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Sustainable Tourism
Lecture 8 |
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Environmental Damage |
1. Gross Domestic Product (GDP) - does not include environmental damage
- GDP does not include pollution costs
- GDP does not include the exploitation of resources
- Example - A country cuts down its forests to supply the lumber market
- GDP is higher from the lumber activities
- Society loses its forests
2. Thomas Mathus - population is growing geometrically but food production is growing arithmetically
- Malthus was a priest and economist
- Wrote - Essay on the Principle of Population as It Affects the Future Improvement of Society (1798)
- Land is a fixed, scarce resource and food production is limited
- If the population exceeded its food production, then some people would "die off."
- Economics is called the abysmal science
- Problem - Malthus ignored the impact of technology
- Technology increases the production from scarce resources
3. Resources are defined as two types
- Renewable resources - the resources can be replenished
- Bio-energy and bio-fuels
- Water - tourists use fresh water, so government or companies process or purify water
- Nonrenewable resources - once the resource is gone, it is no longer available to society
- Petroleum and coal
- Historic buildings
- A beautiful, scenic area, forest, or beach
- Open access property - property or resource owned by society or the absence of ownership.
- Also called Tragedy of the Commons (Hardin 1968)
- Property rights are not well defined
- Outsiders cannot be excluded from using the property
- Outsiders can consume the resource, leaving nothing behind
- People have less incentive to develop, improve, or maintain land, if others cannot be excluded from consuming it.
- Examples
- Fishermen catch too many fish in public waters
- Fish populations decrease to low levels that it hurts future fish catching.
- Companies dump wastes onto public lands or waters.
- Air can be an open access resource, and some firms pollute and send pollution into the air
- Tourists
- Hike, swim, or visit pristine natural areas
- Generate trash and sewage
- Scuba divers, boats, and jet skis damage coral reefs that supports hundreds of sea life
- Correcting this market failure
- Allow one firm to control the resource
- The firm acts like a monopoly and develops the best plan to utilize that resource
- Monopoly may abuse a resource too
- Example - monopolist - owns rights to common land with a forest
- Monopolist cuts down all the trees if lumber prices are high
4. Externalities - the consumption or production of one individual or firm affects another person's utility or production without their consent.
- The externality influences profits and utility, but does not impact market prices.
- The externality is not incorporated into the market price
- Therefore, an externality is not efficient
- Positive externality - an individual's or firm's actions generate benefits for nonparticipating parties
- The private market may not supply enough
- Supply function understates the true value of output
- S is regular supply function and D is for demand
- Society would desire a higher supply
- Social Marginal Costs (SMC) - the marginal cost function that is beneficial for the whole society
- Note - if there were no externality, then S and SMC would be the same.

- Examples
- Inoculation for diseases - each person who is inoculated prevents the spread of a disease
- Scientific knowledge or technological know-how
- Bee keepers - bees pollinate farmers' crops, so they yield more fruits and vegetables
- Tourism - gov. builds a new road to a beautiful natural site
- Fixing positive externality
- Government subsidizes the producers, or directly supplies the product, such as vaccines
- Government is the lead developer in a tourist destination
- Negative externality - an individual's or firm's choice or action negatively harms others without their consent
- Property rights are not defined well
- Not all costs are registered, therefore supply function understates the true cost of production
- Example: A firm emitting pollution will typically not take into account the costs that its pollution imposes on others.
- Market price is too low
- Market quantity is too high
- The goal is to have firms pay for pollution
- The goal is not to set the pollution to zero!
- The pollution is in excess of the 'socially efficient' level.
- Note - if there was no externality, then MSC and S would coincide
- Note - tourism creates sewage and trash, and strains resources such as fresh water
- Tourists visiting natural environments can damage it through vehicle and foot traffic

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Sustainable Tourism |
1. Sustainable Tourism - sustainable development is applied to tourism
- Sustainability - "development that meets the needs of the present without compromising the needs of the future generations"
- WTO recommends tourism needs to satisfy three broad principles
- To improve the quality of life of the host community
- To provide a high-quality experience for visitors
- To maintain the quality of environment on which both the host community and the visitors depend
- Make optimal use of environmental resources
- Maintain ecological processes
- Biodiversity
- Conserve cultural heritage and traditional values
- Ensure viable long-term economic operations
- Balance among local community, tourists, and environment
- Sustainable and mass tourism are polar opposites
- Sustainable tourism is a niche market
- Attract a low number of high-paying tourists
- Means
- Reduce wastes
- Use biodegradable washing powders
- Conserve energy
- Recycling
- Types
- Ecotourism
- Green tourism
- Sustainable tourism
- Nature tourism
- Soft tourism
- Adventure tourism
- Sustainable tourism is hard to achieve
- Too many theories and experts
- Increase in tourism demand
- Hedonistic philosophy - indulgence in pleasure rather than responsibility
- Small-scale planned preservation
- Local development
- Money stays locally
- Mass tourism - detrimental to the environment
- Most common form of tourism
- Consumes resources
- Low spending and high volume
- Large, unplanned, uncontrolled, and scattered development
2. Tools to achieve sustainable tourism
- Government can use the instruments to reduce environmental damage
- Command and control regulations
- Example - water quality standards
- Could have high regulatory and enforcement costs
- Bureaucratic
- Government protects a natural site or encourages development in specific locations
- Taxes, subsidies, and grants
- Government imposes a tax on the pollution emissions
- Note - the tax has to be on the pollution itself
- Example - government imposes a tax on pollution emissions from a coal electric plant
- If government imposed a tax on coal, then firms could switch to a dirtier, cheaper coal
- Tradeable rights and permits
- Government creates a permit system for sulfur dioxide emissions from coal electric plants
- Each permit allows a firm to emit one metric ton of pollution
- Government sets the maximum pollution level and creates the maximum number of permits
- Government gives the firms the permits
- Some firms pollute more, and will buy permits
- Other firms will use more technology to reduce emissions, and then sell their permits
- Community programs - government encourages recycling
- Deposit fund schemes
- Government puts a deposit fee on glass bottles
- Example - Michigan has a $0.1 per bottle deposit
- Most residents collect and return bottles
- Carrying capacity - how many tourists can a destination support
- Restrict the number of tourists below the carrying capacity
- Physical - the actual number of tourists a site can support
- Roads, parking lots, number of hotel rooms, etc.
- Perceptual - measure of the number of tourists before visitor experience is damaged
- Example - Rome, Italy has way too many tourists around the famous sites
- Economic - the number of tourists who are welcomed to a location before the economy is adversely affected
- Example - Venice - many residents moved out, as the number of tourists surged in record numbers
- Ecological - a measure of tourists to a site before damage occurs to the environment
- Example - Tourists are attractive to a remote location with plenty of wildlife
- Hotels, restaurants, and roads start popping up everywhere
- Environmental Impact Assessment (EIA) - project assessment of adverse and beneficial impacts of a new development
- Examples
- Large-scale resort
- Dam
- New highway
- Used in the United State and Europe; not so much in other countries
- Does not apply to small-scale development
- Applies to new developments and not old ones
- Projects may not be monitored for compliance
- Opposition uses EIA to stop project
- Willingness to Pay - use surveys to estimate amount tourists are willing to protect the environment
- Similar to Contingent Valuation
- Hypothetical questions about a hypothetical market
- Willingness to pay = consumers' surplus + consumer expenditures
- Example - government uses a survey to ask consumers and tourists to protect a baboon wild life preserve in central Malaysia
- Note - green area is consumers' surplus, while total revenue is blue area

- Companies have environment statements and policies
- Create positive image of company
- Brochures
- Booklets
- Annual Reports
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Tourism in Costa Rica |
1. Costa Rica means "Rich Coast"
- Christopher Columbus discovered it in 1501
- Important exports
- Coffee - started in 1820s, and an important export until 1990s
- Bananas
- Eco-tourism - most tourists are from Canada and United States
- 780,000 tourists in 1996
- 2.1 million tourists in 2008
- $2.1 billion in earnings in 2008
- Tourism accounts for 8.1% of GDP, and accounts for 13.3% of direct and indirect employment
- More revenue than coffee and bananas combined
- Attracted direct foreign investment
- Intel constructed a micro-processor plant in Costa Rica
- Accounts for 20% of exports in 2006
- Accounts for 4.9% of GDP in 2006
- Rising class of software developers
- Tourism changed economy
- Costa Rica can protect its forests and biodiversity
- Can move away from cattle raising, logging, and banana plantations
- Cattle raising requires pastures and reduction of forests
- Logging cuts down the trees
- Banana plantations use pesticides and chemicals
- Eco-tourism
- Costa Rica is a small country (0.03% of the planet's surface), but has 5% of the world's wild life forms
- Tortuguero - "Turtle area"
- World renowned eco-tourism spot
- Has two churches, three bars, and two souvenir shops
- Not accessible by road
- Protect the endangered sea turtles
- Poachers hunt turtles for shells, meat, and eggs
- Eggs is a rumored aphrodisiac
- Aphrodite is the Greek goddess of love and sexuality
- Villagers no longer hunt the turtles; their main income is from tourism
- Lodges and hotels donate money to a fund, which helps fund schools and a water distribution system
- Monteverde Reserve - set a 100 visitor-a-day ceiling
- Preserve the ecology
- Increased ticket prices
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Terminology |
- Thomas Mathus
- renewable resources
- nonrenewable resources
- open access property
- externalities
- positive externality
- social marginal costs (SMC)
- negative externality
- sustainable tourism
- sustainability
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- mass tourism
- command and control regulations
- tradeable rights and permits
- carrying capacity
- physical carrying capacity
- perceptual carrying capacity
- economic carrying capacity
- ecological carrying capacity
- environmental impact assessment
- willingness to pay
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