Environment and Economics: Linking Tropical Rain Forests and Foreign Debt

By Maria Lazar

In this note, the author addresses the problem of rapid rain forest deforestation around the world. Citing the environmental impact the deforestation will have to both the local and global communities, the author urges that some affirmative action must be taken on an international cooperative level to stop the deforestation.

The vast majority of the countries that experience deforestation are poor, and they often claim that it is out of economic necessity. However, the author points out that deforested land is all but worthless for agricultural use. Further, she argues that the deforestation makes the land erosion-prone and ultimately less valuable than it would have otherwise been.

To encourage nations to stop deforesting the rainforests, the author mentions a number of feasible alternatives. Among the different alternatives is the use of 'debt-for-nature' swaps. In such an arrangement, an environmental organization would buy the discounted debt of a poor rainforest possessing country in exchange for environmental concessions from that country's government.

The author also suggests that by building a tourism industry designed around the appeal of the rainforest, poor countries could simultaneously economically benefit from the forests while retaining an incentive to not destroy them