Tropical Forests - How Debt-for-Nature Swaps Protect Tropical Forests

Mexico's Calakmul Biosphere Reserve. Photo © Mark Godfrey/TNC. Red-eyed tree frog, Costa Rica. © Kenneth A. Deitcher

Help Protect Tropical Forests

Help us preserve the tropical forests of the Mesoamerican and Caribbean regions.

What is a Debt-For-Nature Swap?

Debt-for-nature swaps are an agreement between the U.S. government and the government of a developing country:

The United States forgives a portion of the country’s debt.
The money that would have gone to pay the debt is then used to conserve tropical forests.

The U.S. Congress passed the Tropical Forest Conservation Act in 1998, which established legislation that created current debt-for-nature swaps. To participate in this program, a developing country should have a stable political and economic system.

Private and non-governmental organizations then must commit to providing a certain amount of funds to “purchase” the developing country’s debt from the U.S. Treasury.

Facts About Tropical Forests

Learn about some of the products tropical forests provide and other cool facts about these precious resources.

Forest Quiz

Test your knowledge of tropical forests.

News on the Swap

Read The New York Times article on this significant deal for Guatemala.
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Tropical Forests in the Region

Learn how tropical forests in the Mesoamerica and Caribbean region shelter rare and endangered species.

How Debt-for-Nature Swaps Protect Tropical Forests

Debt-for-nature swaps are one of the innovative methods The Nature Conservancy uses to protect tropical forests from further deterioration. The 2006 debt-for-nature swap in Guatemala is a great example of how this conservation tool can ensure the sustainability of a tropical forest over a period of years. This is the largest debt-for-nature swap The Nature Conservancy has ever supported and will leverage $24 million over the next 15 years.

The Nature Conservancy: An Important Facilitator

The Conservancy provides around $1 million to purchase anywhere from $10 million to $24 million of the country’s debt from the U.S. Treasury. The country then continues to make its regular debt payments, but instead of making them payable to the U.S. Treasury, they make their payments into a Conservation Trust Fund within their own country. The Conservancy helps manage the fund, which is then used to finance forest conservation over a period of years.

Previously, the Conservancy has helped initiate debt-for-nature swaps in Belize, Panama and Jamaica. In total, the Conservancy has invested around $6 million into these agreements—an investment that is leveraging around $60 million in regional tropical forest conservation. These success stories include:

Jamaica has three forests that are critically important to biodiversity. These forests include the Blue and John Crow mountain forests in the east, the Cockpit Country’s unique forests in the west and the Spinal Forest that runs between the two. These areas are a rich home to several unique species — including the booby and the Jamaican boa. The Conservancy helped establish a debt-for-nature swap here in 2004 — raising $1.3 million that resulted in $13 million of debt to the United States being redirected to forest conservation in Jamaica.

Panama's Chagres National Park and Darien National Park contain several environmentally important tropical forests that have benefited from recent debt-for-nature swaps. In 2003, a $1.16 million investment helped forgive $10 million of debt used to protect the Chagres National Park. In 2004, the Conservancy invested an additional $1.3 million to purchase another $11 million of Panama’s debt to the United States. This resulted in long term protection for the Darien forest on the border of Panama and Colombia, which connects Central and South America’s biodiversity.

Belize is home to the dense and mysterious Maya Forest, which also stretches into Mexico and Guatemala. The Maya forest is home to amazing wildlife such as jaguars, and scarlet macaws. It also contains the ruins of hundreds of ancient Maya cities. In 2001, the Conservancy provided $1.3 million to a swap that helped purchase $1.4 million of Belize’s debt to the U.S. government. These funds were used to secure 23,000 acres of vulnerable forest in Belize’s Maya mountain marine corridor and continue to fund forest conservation annually.