World Economic Forum: rescheduling debt for nature could unlock a sustainable recovery
Carlos Manuel Rodríguez Echandi, Chief Executive Officer and Chairperson, Global Environment Facility and Ibrahim Thiaw, UN Under-Secretary-General and Executive Secretary , United Nations Convention to Combat Desertification argue that the twin crises of sovereign debt and environmental damage are an opportunity for rethinking our economic model and its relationship with the planet.
Despite promises to “build back better” most recovery programmes have fallen short. And sovereign debt markets lag in integrating environmental considerations into their operations.
Nature Performance Bonds would link debt payments reductions to measurable and monitored environmental outcomes, such as. Biodiversity Targets, Land Degradation Neutrality Targets, Nationally Determined Contributions.
Pakistan is planning to pilot such a bond this year.
As the authors note, this is a are much more scalable approach than old style debt for nature swaps and though
They highlight that a major international effort is needed, that it will have to be coordinated and standardized if it is to be efficient and effective and that a Working Group on Nature and Debt, convened by F4B has been examining how this should be done.