Debt-for-Development Exchanges: Using External Debt to Mitigate Environmental Damage in Developing Countries

This article analyzes the conception, evolution and recent development of debt-for-nature exchange techniques. It explores how the lessons of the early, problematic exchanges have been learned and how the highly successful exchanges conducted recently in Madagascar, Egypt, and Kenya have been structured. It assesses the possibility of the Clean Development Mechanism under the Kyoto Protocol being tapped as a source of ongoing funding for projects, and concludes by arguing that, given the various benefits exchanges offer both donors and recipients, these techniques have been underutilized and deserve more careful consideration.