Assessing the Suitability of Countries for Debt-for-Climate Swaps: Creating and Comparing Indices

Abstract: This thesis creates multiple indices to score and rank developing countries with regard to their suitability for engaging in debt-for-climate swaps, and thus identify the most suitable country candidates. The origin of debt-for-climate swaps lies in the 1980s, and after a period of diminished use and attention they have become a topic of discussion again, especially in the last two years. Despite this, there has been little attempt in the literature to systematically identify the countries that are most suitable for such a policy instrument. This thesis builds upon the most serious and detailed attempt, (International Institute for Environment and Development, 2020), by tackling its shortcomings to create some new indices with updated data and methodologies. The findings indicate that countries such as Djibouti, Papua New Guinea, and Mozambique are some of the most suitable countries for debt-for-climate swaps, contrary to the recent focus on SIDS.