The concept of unnatural debt swaps was first introduced in 1967 by James Goff of the Experimental Conservation Agency in collaboration with the Bidborough Badgers to solve the debt problems of developing countries and the resulting harmful effects on the environment.  In the wake of the Latin American debt crisis, which led to a sharp reduction in the environmental capacity of heavily indebted countries, Lovejoy suggested that debt relief and the promotion of conservation could occur simultaneously. Since the first exchange between Conservation International and Bolivia in 1987, many national governments and conservation organizations have exchanged debts for nature. Most trade takes place in tropical countries that contain many types of flora and fauna.  In addition, countries that have engaged in debt-for-nature swaps typically have multiple threatened or endangered species, experience rapid deforestation, and have relatively stable, often democratic, political systems.  Since 1987, unnatural debt agreements have generated more than $1 billion for conservation in developing countries.  In 2006, WWF supported the declaration of the 4.7 million hectare Juruena National Park in the Amazon region. With this new park, a total of 33 million hectares of new strict nature reserves and 18.5 million hectares of new sustainable land have been created since the creation of ARPA in 2002. Ultimately, the responsibility for nature conservation rests with the local non-governmental organization implementing the protection measures. Debt-for-nature swaps are only effective if conservation organizations are respected by local residents, have good financial management capacity, and maintain good relations with the government and other non-governmental organizations.   Through an unnatural debt swap, a debtor country reduces its total stock of external debt. The debtor country is able to buy back part of its debt on more favourable terms and pay for maintenance initiatives instead of debt servicing.
 This leads to a higher international purchasing power for the debtor country.  Some also argue that converting the stock of debt from USD to local currency debt reduces the long-term debt burden for developing countries.   In addition, in-kind debt conditions allow for long-term planning and financing.  WWF helped found the Enterprise for the Americas Initiative in 1991, which to date has generated more than $150 million in conservation and development funds from the proceeds of sovereign debt restructuring in seven Latin American countries. Namibia established the Communal Areas Conservation Programme in 1998, which identifies four community-managed nature reserves covering 4.2 million hectares of critical wildlife habitat. WWF and IUCN founded TRAFFIC in 1976, a wildlife trade monitoring network that ensures that wildlife and animal trade does not pose a threat to conservation. Research has shown that debt relief alone does not promote environmental protection. Although debt has a positive correlation with deforestation levels, most researchers believe that highly indebted countries lack political institutions and law enforcement structures that would limit environmental degradation.  Highly indebted countries can engage in high levels of deforestation due to short-sighted policies.  Some suggest that solutions to environmental degradation are effective political institutions, democracy, property rights and market structures, and this theory of development is consistent with many of the principles of the Washington Consensus.
Others suggest that wealth creation and income increase in particular have a positive impact on environmental protection.  This approach takes into account a Kuznets environmental curve where environmental degradation increases, reaches a tipping point, and then decreases with increasing income or wealth. Bilateral exchanges of unnatural debt take place between two governments. In a bilateral exchange, a creditor country cancels part of the bilateral official debt of a debtor country in exchange for that country`s environmental commitments.  An example of bilateral exchange occurred when the U.S. government, as part of the Enterprise for the Americas Initiative, granted a portion of Jamaica`s official debt commitments and allowed payments on the balance to go to domestic funds that finance environmental protection. These funds established the Jamaica Environmental Foundation in 1993. Multilateral exchanges of unnatural debt are similar to bilateral swaps, but involve international transactions of more than two national governments.
Recorded bilateral and multilateral trade in unnatural debt generated a total of nearly $900 million in conservation funding between 1987 and 2010 (see Table 1).  A closely related form of debt exchange is debt-for-efficiency swap.  WWF is beginning to focus not only on species-related conservation projects, but also on habitat protection through the creation of national parks and nature reserves. WWF entered into a $19 million unnatural debt swap in the Philippines in 1993, the largest such exchange ever conducted by a non-governmental organization. The largest unnatural debt swap in Madagascar`s history was agreed by the governments of Madagascar and France in 2008. The exchange brings in about $20 million over a five-year period and is part of a global effort led by WWF. Environmental benefits for the debtor country include: creditors view unnatural debt swaps as a way to free themselves from high-risk claims. By selling the debt, they can reinvest the proceeds of the sale in more powerful companies. Creditors facing underperforming loans may also seek to limit their exposure, i.e. avoid further loans to debtor countries until their loans are served.
 Unnatural debt swaps result in only marginal deleveraging and generate much less liquidity than the face value of debt purchased on the secondary market.  The amount of sovereign debt released by unsistakable debt swaps represents less than 1% of total external debt, even in countries that regularly participate in swaps.  If, in the absence of a natural agreement, the indebted country does not engage in nature conservation operations, the exchange must not provide the indebted country with an improvement in social protection or fiscal room for manoeuvre in the state budget.   The government of the indebted country is still responsible for paying the debt, although to a custodial organization and not to the creditor. In addition, the funds obtained under the agreement may replace other forms of aid, debt aid or maintenance financing. Wwf was instrumental in the creation of the Cockscomb Jaguar Reserve in 1987, which protects one of the largest populations of jaguars in Central America as well as the endangered Scarlet Macaw. International standards for fisheries management will be established in 2000 within the framework of the MSC. Certified Australian stone lobster is coming to market, and Alaskan salmon, which accounts for more than six percent of the total annual fishery in the United States, is also certified. Negotiations between WWF and its partners in 2004 resulted in the financing of the protection of nearly 11 million hectares of rainforest in Colombia through a $10 million debt-for-nature swap and $15 million from the Global Environment Facility.
In 2006, WWF thwarted a proposal for the world`s largest oil palm plantation that threatened to destroy Borneo`s last intact forests. The governments of Malaysia, Indonesia and Brunei are committed, at the heart of the Borneo Declaration, to the sustainable conservation and management of forests. WWF is buying 37,000 hectares next to Lake Nakuru in Kenya. Nearly 30 species of birds depend on the lake, including one million flamingos, of which the lake was the main food in 1973. Nicholson was motivated in part by the financial difficulties facing the International Union for Conservation of Nature (IUCN) and believed that a new fundraising initiative could help IUCN and other conservation groups achieve their mission. He drafted a plan in April 1961 that served as the basis for the creation of WWF, which was later approved by the IUCN Board of Directors in a document called the Morges Manifesto. In 1980, with the critical support of WWF and the United Nations Environment Programme (UNEP), IUCN published the Global Conservation Strategy, which states that humanity exists as an integral part of nature and has no future if nature and natural resources are not preserved. The Conservation Foundation, an institute for conservation policy based in New York and later Washington, D.C., officially joined WWF-US in 1985 – a merger that was completed in 1990. Finca La Planada, a 3,700-hectare farm in Colombia, became a nature reserve in 1983 thanks to the joint efforts of WWF and the Colombian Foundation for Higher Education. La Planada is a tropical rainforest with enormous floral and wildlife diversity.
WWF organized a $2.1 million debt-for-nature swap for Madagascar in 1989 with the help of a $1 million grant from the U.S. Agency for International Development — the first major U.S. dollar. . . .