Environmental effects of tourism industry investments: an inter-temporal trade-off (original) (raw)

Environmental policy and long-term welfare in a tourism economy

Spanish Economic Review, 2008

A dynamic general equilibrium model of a small open economy specialized in producing tourism services is presented. The tourism package is a bundle of attributes provided by firms, the government and the natural environment. Investment in accommodation increases the number of visitors but also congests public goods and reduces environmental quality. The model is used to determine the conditions for the existence of a long-term double dividend. These conditions depend on both the initial level of environmental quality and the responsiveness of the tourism price to marginal changes in environmental and accommodation quality and congestion of public goods.

Economic welfare, the environment and the tourist product life cycle

Tourism Economics, 2007

The tourist product life cycle model predicts different stages of the evolution of the industry in a particular region, focusing on the number of tourists visiting over a period of time. In this paper, we consider the role of environmental degradation and the decline in natural capital as determinants of the tourist product life cycle and the implications for economic welfare. It is shown that the optimal trajectory of tourist consumption increases when the stock of natural capital is high and environmental attributes are preserved, and tend to decline when the tourist product has reached a low level of natural capital, which is defined as the stock of natural resources giving value to the tourist product. The main implication is that the evolution of demand as represented by the number of tourists does not need to match economic welfare. In addition, the evolution of the tourist product life cycle converges to a stationary solution characterized by positive levels of tourist consumption and natural capital. The results have implications for the optimal management of the number of tourists and the environmental attributes of tourist destinations. Optimal taxation can play a role in financing the maintenance of the optimal level of natural capital in the stationary state.

Dynamic implications of tourism and environmental quality

Journal of Public Economic Theory

Many studies draw attention to the rising number of tourists seeking destinations in environmental hotspots. However, it is also recognized that tourism activities significantly deteriorate the environment. Our paper investigates the dynamic interaction between tourism and environmental quality, focusing on its effect on the development of tourism-driven economies. We use a theoretical model in order to study the dynamic implications of this interaction. In this respect, we point out the role played by environmental maintenance activities and ecotourism. Ecotourism allows the economy to improve welfare in the long-term, but we identify a social cost in terms of current generations' welfare. Finally, the existence of imbalance effects between tourism infrastructures and environmental quality provides new insights about the transitional dynamics of tourism destinations.

THE EFFECTS ON ENVIRONMENTAL INVESTMENT OF CHANGES IN TOURISM DEMAND

2007

In this short paper we analyze the impact of tourist demand in hotel rooms on the investment of hotels on environmental quality. We show that when income of the tourists increases, then to maintain the demand for rooms, the hotels must increase the investment on the environmental quality of the region where there is an increment of the tourist activity. In the particular case where we have three different hotel chains located in three different tourist regions, we show that the incentive of hotel chains to invest in environmental quality depends on the demand for days of rest on the part of tourists and on the level of aggregate income. We also show that if total income increase, then the incentive to invest in environmental quality increases in the region where the price of a hotel room is lower.

ENDOGENOUS LIFECYLE AND OPTIMAL GROWTH IN TOURISM

The tourist product lifecycle model predicts different stages of the evolution of the industry by focusing on the number of tourists visiting a particular region over a period of time. In this paper we consider the role of environmental degradation and the decline in natural capital as determinants of the tourist lifecycle and their implications for the economic welfare of the recipient society. The model incorporates feedbacks from the impacts of tourism growth on the environmental attributes and the reaction of demand to these changes. It is shown that the optimal trajectory of the tourist consumption increases when the stock of natural capital is high and environmental attributes are preserved, and tend to decline when the tourist product has reached a low level of natural capital. The consideration of an exogenous tourist product life cycle does not alter the general results, nor the formulation of a profit maximizing model for the recipient society. The implication is that the evolution of demand as represented by the number of tourists does not need to coincide with the evolution of economic welfare. That is, the increase in the number of tourists is compatible with a decline in welfare as a result of the loss of competitiveness. The results have implications for the optimal management of the number of tourists and the environmental attributes of tourist destinations.

Tourism specialization and environmental sustainability in a dynamic economy

Tourism economics, 2007

This study focuses on the dynamic behaviour of a small open economy specialized in tourism based on natural resources. The author analyses the steady-state properties in two scenarios, with and without public abatement expenditures, and a unique local saddle-point equilibrium is found for both cases. The analysis of the dynamics provides an alternative explanation for the observed positive growth performance of small open tourism-based economies and for the worldwide increases in tourist inflows, which are seen as transitional phenomena towards the path to the steady state. Moreover, in defining the conditions under which tourism development, improvements in environmental quality and economic growth can simultaneously occur, the model provides theoretical microfoundations for sustainable tourism. Finally, in both scenarios, the author analyses the issue of market failures, taking into account two different kinds of externality and finding the respective optimal tax rates that will induce private agents to replicate the social optimum.

A note on optimal tourism control

2018

This note will present a diagram which can be used when discussing tourism carrying capacity. It borrows from the theory of optimal pollution control, found in most Environmental Economics textbooks. The diagram presented here relates to the need to take account of income foregone as a result of a reduction in tourism inflows, juxtaposed against the environmental damage and social discomfort that can result from excessive amount of tourism business.peer-reviewe

Tourism, recreation and optimal environmental defensive expenditures

The protected areas(PAs) managers have to provide for regulated access of tourists and visitors into a park (on their own as well as through encouraging private sector activity in this sphere), while ensuring the preservation of its natural and cultural heritage. This means that PA develops and implements a system of management and economic measures that aim to involve tourists, tourist agencies and investor in the protected area and create (especially around its borders) a highly efficient tourism infrastructure that promotes the integration of the PA into social and economic structure of the region. The purpose of PAs and their recreation potential allows for the development of various type of regulated tourism within both the PA and its transition areas (Lindberg and Aylward 1999, Kerkvliet and Nowell , 200). PAs managers are typically governmental staff but can be NGOs or community-based organizations or their members. Managers generally seek to maximize proprietary income from user fees that can directly support the operating costs of PA management. Managers need to ensure that user fee mechanisms and associated services, such as lodging accommodations within a PA, are consistent with and supportive of the overall conservation objectives of the PA. Where profit is defined as the difference between revenue from entrance fees and the sum of expenditures on recreation investiments and defensive expenditure for ensuring the preservation of its natural and cultural heritage. This paper presents a optimal model of management of the PAs for thinking about the optimal provision of services in the PAs and optimal environmental defensive expenditure. The main result is that, for reasonable parameters values, the optimal solution exhibits a cyclical behavior. PA manager invests in order to increase the number of visitors, such increment damages the environmental resource, with consequent decrease of the visitors and a consequent increment of effort in order to defend the stock aggregated resource. The defensive action leads to an increment of the resource stock and resumes the icrement of the visitors. An optimal politic of management of the PA leads to a cyclical behavior of the number of the visitors, while a lot often the managers try to reduce the variations of the number of visitors and to maintain a trend of constant increase, for revenue generation and increase opportunities for local businesses and employees. The problem is formuled with two state variables:

Closed Form Solution for Dynamics of Sustainable Tourism

The attention to environmental conditions of the planet drives many scientists to study and to analyze the externalities of the economic activities and their relapses on nature. The issue is quite complex because of the non-linear in- teractions between human and natural phenomena. Our intention is to study the particular case of tourist activities. Starting from the specication of the concept of sustainable development, using a simple model we characterize the conditions for which there exists an optimal equilibrium between nature and tourism. Then, trough several simulations we study which policies are able to guarantee the better synergies between economy and environmental quality.