Islands explore debt for nature swaps
ISLANDS of the Caribbean, such as Antigua & Barbuda and Grenada, are joining others from the Pacific and the Indian Ocean in exploring the possibility of debt forgiveness for climate adaptation funding.
The two islands were a part of a high-level meeting arranged by the Global Island Partnership and its partners to discuss the blue and green economy from an island perspective at the recently concluded RIO+20 sustainable development conference in Rio de Janeiro, Brazil.
"We were heavily affected by global financial crisis. We had three successive years of Gross Domestic Product decline; we had to do debt reconstruction. Our adaptation funds were cut. We have been partnering with TNC to develop a strategy for Antigua and Barbuda to explore climate adaptation funding," said Nadia Spencer-Henry, debt manager in the Antigua and Barbuda Ministry of Finance. "We want to be the first country [in the Caribbean] to do this and also to share our experiences."
Indi McLymont-Lafayette, regional director for Panos Caribbean and who attended the Rio conference as part of Jamaica's official delegation, said the pursuit of debt for nature swaps might be a viable funding option.
"This was a topic of significant discussion at several events I attended in Rio. It is clear that many islands are looking at the debt for adaptation swap. The Pacific islands, such as the Seychelles, are further along in this discussion, but Antigua and Barbuda are also looking at that," she said. "I am not sure if this is something Jamaica is looking at yet."
Up to press time, no updates from RIO were available from either Jamaica's Office of the Prime Minister (OPM), the Ministry of Foreign Affairs and Foreign Trade to which reference was made by the OPM, or from the Ministry of Water, Land, Environment and Climate Change which directed queries back to Foreign Affairs.
Adaptation programmes, meanwhile, are typically comprised of special policies and infrastructure created to help countries adjust to predicted climate change impacts. The Caribbean has been dubbed a 'climate hot spot' and has been experiencing climate impacts such as more frequent and intense hurricanes, floods and droughts.
Within the region, Jamaica is among 14 small island developing states (SIDS) which has registered public debt to GDP ratios in excess of 60 per cent since 2009, with eight SIDS, mostly in the Caribbean, with debt to GDP levels in excess of 100 per cent. St Kitts & Nevis has registered one of the highest in the world at 192 per cent.
Analysts have said a significant portion of the debt is related to recovery costs from hurricanes and other natural disasters.
The proposed global approach for providing debt relief to SIDS is a multi-year commitment of roughly US$500 million to US$1 billion of commercial and/or bi-lateral debt for climate adaptation in marine ecosystems swaps over a 20-year period.
The money would be shared among direct debt relief, funding for climate adaptation in marine ecosystems, and also capitalise endowments for the countries to fund climate adaptation in marine ecosystem activities indefinitely.
Coming out of RIO+20, the Brazilian government also announced that the pursuit of the debt for nature benefit was high on its agenda.