By Eric Crampton 20/12/2019


But in reality: “value-led tourism growth may actually worsen those pressures that are linked with consumption. Higher-value visitors, by definition, consume more goods and services, all of which have an associated greenhouse gas and solid waste footprint. To the extent that these goods and services are relatively energy intensive (e.g. car rather than bus travel, hotel rather than campground accommodation, helicopter rides rather than hiking), high-value visitors will again have a relatively large greenhouse gas footprint.”

While the report concludes it is possible for smaller number of wealthier tourists to put less pressure on wastewater and waste disposal services, that only works if the total number of visitors falls.  “Any such improvement relies crucially on any growth in higher-spending tourists being accompanied by
 a reduction in their lower-spending peers. It is far from clear that this is the intention. The New Zealand-Aotearoa Government Tourism Strategy states that “we want the value of tourism to continue to grow faster than volume”, but provides no mention of limiting volume itself.”

Time to limit cruise ship visits?

Responding to Upton’s office’s report, Michael Lueck, a professor of tourism at AUT’s School of Hospitality & Tourism, said the government should consider outright caps. “It appears that the main problem is the sheer number of tourists, and we need to look at slowing this growth. The often cited ‘high-value tourism’, or ‘quality over quantity’ does not always work, but it would be fairly easy to, for example, limit the number of cruise ships coming into the country. These put a disproportional burden on New Zealand’s infrastructure, environment, and culture, while the economic benefits are comparatively small,” he said.

When we think about domestic issues [emissions from international travel are their own mess needing international agreement], and remember that we have an ETS that’s moving to a binding cap, the implications change.

It isn’t that tourists would then increase NZ’s net emissions; it’s rather that they bid up the price of carbon and you could then imagine potential equity concerns in the same way that there could be equity concerns if international tourists had disproportionate effect on other rivalrous goods that are in absolutely fixed or declining supply.

But the solution to none of that is capping tourist numbers. You don’t solve equity issues by mucking about on that side; you do it instead by finding ways of providing transfers to those on the short end of that equity stick, which they can then use however they like. If richer foreign tourists can outbid kiwis for things kiwis enjoy and are in fixed supply (like carbon credits), then you need to find ways of providing side-payments – transfers from the winners to the losers.

If tourists bid up the price of carbon, and emitting industries like agriculture were provided initial allocation units, then the increased price can increase the cost of farming but that’s offset by an increase in the value of the allocated units – so that has the compensation built right in.

Crown sales of NZU into the system ultimately for purchase by foreign tourists at the fuel pumps could provide cash that could be used to provide other side-payments.

There’s a strong case for getting more tourist-facing facilities onto a proper user-pays basis, with potential for price differentiation between foreign and domestic visitors – like charges for access to national parks that apply to foreign visitors. Some of the things that seem to be in fixed supply around national parks seem more like a policy decision neither to properly charge for access nor to fund the facilities to meet demand at the going price. Letting prices work would allow effective supply to increase and would provide basis for some of those side-payments.