US, Indonesia sign $30m debt-for-nature swap

The United States forgave almost $30 million in Indonesian debt Thursday, diverting the funds to tropical forest conservation on Borneo. The debt-for-nature swap is authorised under the US Tropical Forest Conservation Act, aimed at mitigating climate change by reducing deforestation which releases greenhouse gases. \"We are all aware that Indonesia\'s forests are facing tremendous pressure domestically and globally, due both to economic growth here and an economic crisis abroad,\" said US embassy acting deputy chief of mission James Carouso. Swathes of carbon-dense peatland in Kalimantan, Indonesia\'s part of Borneo island, have been destroyed to make way for lucrative palm oil and pulp and paper plantations. Burning the peatland, a traditional land-clearing method, releases enormous amounts of greenhouse gases into the atmosphere, and creates haze that travels to neighbouring Malaysia and Singapore. Indonesia already receives forest conservation funds from Norway, Australia and Britain, as well as multilateral funds. In a $1 billion deal with Norway, Jakarta in May implemented a two-year ban on new logging permits for peatland and primary forest. Deforestation is estimated to account for almost 20 percent of global greenhouse gas emissions. In Indonesia it is said to produce more carbon emissions than all the cars, buses, trains and planes in the United States, making it the world\'s third-biggest emitter, according to UN figures. The swap is supported by the WWF and the Nature Conservancy, which will monitor disbursement of the funds to approved projects proposed by communities. \"The government will deposit $28.5 million dollars into a fund and will slowly disburse the money for individual projects. It is intended to benefit civil society,\" said WWF Indonesia\'s Budi Wardhana, who oversees the organisation\'s economic instruments. Indonesia has a history of debt swaps in other areas, such as education and health.