Can debt relief save the future of the Red Sea's coral reefs?
In the weeks since the 2022 United Nations Climate Change Conference wrapped up in Egypt, the world’s attention has turned to other headline-grabbing developments, from the war in Ukraine to the 2022 FIFA World Cup in Qatar.
Nonetheless, the gathering in the Egyptian resort town of Sharm El Sheikh, better known as COP27, highlighted a trend likely to afflict the Arab world for decades to come: despite contributing little to greenhouse gas emissions, debt-laden developing countries appear likely to suffer the costliest effects of global warming.
A landmark deal in Belize may provide a path for the Arab world’s poorest countries to tackle these vexing challenges in tandem, combining debt relief with climate change mitigation.
The Nature Conservancy, an environmental organisation with global reach, helped Belize obtain over $350 million to service its government debt in exchange for the Central American country dedicating more resources to environmental protection and marine conservation.
"A 2019 study found that climate change could cost Egypt as much as 95 percent of its revenue from tourism to the coral reefs"
Belize’s distance from the Arab world notwithstanding, the country has some key parallels with its counterparts in the Middle East and North Africa.
Beyond the significance of a developing country receiving debt relief for toughening environmental policies, Belize oversees a series of coral reefs whose preservation the Nature Conservancy coded into the historic agreement. Arab countries such as COP27 host Egypt likewise have a number of coral reefs, among them species that have demonstrated impressive resilience against global warming.
Egypt has taken some steps to secure the future of its coral reefs, a leading tourist attraction. In September, the Egyptian Environment Ministry announced a “pilot project” that would include launching “a study on best practices and methods for rehabilitating and sanitising coral reefs in the Red Sea, implementing surveys and preparing reports and statistics on biological diversity in the study area, and building specialised technical cadres to spread awareness and training.”
Key experts argue that saving Egypt’s coral reefs will require greater action, likely from world powers. In a November open letter in the scholarly journal Science, five ocean scientists urged the international community to “boost Egypt’s coral conservation efforts” and “advance a shared commitment to conserve one of the few coral reef refuges from climate change.” The letter noted the international community’s pre-existing “finance mechanisms for reef conservation,” observing, “Egypt could benefit from similar partnerships.”
The Belizean arrangement offers one of the more effective models for how the international community might better support marine conservation in Egypt.
Thanks to the oddities of the bond market, the deal enabled Belize to reallocate over $200 million that would have otherwise gone toward its government debt. That type of money could go far for environmental protection in Egypt, whose government debt stood at $137 billion at the end of the 2020-2021 fiscal year.
Previous attempts to assist Egypt on this front have relied on smaller disbursements. The U.N. Capital Development Fund said in the early days of COP27 that the United States Agency for International Development was pledging “up to $15 million to scale coral reef-positive blue economic growth and conservation finance in the Egyptian Red Sea.”
A 2019 study found that climate change could cost Egypt as much as 95 percent of its revenue from tourism to the coral reefs, so world powers will likely have to come up with millions or even billions of dollars more.
Egypt hardly finds itself alone. In the first half of 2022, the government debt of Jordan—home to its own prized set of coral reefs in the Gulf of Aqaba—reached $41 billion, 88.4 percent of the kingdom’s gross domestic product. Meanwhile, in Tunisia, coral reefs near the resort destination of Tabarka appear set to suffer as climate change batters the country and the Tunisian economy falters, depriving authorities of the funds necessary to fund marine conservation.
Amid all the ecological and financial crises stemming from global warming, the international community may seem unlikely to rethink the concept of debt relief just to save the Arab world’s coral reefs.
However, COP27 upended long-held expectations about climate finance when world powers endorsed the idea of a so-called “loss and damage” fund to compensate developing countries for the effects of climate change, a measure that the European Union and the United States had resisted for years. A Belizean-style program for debt relief may come next.
The international community has already emphasised its dedication to coral reefs, particularly the Red Sea. Last year, the U.N. Development Program described the region’s coral reefs as “the last coral refuge globally.” During a speech at a 2018 conference on biodiversity in Sharm El Sheikh, Erik Solheim, then head of the U.N. Environment Program, warned, “The fate of the world’s coral reefs is hanging in the balance,” adding, “Coral reefs need a better deal.”
That deal could come in the form of pairing debt relief with marine conservation, as well as more general measures for environmental protection and climate change mitigation, a boon for Egypt, Jordan, Tunisia, and other coral-rich countries in the Arab world. Just as Belize benefited from the Nature Conservancy’s creative approach to the bond market, these vulnerable sanctuaries for biodiversity require significant financial assistance from the international community. While the memory of COP27 fades, the threat to the region’s coral reefs looms ever larger.
Austin Bodetti is a writer specialising in the Arab world. His work has appeared in The Daily Beast, USA Today, Vox, and Wired