Aviation’s inclusion in international climate policy regimes: Implications for the Caribbean tourism industry

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Abstract

Nations with tourism dependant economies are becoming increasingly concerned about the inclusion of aviation in greenhouse gas mitigation policy for international bunker fuels and more recently adaptation policy proposals. The central concern is that such policies will increase the cost of traveling by air, therefore reducing visitor arrivals to long-haul, tourism-dependent destinations, often small island developing states. This study used a tourism arrivals model to examine the implications of currently proposed climate policies for the world’s most tourism dependant region – the Caribbean. Results indicate that under current proposals for both mitigation and adaptation focused climate policy, reductions in tourist arrivals from the major markets of Europe and North America would be negligible versus business as usual growth projections Only under the most stringent mitigation policy scenario. Which may portend a post-2020 policy regime, is a significant decrease in tourist arrivals predicted. Of the climate policies assessed, the adaptation policy had the potential to provide greater economic benefits to the Caribbean region.

Research highlights

► The results indicate that until deeper emission cuts and higher carbon costs are implemented in mitigation policy there will be no meaningful impact on the growth of arrival numbers to the Caribbean. ► Of the climate policies assessed, the adaptation policy had the potential to provide greater economic benefits to the Caribbean region. ► The adoption in the Caribbean region of the International Air Passenger Adaptation Levy proposal is unlikely to significantly affect tourism arrivals in a negative way, with the potential bonus of providing significant adaptation funding to the region.

Introduction

The world’s small island developing states (SIDS) are estimated to contribute less than 1% of global greenhouse gas emissions (GHG), but are projected to be some of the most impacted by a changing climate (Mimura et al., 2007). Their vulnerability has been explicitly recognized in Article 4.8 of the UN Framework Convention on Climate Change which states that, ‘…the Parties shall give full consideration to what actions are necessary under the Convention… to meet the specific needs and concerns of developing country Parties arising from the adverse effects of climate change and/or the impact of the implementation of response measures, especially on: (a) small island countries, (b) countries in low-lying coastal areas … (d) countries prone to natural disasters …’ (United Nations, 1992).

To date, much of the focus on SIDS has been with regards to their vulnerability to the physical impacts of climate change, such as sea level rise, water resources, coral reefs, and fisheries, but the implications of climate policy for the economies of these nations are another potentially salient impact in the shorter term. The implications of international GHG mitigation policy for bunker fuels and thus transportation costs and tourism are of particular consequence for increased prices on goods being imported by air as well as the potential decline in number of tourist arrivals and expenditures.

The Caribbean SIDS are thought to be highly vulnerable to climate change (Mimura et al., 2007). The Caribbean is also arguably the most tourism dependant region in the world, as tourism represents over 12% of GDP in the region and exceeds 50% GDP in several nations (World Travel and Tourism Council, 2007, UN Department of Economic and Social Affairs, 2010). The tourism economy is also thought to be one of the greatest at risk to climate change (Gossling and Hall, 2006). Regional leaders and the tourism industry have voiced their concern that international climate policy will negatively affect their tourism economy, and in response to the European Union’s (EU) announcement that aviation would be incorporated into it Emissions Trading System (ETS), the Caribbean Hotels Association and Caribbean Tourism Organization (2007), Put forth a joint statement emphasizing that every effort must be made to ensure that future consumer movements and government action in the EU to address climate change … does not deter potential European travellers from taking vacations in the Caribbean”. Similar statements have been put forth by concerned nations in the South Pacific as well as by Australia and New Zealand (Forsyth et al., 2007, Scott et al., 2008).

Efforts to include the aviation industry in climate change mitigation policy have come about as an understanding of the contribution air travel makes to global GHG emissions and radiative forcing has increased, and despite energy efficiency and emission reduction gains within the aviation sector (Peeters and Middel, 2007). With projected growth rates in revenue passenger kilometres of 5% annually (Boeing, 2008), aviation’s contribution to total global GHG emissions could undermine mitigation efforts undertaken by other sectors (Bows et al., 2009, Clark, 2009, Lee et al., 2009). Climate policy proposals have also emerged whereby air travel is used as a mechanism to fund climate change adaptation in developing countries. An example is the International Air Passenger Adaptation Levy (IAPAL)1 which has been proposed by the Group of Least Developed Countries as a way to increase contributions to the Kyoto Protocol Adaptation Fund. IAPAL is projected to raise between $8 and $10 billion dollars annually (in the first five years of operation) for adaptation projects in the poorest countries. The International Air Transportation Association, (2008) (IATA) has expressed concern over this proposal because they believe that the extra cost would cause lost tourism revenues for many island nations (Greenaironline, 2009). Other mitigation proposals continue to emerge in the wake of this increasing concern over aviation’s contribution to climate change.

The objective of this study was to determine whether the current proposals to include international aviation in climate change mitigation or adaptation policy could cause a decline in tourist arrivals that would be significant enough to adversely affect the economies of the Caribbean nations. A tourist arrivals model was used to assess the potential impact of different climate change policy scenarios on tourist arrivals from major markets in EU and North America (NA) to individual Caribbean nations over the next decade. Following a description of the methodology, region-wide results are presented and the differential impacts for individual countries discussed. The paper concludes with a comparison of the relative benefits of the disparate policy proposals for Caribbean nations.

Section snippets

Methods

Gossling et al. (2008) were the first to examine the impact of aviation sector mitigation policies on flight costs and tourist arrivals to SIDS around the world. This study is conceptually similar to Gössling et al. in that it uses the economic measure of price elasticity as the determinant of a person’s reaction to a change in the price of a roundtrip plane ticket, but it is operationalized in a very different way. Some of the major differences between the two studies include: this analysis

Results

Fig. 1 illustrates a timescale of visitor arrivals under a BAU scenario as well as under scenarios A, B and C. Declines in tourist arrivals through to 2020 versus the BAU scenario, ranged from 1.3% to 4.3% under scenario A and B, and as much as 24% under scenario C. Model results indicate that until a more rigorous climate mitigation policy is undertaken, the impact on tourist arrivals to the Caribbean region will remain negligible.

Although scenarios A and B had only a relatively small

Conclusions

The major findings of this study are twofold. First, the results indicate that until deeper emission cuts and higher carbon costs are implemented in mitigation policy, as was demonstrated in Scenario C, there will be no meaningful impact on the growth of arrival numbers to the Caribbean. This result is consistent with work done by Gössling et al. (2008) and other studies that have examined the impact of mitigation policy on air travel (Rothengutter, 2009). Even still, any reduction in arrivals

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