Tackling the triple crisis. Using debt swaps to address debt, climate and nature loss post-COVID-19

Even before COVID-19, fears were growing over developing country debt, which had surpassed US$8 trillion by the end of 2019. The pandemic has made the situation much worse as its economic impact pushes millions more women, children and men in these countries into poverty. This paper shows how, as part of pandemic economic rescue packages, governments have an opportunity to address simultaneously the crises of debt, climate and biodiversity destruction through a new use of the system of debt for climate and nature programme swaps. Increasing the use of these types of debt swaps would benefit lender and debtor governments as well as private creditors. Debt is already a major concern for many developing countries, reaching more than US$8 trillion in 2019. This has been made worse by the economic collapse in the wake of COVID-19, with debt servicing alone estimated to be more than US$3 trillion in developing countries in 2020 and 2021.