Tourism and Climate Change: Issues and Solutions

Tourism and Climate Change Ecotourism and Sustainable Tourism Conference 2008

strategic transportation & tourism solutions

Prepared by Joe Kelly Director, Environmental Services InterVISTAS Consulting, Inc.

October 2008

A Changing Climate ƒ Carbon dioxide & other greenhouse gases from human activities are changing the climate ƒ Climate change poses serious risks for businesses ƒ Fossil fuel intensive industries are most at risk

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A Personal Memory

Ken Read on his way to winning Hahnenkamm downhill in Kitzbuhel, Austria in 1980

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The Current Reality

Kitzbuhel, Austria, January, 2007 – less than two weeks before Hahnenkamm downhill

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Is Tourism a Victim or Culprit?

"Making selfish choices such as flying on holiday or buying a large car are a symptom of sin.”

"Sin is not just a restricted list of moral mistakes. It is living a life turned in on itself where people ignore the consequences of their actions."

• Richard Chartres Bishop of London

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Tourism – The Culprit

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Tourism’s Contribution Tourism’s contribution to global climate change is ~5% in terms of CO2 emissions Air travel accounts for ~40% of the tourism contribution of CO2 Air travel accounts for ~60% of the international tourism contribution of CO2 and is overwhelmingly dominant at medium- and long-haul

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Whistler’s Carbon Footprint Whistler’s CO2 Emissions

Internal

~ 14%

~ 86%

2030

Visitor Travel to/from Whistler

Aviation emissions account for ~78% of all emissions Internal GHG reductions dwarfed by air travel emissions 7

Source: Kelly & Williams, 2007

Tourism’s Challenge Travel is a prerequisite for tourism

HOWEVER‌

It challenges the concept of sustainability the most

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Global Tourism Emissions Global Tourism’s CO2 Emissions , 2004

CO2 (Mt)

%

Air Transport

517

40%

Other Transport

468

36%

Accommodation

274

21%

Activities

45

3%

1,307

100%

Total Emissions

Source: UNWTO, Climate Change and Tourism, 2007

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Good News – Efficiency Gains 0.9

CAGR : -1.9%

0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1

2004

2003

2002

2001

2000

1999

1998

1997

1996

1995

1994

1993

1992

1991

1990

1985

0.0 1980

CO2 Emissions per Passenger Mile - Pounds

US Domestic Aviation CO2 Emissions per Passenger Mile 1980 – 2004

Year

Source: US Bureau of Transportation Statistics National Transportation Statistics 2007.

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But Rapid Growth in Air Travel US Domestic Air Travel 1980 - 2004 700

Passenger Miles (Billions)

600

500

4.0% : R CAG

400

300

200

100

2004

2003

2002

2001

2000

1999

1998

1997

1996

1995

1994

1993

1992

1991

1990

1985

1980

0

Year

Source: US Bureau of Transportation Statistics National Transportation Statistics 2007.

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Total Emissions Climb US Domestic Aviation CO2 Emissions 1980 - 2004 Total CO2 Emissions - Billions of Pounds

400 350

2.0% CAGR:

300 250 200 150 100 50

2004

2003

2002

2001

2000

1999

1998

1997

1996

1995

1994

1993

1992

1991

1990

1985

1980

0

Year

Source: US Bureau of Transportation Statistics National Transportation Statistics 2007.

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Aviation Emissions Growing Faster than Total Emissions US CO2 Emissions Annualized Growth Rate 1980 - 2004

2.0% Aviation Transport Total

1.6% 0.9% 0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

Annual Percentage Change

Sources: US Bureau of Transportation Statistics National Transportation Statistics 2007 and OECD

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Projected Growth in Air Travel Air transport is one of the fastest-growing sectors of the world economy 2006 and 2007 forecasts by Airbus, Boeing and the Airports Council International (ACI) predict that there will be almost unprecedented growth in aviation markets over the next 20 years ACI’s 2007 forecast stated that the number of air travelers will double by 2025 to more than 9 billion per year, which corresponds to an annualize growth rate of 3.9% Source: The Hodgkinson Group, Strategies for Airlines On Aircraft Emissions and Climate Change: Sustainable, Long - Term Solutions

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Projected Growth in Air Travel

Source: Boeing 2007 Current Market Outlook

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The Future – A Larger Share of a Larger Pie US CO2 Emissions 2005 vs. 2030

Aviation

~ 4%

2005

~ 5.5%

Aviation

2030

Aviation emissions will increase 65% by 2030

Total emissions will increase by 25% by 2030 16

Source: Energy Information Administration

Tourism – The Victim

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Direct Physical Risks Damage to physical assets Increased insurance premiums Decreased property values (e.g. weatherdependent businesses) Forced relocation of operations

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Direct Physical Risks ƒ Alpine ski resorts below 1,050 metres will no longer be viable with natural snow within 20 years ƒ Glaciers will all but disappear within 45 years and all but the highest Alpine ski resorts will close Source: Organization for Economic Co-operation and Development (OECD)

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Indirect Risks – Consumer Response/Backlash

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Indirect Risks – Rising Energy & Commodity Prices

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Indirect Risks – Government Regulation It will not take long for the government to step in and impose changes This will most likely come in the form of increased taxes and/or carbon trading schemes US General Election will bring new regulatory framework on climate change

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Is Tourism Prepared?

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Solutions

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New Aircraft Technology Boeing 787 Dreamliner

Scheduled to enter service in 2009

Boeing’s first new aircraft since launching the 777 in 1990

Airbus A350

Scheduled to enter service in 2013

Long-range, mid-sized, wide-body aircraft 25

Winglets

26 Source: Airliners.net http://www.airliners.net/open.file/1060096/L/

Blended Wing Body

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Technology is Not Enough A study by the Intergovernmental Panel on Climate Change (IPCC) concluded that “the increase in aviation emissions attributable to a growing demand for air travel would not be fully offset by reductions in emissions achieved through technological improvements alone”

Source: US General Accounting Office, “Aviation and the Environment: Aviation’s Effects on the Global Atmosphere Are Potentially Significant and Expected to Grow”

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Government Responses BC’s new carbon tax The EU plans to add aviation to its Emissions Trading Scheme (ETS) starting in 2012 Starting in 2009, the UK intends to replace air passenger duty with a “per flight” tax based on carbon emissions Cap & trade legislation inevitable regionally if not nationally 29

Fuel Switching

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Carbon Offsets CO2 emissions countered by financial contributions to projects that reduce emissions elsewhere

Energy efficiency projects Renewable energy projects Tree planting (suspect)

Voluntary offsets will mitigate negative economic impacts

Most price sensitive will not volunteer

Carbon offsetting provides a viable “transition strategy” until more permanent solutions are feasible 31

Current Aviation Offset Programs Mandatory (100% participation) SilverJet (business travel b/w New York, London, and Dubai) Harbour Air (North America’s first carbon neutral airline) NetJets (private jet company)

“Opt-in”

Qantas Group (~10% participation; includes ground-related emissions) BA Lufthansa/SAS Delta Continental Air Canada Many others 32

Credibility is Key Reasons for non-participation

39%: costs too high

36%: concerned that funds would not be used effectively

23%: offset projects might not be effective

6%: offsets not needed

2%: payment should be mandatory for all, not voluntary

Source: “Destination Carbon Offsetting: A Behavioural Assessment”; Dr. Joe Kelly, Peter Williams, Wolfgang Haider

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A Successful Offset Program = Choose high quality offsets that:

Are additional Are verified by a third party Provide lasting environmental benefit Are socially beneficial

Fully integrate offset scheme in marketing, communications and booking systems Use transparent communications that demonstrate:

Efficient use of funds Credibility of offset projects 34

Growing Market Opportunity 2003 study by the Travel Industry Association of America and National Geographic Traveler found:

11% of US travelers consider environmental factors when deciding which travel companies to patronize

38% of them would “pay more” to use travel companies that strive to protect and preserve the environment

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Harbour Air North America’s first carbon neutral airline, since October 2007 Revenue has improved 12%, driven largely by increased market share Despite rising fuel prices and introduction of carbon tax in British Columbia 37

Get in Front of the Market 1.

2.

3.

Measure Carbon Footprint

Visioning/ Strategy

Establish Targets Plan and Implement Reduction Strategies

4.

Purchase Carbon Offsets

5.

Communicate Successes

Communication

Audits Internal Engagement

Evaluation/ Monitoring

Planning

Implementation

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Big Opportunities Come From Bold Actions New market opportunities & brand value Strategic leadership Competitive advantage Lower operating costs Adapting to or avoiding emerging regulations

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Thank You www.InterVISTAS.com

strategic transportation & tourism solutions

InterVISTAS Consulting InterVISTAS Consulting:

80 team members Broad range of marketing, security, facilitation, planning, economics and environmental services Headquartered in Vancouver, with additional offices in Winnipeg, Ottawa, Toronto, Washington, Chicago and London

Part of the DHV Group, with sister companies:

NACO Delcan Innova 41