Debt-for-nature swaps were first introduced in 1984 to reduce the debt burden of low-income countries in exchange for their commitment to environmental protection. These nature swaps gained popularity during the '80s and '90s but largely fell out of favor after 2000, in part due to their shortcomings: small debt relief with high transaction costs, sovereignty concerns, and limited conservation impact.
In the 2020s, amid record levels of debt distress exacerbated by the pandemic and rising interest rates, nature swaps have reemerged as a potential tool for alleviating debt burdens while unlocking climate and nature finance. This new generation of swaps differs from earlier models in its focus on refinancing private-sector loans through green or blue bonds, with public-sector derisking via credit enhancements. To date, nine new nature swaps have been put in place.
Nicholas Institute experts and faculty and student collaborators across Duke University are evaluating the conservation, financial, and social impacts of this new generation of debt-for-nature swaps and developing reforms to improve their outcomes.
Webinar: A New Generation of Debt-for-Nature Swaps
Summarizes the history of debt-for-nature swaps and how the current generation of swaps is different.
Scaling Debt-for-Nature Swaps to Tackle Debt, Climate, and Biodiversity
Climate Week NYC 2024 panel discussion examining opportunities and obstacles involved in maximizing the future potential of debt-for-nature swaps, with experts from the banking sector, NGO sector, and multilateral finance institutions.
Q&A with Duke Experts: Reforming Debt-for-Nature Swaps
Debt distress, biodiversity loss and climate change are intertwined crises for developing countries. In a Policy Forum for Science, Duke University experts Elizabeth Losos, Alex Pfaff and Stuart Pimm propose four reforms to debt-for-nature swaps to help countries tackle these daunting challenges.
Bass Connections project: Evaluating Impacts of Debt-for-Nature Swaps on Debt, Climate and Biodiversity (2025-2026)
A Duke Bass Connections research project focused on evaluating the impacts of debt-for-nature swaps on debt, climate, and biodiversity.
