United States Senate panel clears ‘debt for nature’ swaps
Allison Winter, E&E Daily reporter
A bill that would let foreign countries pay off some of their debt by protecting coral reefs and tropical forests sailed through the Senate Foreign Relations Committee yesterday with unanimous approval.
The committee approved the bill, S. 2020, by voice vote with no debate as part of a larger markup. It would reauthorize an existing “debt-for-nature” program for tropical rain forests and add coral reef conservation to the mix.
Sens. Dick Lugar (R-Ind.) and Joe Biden (D-Del.) — the chairman and ranking member, respectively, of the Foreign Relations Committee — introduced the bill last week. The pair in a statement said they wanted to give the State Department new authority to allow it to pursue agreements to protect threatened coral reefs in Brazil and Indonesia.
Debt-for-nature programs first started in the late 1980s, when environmental groups saw an opportunity in developing countries with extensive debt and degrading natural resources. Groups started offering to buy off a portion of a developing country’s debt, as long as the country would use a percentage of the proceeds to develop conservation programs. The groups usually paid debts owed to commercial banks.
The U.S. government got involved in 1998, when the first tropical rain forest conservation act allowed the government to relieve some public debt owed to the United States in exchange for support of local tropical forest conservation activities. Countries can engage in debt swaps, buybacks or restructuring.
Nature Conservancy, World Wildlife Fund, the Wildlife Conservation Society and Conservation International are still involved. They match funds to contribute to the program. The groups have invested more than $9.6 million to debt-for-nature swaps.
Twelve countries currently have forest conservation agreements: Bangladesh, Belize, Botswana, Costa Rica, Jamaica, El Salvador, Panama, Peru, Guatemala, Colombia, Paraguay and the Philippines. The deals have led to the conservation of more than 47 million acres of tropical forests, according to Lugar’s office.
The bill authorizes $20 million through fiscal 2008 and up to $30 million by 2010.
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