New Research Published: Tourism Industry Financing of Climate Change Adaptation in Small Island Developing Statesucfbhes31 July 2017
Tourism is the most important economic sector in many small island developing states (SIDS), often driving development. Tourism in these island nations is however, threatened by climate change impacts, such as sea level rises or tropical cyclones. To cope with the damage costs of these impacts, a larger amount of money will be needed. This raises the question of who should pay for climate change adaptations, and whether it is the government and the tourism industry that are ultimately responsible.
In this study, Ilan Kelman and I explore the perceptions of selected tourism sector stakeholders and investigate the potential of the tourism industry for financing adaptation among SIDS. A range of financial and political mechanisms, such as adaptation taxes and levies, adaptation funds, building regulations, and risk transferral, were examined. The results show that there is great potential for the tourism industry funding its own adaptation, but with significant challenges in realising this potential. Consumer expectations and demands, governmental hesitation in creating perceived investment barriers, and assumptions about cost effectiveness could undermine steps moving forward. Varying incentive structures, the sector’s price sensitivity, and the varying abilities of tourism industry stakeholders to adapt are all factors suggesting that government frameworks are needed to ensure effective and substantive action.
Highlights of our article include:
- Several promising revenue mechanisms in the tourism industry among SIDS exist that can be tapped to fund the industry’s climate change adaptation (CCA).
- Private adaptation financing initiatives presumed to be cost-effective and feasible for the tourism industry include investing in water efficiency and pooling resources in a targeted fund, which are then allocated by need.
- The biggest barriers to engaging the tourism industry among SIDS in funding their own CCA, are the government’s assumed economic dependency on tourism, consumer expectations and demands, and assumptions about costs and benefits.
- Varying incentive structures and price sensitivity suggest that government frameworks are needed to create substantive and effective action.
To read our article in full, click here: https://www.cddjournal.org/article/view/vol02-iss2-4