kwa ajili ya uwekezaji wa hali ya hewa na asili. Hata hivyo, kubadilishana madeni kwa asili kunaweza kusaidia nchi zenye mapato ya chini na ya kati kukabiliana na changamoto tatu za madeni makubwa, mabadiliko ya hali ya hewa na upotezaji wa viumbe hai. Mkutano wa Umoja wa Mataifa wa Mabadiliko ya Hali ya Hewa (COP27) na Umoja wa Mataifa wa Mipango ya Uhifadhi wa Deni (Sustainable Debt Coalition) umependekeza kuimarisha mfumo wa udhibiti wa madeni ya nchi zinazoathiriwa na mabadiliko ya hali ya hewa. Habari njema ni kwamba usanifu wa taasisi unaohitajika kufuatilia kubadilishana deni kwa asili kwa kiwango na na watendaji zaidi tayari umewekwa kwa kiasi kikubwa. """Kile kinachohitajika sasa ni nia ya wanahisa na hatua za mtendaji ili kuongeza uwezo wa taasisi za fedha za maendeleo kutoa dhamana kwa ajili ya uzalishaji wa deni la serikali kuhusiana na uwekezaji wa hali ya hewa na asili." Mkutano wa Paris unaweza kuanzisha maendeleo kwa kuunganisha taasisi za kifedha za kimataifa juu ya mifumo ya kuhakikisha kubadilisha madeni, na kwa kuwasilisha mfuko wa mageuzi ya kuongeza ufanisi na ufanisi wa kubadilisha kama hizo kabla ya Mkutano wa Umoja wa Mataifa wa Mabadiliko ya Hali ya Hewa (COP28), ambayo huanza Novemba 30. Marekebisho ya kifedha ambayo hayazingatii asili yatathibitika kuwa yasiyoweza kudumu kwa muda mrefu. "Mabadiliko ya ""deni kwa asili"" sio chaguo la kiuchumi tu, lakini sasa ni ""mshikamano wa maisha"" kwa sayari yetu." Lakini ikiwa hatutaki kuipata sasa, huenda ikawa haitaweza kutufikia.