Q. With reference to “Debt-for-climate Swap” consider the following statements:
1.It is a mechanism that hold the countries accountable by the creditors for their lack of investments in the green technology.
2.The mechanism allows creditors to develop cooperation and achieve climate finance objectives and strengthen their diplomatic relations with debtor countries.
Select the correct statements using the codes given below:
Answer: B
Notes:
Explanation –
Statement 1 is incorrect. In a debt-for-climate swap, countries who borrowed money from other nations or multilateral development banks (e.g., the IMF and World Bank) could have that debt forgiven, if the money that was to be spent on repayment was instead diverted to climate adaptation and resilience projects.
Statement 2 is correct. This mechanism allows creditors to develop cooperation and achieve climate finance objectives and strengthen their diplomatic relations with debtor countries.
Source: ForumIAS
