The South Asian nation reveals its plans to both tackle climate change and debt with green financing.
As Pakistan’s Prime Minister Imran Khan has recently highlighted in an opinion piece at CNN, the country which was the host of the UN’s annual World Environment Day on June 5, has become one of the most threatened by climate change. It has been suffering from extreme weather events including devastating floods. “All its ecosystems are degrading as a result of human actions”, Khan wrote.
Addressing the manifold consequences and complex interrelationships of climate change, the article declares: “Global economic development, food security, and peace are similarly threatened by the degradation of freshwater sources, oceans, mountains, grasslands and savannahs, and peatlands.”
To take both the threat that extreme weather conditions and a high debt burden pose on development into account, Pakistan is now looking to become a major player in the global green financing market. The country is presently working on a debt-for-nature swap deal, “in which relief will be linked to achievements in biodiversity conservation.”
As Reuters reports too, the South Asian nation is closing in on a deal with bilateral creditors. A joint statement with Canada, Britain, Germany and the United Nations Development Programme published on Thursday, outlined the aim to establish a “Nature Performance Bond”. Climate Change Minister Malik Amin Aslam told the news agency that the bond will be developed by a consortium of financial advisers, and is in its initial stages.
Debt swaps are supported by a broad front of scientists, both climate researchers and finance experts, as a promising tool to protect nature at the same time as reducing debt burdens that increased in the course of the COVID-19 pandemic. They are also a component of the DRGR proposal.