Colombia’s newly elected president, Gustavo Petro, has announced that he is seeking a debt for a nature swap that will enable the country to protect the Amazon rainforest, which is said to be nearing a tipping point after decades of deforestation.
Recall that Petro, a former rebel and the country’s first left-wing president, was sworn into office on Sunday 7 August in a historic shift for the South American country during which he addressed the need to mobilize resources to protect Colombia’s rainforests.
In 2022 alone, the South American country experienced the highest fiscal deficit in recent years and its external debt accounted for half of the country’s GDP. As the Covid-19 pandemic led to an increase in debt in Latin America, several nations turned to debt swaps to meet their climate goals.
During his inauguration, Petro said, “I propose to humanity to exchange external debt for internal expenses to save and recover our jungles, forests and wetlands,”.
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Under this scheme, developing countries have their debts cancelled or reduced in exchange for commitments to finance green projects. For instance, Ecuador significantly expanded the Galápagos marine reserve and financed it through this mechanism.
Recall that Colombia’s previous government had called for a similar measure in 2021, but didn’t announce new agreements.
Sejal Patel, an environmental economist at the International Institute for Environment and Development said that after the pandemic and the war in Ukraine exacerbated debt in developing countries, debt for nature swaps —if done appropriately— can become a realistic opportunity to get relief.
“If they’re structured well, then debt swaps can be a way to redirect payments to the national climate and nature objectives,” Patel was quoted as saying.
Story was adapted from Climate Home News.
