Mark Jones
LONDON (Reuters) – The U.S. Treasury Department said on Monday it has agreed to forgive $35 million in Indonesian debt over the next nine years in exchange for the Southeast Asian nation restoring and protecting coral reefs in what experts estimate are the world’s most biodiverse marine areas.
Coral reefs are under threat worldwide, primarily from warming oceans caused by climate change, with data from May showing that nearly two-thirds of coral reefs have been exposed to enough heat stress in the past year to cause potentially fatal “bleaching.”
The agreement, the fourth “debt-for-nature” swap between the two countries since 2009, will fund conservation efforts for at least 15 years in two key regions known as the “Coral Triangle.”
The Birds Head and Lesser Sunda Banda Seascapes in question both cover hundreds of thousands of hectares and are home to more than three-quarters of coral reefs and over 3,000 species of fish, turtles, sharks, whales and dolphins.
Indonesia has about 5.1 million hectares of coral reefs, or 18 percent of the world’s total, according to the Tourism Ministry, but this year’s bleaching problem has already had a devastating impact.
“These two areas are both epicenters of biodiversity,” said Alexandre Portnoy, legal counsel for Conservation International, which helped arrange the deal.
Indonesia has benefited from debt swaps with the United States in 2009, 2011 and 2014 totaling about $70 million. This latest debt swap is the first to focus on Indonesia’s coral reefs, rather than its rainforests, which are endangered by expanding palm oil plantations.
Coral reefs are more difficult to protect at a national level because they are primarily threatened by global warming greenhouse gas emissions from the burning of fossil fuels, which Indonesia cannot address alone.
The agreement, signed last week and announced Monday, is still expected to bring about change.
Under the US Tropical Forest and Coral Reef Protection Act, $26 million of Jakarta’s debt will be forgiven, with Conservation International contributing $3 million and The Nature Conservancy, another group closely involved in the debt swap, contributing a further $1.5 million.
While Indonesia works to restore the reef, local nonprofits will use the conservation fund’s funding to support projects that directly benefit the reef ecosystem and support sustainable livelihoods for the people who depend on the reef.
“It’s very simple,” Portnoy said, explaining that the debt-for-nature swap was specifically designed to “break the vicious cycle” of debt burdens that lead to environmental degradation.
(Additional reporting by Gloria Dickey; Editing by Christina Fincher and David Gregorio)
