Tourism Industry at Risk: The Economic Impact of Climate Change

1. Tourism Industry at Risk: The Economic Impact of Climate Change Mr. Damani Thomas

2. Tourism Industry at Risk: The Economic Impact of Climate Change Climate Change Conference: Impacts on the Caribbean June 15-17, University of the West Indies, Mona Damani Thomas M.Sc. Economics Student, UWI, Mona

3. Outline of Presentation • The economic value of Jamaica’s tourism industry • The climate’s contribution to tourism • Expected impacts of climate change • Climate change impacts on demand for tourism • Projected costs of climate change to the tourism industry • Mitigation and Adaptation • Recommendations

4. The economic value of Jamaica’s tourism industry • Tourism has been the largest foreign exchange earning sector over the past decade, generating over US$1 billion per annum • Tourism industry accounts for approximately 7% of GDP • Tourism industry accounts for approximately 10% of the employed labour force • Tourism industry provides an important impetus for growth in other sectors • Each $1 spent in the tourism industry generates another $1 of output in the other sectors Source: McCatty and Serju, 2006

5. Multiplier Effect per $1 spent in the Tourism Industry on Other Sectors Source:McCatty and Serju, 2006

6. Climate’s contribution to tourism • Climate is an important component of the island’s tourism resource base • Jamaica’s tourism product is based primarily on its tropical climate and coastal resources • Tourism industry is therefore highly susceptible to the direct and indirect impacts of climate change

7. Expected impacts of climate change • - Sea level rise • Saline intrusion into freshwater • aquifers • Coastal flooding and erosion • - Increased temperatures • Heat stress • Coral bleaching • Biodiversity loss • Increased emergence of vector borne • diseases

8. Expected impacts of climate change (cont’d) • Changes in rainfall patterns • Droughts or floods • Decreased fresh water availability • Increased intensity of storm activity • Direct damage of infrastructure • Loss of lives

9. How climate change impacts will affect tourism • Direct damage to tourism plant and natural resources Hotels • Coral reefs • Beaches • Loss of attractiveness of the region as a • destination • Impacts on health – emergence of dengue, malaria, etc. • Reduced dive tourism if coral reefs are damaged • Loss of employment in the industry • Increased insurance costs for properties in • vulnerable areas

10. Climate change impacts on tourism demand • Promotion of tourism based on sun, sea and • sand • Climate change will lead to a deterioration of these • resources • Visitors will be less attracted to island as a tourist • destination • Climate change therefore puts a downward pressure on • the island's tourism demand

11. Climate change impacts on tourism demand • Jamaica’s major tourist market is north America • North America accounted for approximately 80% of tourist • arrivals over the past 5 years • Rising temperatures as a result of ongoing climate change • will lead to milder winters in north America • This in turn, will remove the need for some visitors to visit • the island

12. Projected costs of climate change to the tourism industry Without the necessary mitigation and adaptation strategies, expected losses for the Jamaican tourism industry are:- • Low Probability scenario up to 2050 • reduced tourism – US$44.2 • loss of beaches – US$23 • replacement – US$1.5 • lost dive-,eco-tourism – US$2.2 • Total expected losses – US$70.9 Figures: 1999 US millions Source: King, 2003

13. Projected costs of climate change to the tourism industry • High Probability scenario up to 2050 • reduced tourism – US$134.4 • loss of beaches – US$199.7 • replacement – US$12.9 • lost dive-,eco-tourism – US$6.7 • Total expected losses – US$353.7 Figures: 1999 US millions Source: King, 2003

14. Mitigation and Adaptation Firstly, we must recognise that tourism is a major contributor to GHG emissions. Mitigation srategies must therefore include reducing the industry’s emissions. • Sea level Rise • seawalls • preservation of natural sea defences (e.g. coral reefs) • prohibition of sand mining • Water • de-salinization • water harvesting • drip irrigation • Tourism Demand • diversification of tourism offerings (e.g. green and heritage • tourism

15. Physical Infrastructure • energy efficient building designs • facilities that incorporate future climate • change • increased insurance costs should be • factored into future profitability • Government Policy • fiscal incentives for compliance • land use planning • coastal defence • Adaptation and Mitigation will require significant capital outlay and political will, however the long run benefits far outweigh the short run costs.

16. Recommendations • A urgent need exists for sustainable tourism development • that incorporates climate change mitigation strategies • Regional petition of the governments of developed • countries to reduce GHG emissions • Promotion of green tourism • Energy savings by industry • Private and public partnership to formulate and implement • tourism plan that takes climate change into • consideration • Future promotions should be based primarily on increasing • tourist’s spending and their average length of stay

17. Thank you