DNS involves an agreement between actors in a lending and borrowing country to reduce some of the borrowing country’s debt in exchange for the support of a specific environmental project. In 1987, the first debt for nature swap in the world occurred between Bolivia and Conservation International. It involved the cancellation of $650,000 Bolivian foreign debt in exchange for $100,000 of local currency to be used towards protection of the Bolivian Beni Biosphere. In recent years, the number of private debt-for-nature swaps (DNS) in 3rd World countries has been increasing rapidly.
Debt-for-nature swaps have been described as a deal where everyone benefits: indebted countries receive debt relief and environmental conservation organizations receive funding for conservation projects. DNS is an important issue because it could potentially be a useful tool in development strategy, but do DNS agreements really benefit all of the parties involved? There is a considerable gap in the research on the impact these deals have on the people living in the communities in/around the impacted environmental areas. The majority of the research available to the public is largely in favor of DNS. At the same time, the information presented is often overly-simplistic. This paper argues that the impact and mechanisms of DNS are more complicated and require more detailed analysis before any conclusion should be reached about the potential benefits and use of the debt-for-nature swap.
This paper will examine the debt-for-nature swap debate, and from a political ecology perspective, explain the complexities of DNS. 1 Very few researchers have tried to evaluate DNS from a broader perspective by observing the effects of swaps at different levels (i.e. locally, nationally, and globally) while paying considerable attention to unequal power relations between and within First and Third world groups. Analyzing the mechanisms of DNS by using either cost-benefit analysis or persuasive “win-win” arguments without reflecting on the politicized environment in which the swaps are being made results in overly-simplistic evaluations of DNS that cannot provide policy makers with a model that fully reflects all available information. The field of political ecology is well suited to address the gains and losses incurred at different scales by development mechanisms like debt-for-nature swaps.
