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Climate Change and Sustainable Business Futures for Tourism in the ACT


Despite being a contributor of climate changes, tourism industry is one of the most vulnerable industries to the effects of climate change. Australian tourism, like the case for many tourist destinations, is very vulnerable to the climate change. And over the years, the tourism industry landscape has changed significantly with the adverse effects of climate causing significant financial implications. However, the ability of the players in the tourism industry in the country and world over to adapt to the changing business landscape is a major determinant of the extent to which climate change affects the industry. But it is impossible for the industry to be fully prepared and adaptive to some of the climate change scenarios that they are often confronted with. The bleaching of the Great Barrier Reef which ahs been a major concern for the industry for many years now is a major indicator of the vulnerability of the Australian tourism. Moreover, the gradual melting and reduction of the snow on the peak of Australian Alps is a major concern for the industry because these are some of the largest tourists’ attractions in the country. In addition, Donnelly and Mercer, (2008) note that environmental pollution by the harmful emissions from various modes of travel including airplanes and buses have become a major cause of concern in the tourism industry.

These factors have culminated into the some times cyclones and heat waves which have swept through the country leaving several dead and properties worth millions of dollars destroyed in their wake. The alarming erosion of the coastal lines and the increasingly flooding as a result of cyclones and unexpectedly high amounts of rainfall are all manifestations of the vulnerability of the Australian tourism industry to the effects of climate change. The tourism industry is also increasingly being associated with greenhouse gases emitted from the various tourist centers and facilities across the country. From consumable products to transport and electricity use, tourism is increasingly contributing to carbon footprint leading to climate change of which it is increasingly becoming a victim to (Forsyth et al., 2008).

The growing concern of the impact of tourism on climate change and vice versa has generated a lot of interest in the scholarly world and amongst several organizations such as the World Tourism Organization (WTO), World Travel and Tourism Council (WTTC), United Nations Environment Program (UNEP) and some taskforces such as the National Tourism and Climate Change Taskforce have carried researches into the issue and provide various policy frameworks and guidelines to help the industry adapt and mitigate its effects. Australia’s National Climate Change Adaptation Framework is one such policy framework aimed at helping the tourism industry and the country at large adapt to the changing climatic conditions. Moreover, these policies and new approaches to tourism are in light with the ever growing sensitivity of the society at large towards environmental pollution. Consumers are increasingly opting for environmentally friendly businesses. This paper will examine the various steps that the tourism industry in the ACT has and can take towards ensuring sustainable tourism.

Climate Change and Sustainable Tourism in the ACT

Climate change has biophysical and economic impacts and threatens to derail the gains that the tourism industry in Australia and the ACT in particular has made over the years. The call for sustainable tourism aimed at maximizing profit for the present and future generations is increasingly becoming louder. It is an idea that is increasingly being echoed across the industry and the country with policymakers, industry players including business entities and clients increasingly taking a front seat. Local and international organizations such as the Queensland Tourism Industry Council (QTIC), Tourism and Transport Forum and UNEP have organized forums and research studies to push sustainable tourism into the mainstream public policy sphere. Summits such as Tourism and Transport Climate Change Summit held in 2007 and studies conducted by Sustainable Tourism CRC (STCRC) through a group of researchers led by Buultjens in 2007 have explored the connection between tourism and climate change. They have also explored the various measures that can be taken to adapt to the changing business landscape in the tourism industry while also highlighting some of the sustainable tourism models (Buultjens et al., 2007). Some of these studies including those conducted by Forsyth et al. in 2008 have explored the amount of carbon emissions or carbon footprints of the tourism industry in the country.

To support the eco-efficiency of the industry, the Australian has gradually increased their support, both policy wise and financial (Turton et al., 2010). These funds have financed various activities including research studies which have explored not only the various mitigation measures to climate change in the industry but also the various challenges faced in implementing these measures. These funds, along with the various policies, have been used by the government and the key players in the industry as incentives for the individual businesses within the industry to implement these measures and move towards sustainable tourism.

Despite these efforts, there are considerable challenges that still hinder the move towards sustainable tourism in the ACT and the country at large. There is an information gap in the industry especially amongst individual businesses, government and scholars on the importance of sustainable industry and most importantly, the various mitigation measures. The universal skepticism on climate change that has scampered the efforts to address the vice is replicated in the tourism industry in the country too. These challenges have inhibited the implementations of the various measures that have been outlined by the various researches, forums and taskforces (Scott & Becken, 2010). There is relatively low level of engagement amongst industry operators. It is therefore imperative that more awareness is created amongst the Australian public. Such actions must also be extended to the private sector. The two important sectors must also collaborate while the government and society leaders taking a leading role in awareness creation, supporting, collaborating and actively supporting sustainable tourism (Richardson & Witkowski (2010). There is need for a new approach towards promoting sustainable tourism and evaluation of the economic value of the environment.

Estimating the Value of Environmental Damage

The moral approach to the valuation of the of the environment has for many been derided and overcome by the economists and huge businesses which view the environment as a source of capital with no clear cut monetary value attached to it. That is, it is the capital found in the environment that has economic value and not the environment itself. However, over the years especially with increasing environmental disasters implicating corporations that have devastating effects on the environment and especially on the local human communities, plants and animals, the need to fix a definite financial value to the environment has gained prominence. Fixing a financial value to a particular environment is an appreciation of the fact that environment is an integral part of economic development. This realization is impetus in building the bridge that connects ecology and economics; two fields that have long been treated as unequal and with not connectivity (Farber, Costanza & Wilson, 2002). Indeed, capitalism has for many years treated economics as the most important and greater between the two. The appreciation that indeed environments have financial values which are not only tangible but also measurable has over the years shaped how companies whose operations directly affect the environments operate and view the environment. It has also shaped both local and international policies especially regarding the environment and trade. There are three distinct approaches towards estimating the value of environment with varying limitations and strengths.

One such approach is the simulated market approaches which instead of using market data collected from actual markets, rely on data obtained by simulating market exchanges. Therefore, the approach depends primarily on the responses given by the respondents to the survey questions. The responses can then be used to directly elicit a financial value to the environment under consideration. This is achieved by the trade-off and contingent valuation techniques. An evaluator can also use contingent ranking technique to analyze the responses and use the responses to generate indirect monetary values for the environment. Priority evaluator technique is also a popular technique for simulating market values of the environment based on the responses given by during a survey (Vo Quoc et al., 2012).

To effectively use a simulated approaches, there is need to have data on the prices of environmental goods and services. Moreover, data on the goods and services used for comparison, as alternatives and compensation during market simulation must be obtained (Vo Quoc et al, 2012. One of the strengths of simulated market approaches lies in the flexibility of the questions. Using such techniques as contingent valuation give the evaluator the freedom to ask questions whose answers capture the free will of the respondents with regards to compensation and alternatives. It also captures and evaluates the values of some environmental factors which are usually difficult to put a price tag on. However, the fact that this approach is based on survey questionnaires, the validity of the evaluation is susceptible to biasness and dishonesty. The respondents may misinterpret the survey questions leading to inaccurate responses and ultimately the accuracy of the evaluation is compromised. Therefore, the probability of obtaining a false value for the environment that does not fall within the real market value increases with using data from a simulated market.

Market value approaches techniques work on the principle that changing the environment directly affect the economic activities especially in the surrounding area. These changes can either be positive marked by increase in revenues from economic activities (benefits) or negative marked by increased cost of operations within the area of the disaster. These two variables are used to fix a financial value on the environment (Vo Quoc et al, 2012). There are various techniques which can be used with this approach such as change-in-productivity technique which measures the how change in the environment as a result of the gas accident affects the cost or benefit derived from the production process. Others include change-in-income technique which evaluates how the change in environment will ultimately affect the income of individuals. This is because this accident can ultimately lead to premature death and illnesses. This accident can also be evaluated by replacement technique which fixes the value of the environment based on the cost of environmental degradation or the cost of ensuring that the benefits are derived for a sustained period of time. While a preventative-expenditure technique would value the environment based on the how much the government and the community at large is willing to spend in order to prevent effects the accident will have on the environment a relocation-cost technique will fix this value based on how much the government and the citizens are willing to pay to relocate to new areas as a result of being denied the chance to derive the benefits.

To successfully use this approach, data from household incomes, cost of production by industries within the area and amount of funds allocated by the government or citizens to prevent such accidents or relocating to new areas. This approach is very easy and direct with improved accuracy in the valuation because it uses actual market data. Moreover, the evaluator can also forecast the how much governments and individuals can use to prevent the accident based on the existing market values or comparative analysis of other similar accidents. However, determining the various variables used in some techniques such as the production cost is only restricted to a limited period of time. Moreover, production cost and ill health which affects income are affected by other factors other than the environmental accident.

Surrogate approaches estimates the value of the environment based on the cost or benefits of its alternatives. Essentially, these approaches use an opportunity cost approach. A travel-cost technique using this approach will evaluate the value of the area of Baltic Sea based on the travel cost incurred by an individual for forgoing visiting the area. On the other hand, a property-value technique would estimate such value based on the difference in prices of properties in different environments (Limburg, O’Neill, Costanza & Farber, 2002). This is because environmental aspects such as air quality and lighting especially at the cost of the sea will determine property values in the area. The difference in the two values will determine the value of the environment (Farber, Costanza & Wilson, 2002).

While the wage-differential technique determines the value of environment based on wage differences between the area and other locations not affected by the accident, proxy good technique is based on the how the resulting environmental pollution will affect the prices of goods and services in the area. This difference will then be used to equate the value of the environment in the area. Therefore, data on commodity prices, wage rate, property values and travel costs is necessary to effectively use these approaches. These approaches are relatively accurate because they use actual market values and can also eliminate the influence of other factors in determining the value of the variables. However, the prices of commodities, travel cost, wage rates and property values can be negotiated and therefore may not reflect the true value of the environment.


Tourism plays an integral role in the ACT and the economy of Australia and other countries across the globe. The social-cultural exchanges and the economic income derived from tourism go a long in spurring economic, social, political and academic development in the region. It is a source of income for numerous individuals while it also serves as a source of capital that finances numerous investments and activities in other sectors and industries. However, there is a growing concern that tourism which is a major dependant of environmental integrity is increasingly contributed to environment degradation. This in effect threatens the tourism industry making it both a victim and a contributor to climate change. While numerous mitigation measures based on researches have been implemented across the board, there are numerous challenges threatening the sustainability of the industry. The existing information gap amongst industry operators has led to inaction and a lack of collaboration that is needed for success. There is need for the industry operators to reevaluate the value they give to the environment. Such will go a long way in ensuring that appropriate value is given to the environment with the aim of ensuring that the biophysical and economic impacts of tourism activities are deduced.


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Donnelly, D. & Mercer, R. (2008). “Propensity for UK and German long haul travellers to adapt travel intentions because of the carbon impact of a flight to Australia. Study results. Instinct and Reason. April 2008. Department of Resources, Energy and Tourism.

Farber, S.C., Costanza, R. & Wilson, M.A. (2002). “Economic and ecological concepts for valuing ecosystem services. In: The dynamics and value of ecosystem services: integrating economic and ecological perspectives”. Ecological Economics 41: 375–392. http://www.pdx.edu/sites/www.pdx.edu.sustainability/files/Farber_et_al.pdf

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