§262p–4i Multilateral Development Banks and Debt-for-nature Exchanges

Summary

The Secretary of the Treasury must tell the U.S. Executive Directors at each multilateral development bank to push the banks to set up an environmental department (unless the Secretary decides one already exists). That department must handle protection and sustainable use of natural resources, make strong environmental rules for bank lending, and promote debt-for-nature exchanges and the protection or restoration of tropical forests and other resources. The U.S. Directors must back loans that include environmental measures, help countries use part of environmental loans to buy back private debt, have bank staff help countries work with local and international groups on debt-for-nature deals, and try to get the banks to require sustainable-use policies, economic programs for better environmental protection, and that a borrower’s policy changes or extra funds be used for at least one of nine kinds of environmental actions (for example: oceans and atmosphere, species and biodiversity, parks and reserves, natural resource management, local conservation, training and capacity building, research and public education, land and ecosystem management, or regenerative farming, forestry, and watershed work). The U.S. Executive Directors must also negotiate with other directors to create formal guidelines for restoration, protection, or sustainable-use policies. Until those guidelines are agreed, such policies are to be understood as ones that: (1) keep and restore renewable natural resources so people’s needs can be met without harming key ecosystems or making global problems worse; (2) conserve and manage resources to reduce pressure on them and support steady growth; (3) respect local limits like water, soil, climate, vegetation, and cultural practices; (4) protect and restore soils, vegetation, water cycles, wildlife, critical ecosystems (like tropical forests, wetlands, and coasts), and biodiversity while minimizing resource loss; and (5) prevent pollution that threatens health and important ecosystems and favor energy use that meets needs and relies on renewable sources where possible.