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Problems in Use of Economic Instruments to Reduce Adverse Environmental Impacts of Tourism

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  • Peter Forsyth

    (Department of Economics, University of New England, Armidale, NSW, Australia 2350)

  • Larry Dwyer

    (Department of Economics and Finance, University of Western Sydney, Macarthur, PO Box 555, Campbelltown, NSW, Australia 2560)

  • Harry Clarke

    (Department of Economics, Latrobe University, Bundoora, Victoria, Australia)

Abstract

Economic instruments are often proposed as effective means of environmental control – as ways of achieving an efficient balance between environmental and other objectives. By imposing charges or quantitative restrictions, it is possible to achieve an optimal level of usage of resources which reflects environmental costs and the benefits to the users. This paper argues, however, that there are often significant limitations to using economic instruments, such as user pays, as a means of optimizing the environmental trade-offs which may be created by tourism, or as a means of minimizing the cost of meeting environmental constraints. The paper begins with an outline of some adverse environmental impacts of tourism. It then discusses the different instruments that might be used to control them and the criteria for choosing between them. The problems that may arise in using these instruments in tourism contexts are then examined. The paper concludes that while economic instruments may be appropriate in many situations, in some circumstances they will not be effective and other mechanisms, such as codes of environmental conduct, will play an important role in environmental protection.

Suggested Citation

  • Peter Forsyth & Larry Dwyer & Harry Clarke, 1995. "Problems in Use of Economic Instruments to Reduce Adverse Environmental Impacts of Tourism," Tourism Economics, , vol. 1(3), pages 265-282, September.
    • Handle: RePEc:sae:toueco:v:1:y:1995:i:3:p:265-282
    DOI: 10.1177/135481669500100304
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    Cited by:

    1. Antošová Gabriela, 2016. "Cultural Rural Development in the Czech Republic (Case Study of the Liberec Region)," European Countryside, Sciendo, vol. 8(3), pages 263-277, September.
    2. Ming-Chieh Wang & Chang-Sheng Wang, 2018. "Tourism, the environment, and energy policies," Tourism Economics, , vol. 24(7), pages 821-838, November.
    3. Peter Forsyth & Larry Dwyer, 2002. "Market Power and the Taxation of Domestic and International Tourism," Tourism Economics, , vol. 8(4), pages 377-399, December.
    4. Davis, Derrin & Gartside, Donald F., 2001. "Challenges for economic policy in sustainable management of marine natural resources," Ecological Economics, Elsevier, vol. 36(2), pages 223-236, February.

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