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chapter 3 .Towards investment and financing for sustainable tourism

investment and finance has an authoritative function to play in supporting the transition to low carbon, resource efficient and socially inclusive tourism growth. This chapter examines the need for a chemise toward investment and financing practices that support sustainable tourism, and explores policies, institutions and instruments for green finance and investment relevant for the sector. It highlights good practices that catalyse and support the conversion to a park, low-emissions and climate-resilient tourism economy, and offers guidance to policy makers on how to move forward .
   The statistical data for Israel are supplied by and under the province of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international jurisprudence.

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tourism, as one of the most promise drivers of growth for the world economy, can play an significant role in driving the transition to a green economy, and contributing to more sustainable and inclusive increase. With close connections to numerous sectors at address and international levels, even small improvements toward greater sustainability in tourism will have important impacts .
investment and financing is an substantive part of this. The possibilities are wide-ranging, and include public and secret investing in low carbon ecstasy options and the construction of resource efficient tourism infrastructure, adenine well as initiatives to support invention, promote the borrowing of responsible commercial enterprise practices and encourage the integration of tourism businesses into low carbon paper and sustainable tourism add chains ( Box 3.1 ) .

Box 3.1.

Investment opportunities to support fleeceable initiation in tourism
Energy-efficient transition: in the accommodation sector there is ample telescope for investments in green performance, including improvements to refrigeration, television and video recording systems, air stipulate, heating system and laundry .
Water management: there is oscilloscope for financing green performers improving home water efficiency per node .
Waste management: there are many dimensions on which improving waste management can increase tourism sustainability, improving resource efficiency, enhancing the attractiveness of destinations, and creating job opportunities .
Biodiversity: maintaining ecosystems is at the core of sustainable tourism. There are opportunities for green performers and park innovators in protecting the lifelike resource al-qaeda while mainstreaming sustainable tourism .
Cultural heritage: investments that maintain the cultural inheritance while offering opportunities for lengthiness, rejuvenation or enhancement of traditions improve the tourism offer and contribute to distributing the benefits of tourism among the local population .
source : OECD ( 2013a ) .
This chapter examines the indigence for a transformation toward investment and finance practices that support sustainable tourism, and explores policies, institutions and instruments for green finance and investment relevant for the sector. It highlights good practices that catalyse and support the transition to a green, low-emissions and climate-resilient tourism economy, and offers guidance to policy makers on how to move forward .

Policies to address the investment gap for sustainable tourism development

sustainable tourism development is tourism which takes into account current and future economic, sociable and environmental impacts, and addresses the needs of visitors, the industry, the environment, and host communities. Incorporating sustainable practices in consumption and production of tourism services implies a change in the mentality of stakeholders, increasing awareness of the fact that incorporating sustainable practices in their day by day activities is for their own benefit in the farseeing run, as it enables the preservation of the environment that is one of the chief drivers of tourism .
With the firm prognosis growth in ball-shaped tourism to 2030, meaning investment will be required to provide the accommodation, ecstasy and other tourism-related services and infrastructure necessity to meet ask demand, while enhancing economic, sociable and environmental outcomes. This will require an integrate approach across many departments ( e.g. transport, environment, agribusiness, invention, education, tourism ) and levels of government ( national, regional, local ), with remark and support from diligence. Investment will besides be critical in managing this growing tourism in a sustainable manner .
The OECD is working to strengthen the investment environment and better mobilize public and private resources to support bouncy, sustainable, green and inclusive growth which benefits the whole of club. With public budgets likely to remain taut for some time to come, all levels of government will have to do better with less by investing more efficiently ( OECD, 2014 ). There is besides a growing realization of the need for more advanced and sophisticate financing strategies, and governments are searching for modern tools with a stronger concenter on the private sector .
Like many other sectors, tourism faces a range of meaning sustainability-related challenges. however, with growing awareness of the necessitate and value of conserving singular natural, social and cultural assets, there is increasing motivation for both the individual and public sectors to invest in making tourism more sustainable. investment in sustainable tourism offers environmental and sociable benefits, a well as opportunities to generate significant returns, notably in the areas of energy, water, waste and biodiversity .
Public sector intervention aims to preserve tourism ’ s potential for economic development and social inclusion, and discipline for actions that lead to excessively much investment in polluting technologies and excessively little investing in low-carbon, climate-resilient or resource-efficient technologies. The gamey environmental timbre that attracts tourists can frequently be diminished by those lapp tourists and the services that cater to them, through increased pollution and the depletion of natural resources, water and biodiversity, among others .
Another area of stress is devising allow mechanisms to leverage private investment, particularly as government budgets tighten. investing and financing for sustainable tourism development does not necessarily require the initiation of raw instruments, but rather better connecting tourism projects with available green and other financing instruments. Traditional and advanced finance mechanisms exist that integrate tourism intrinsic characteristics ( i.e. seasonal flows, intangibles production ), from criterion debt finance which is the main external finance source for minor tourism firms, to fairness and hybrid instruments favoured by high-growth and innovative firms. Finance mechanism can besides be extrapolated from other industries that rely on ( renewable ) natural assets and from other policy objectives, such as group lend by microfinance institutions .
In arrange to achieve more sustainable development and deliver on the ambitious targets to reduce poverty and battle climate change set out in Agenda 2030 and the Paris Agreement, investment in the fleeceable economy needs to take home on a far greater scale over come decades. indeed, the Paris Agreement established the goal of “ making fiscal flows reproducible with a pathway towards first gear greenhouse gas emissions and climate-resilient development ”. The scale of the transition to a park, low-emissions and climate-resilient economy is possibly the biggest structural adjustment ever proposed in the plain of international administration .
tourism has a key function to play in this, and the sector is peculiarly well placed to contribute to increasing use rates, enhancing social coherence, improving productivity and fostering economic increase across many portfolios, given its strong local property. furthermore, the cross-cutting nature of tourism means that tied small improvements towards greater sustainability in production and pulmonary tuberculosis patterns will have important impacts .
Financing the conversion to a more sustainable exemplar of tourism development faces a determined of challenges, however, including the suitability of available finance instruments, information on the impact of green investment in tourism, ( dis ) incentives to adopt green business practices, and the extent to which the policy framework is supportive. successful policy interposition requires significant co-operation and coordinate strategies across government, and between different levels of government, as part of a comprehensive national long terminus design, given the length of time needed to realise many environment conservation measures. It besides demands the engagement of the private sector and civil society, and the sharing of best practices and newly ideas between the assorted actors driving the shift to a new model of sustainable tourism development .

Policy considerations

Based on the analysis discussed in this chapter, key policy considerations to foster promote and mainstream investment and financing for sustainable tourism development admit :

  • Promote access to finance for sustainable tourism investment projects of all sizes. Direct public intervention includes grants and subsidize loans with environmental criteria to support tourism firms with sustainable project proposals in the start-up and early on stages, american samoa well as businesses will to incorporate sustainable practices in their casual operations. Encourage uptake of green financing instruments for tourism projects. Tailored supports for humble tourism businesses may be warranted where such interposition supports environmental and sustainability objectives. Care should be taken to avoid crowding out the secret sector. indirect finance instruments ( populace credit guarantees ) can be used to overcome the miss of collateral related to the product of service-based intangibles, and the passage towards green processes. Consider promoting populace secret partnerships to finance sustainable infrastructure investments and renovations. Devising risk-sharing mechanisms to foster private sector engagement in the finance of sustainable tourism development can besides help .
  • Incentivise the transition towards low carbon, climate resilient investments and encourage more responsible business practices
    in tourism.
    Private sector strategies can help to address the sustainable tourism investment col and green investors should be actively targeted and supported. tourism businesses need to be good informed about the business character for adopting sustainable practices, and encouraged to take into explanation the impact of their actions on the environment. Integrate environmental and social criteria into tourism policies and programmes, including tourism investment facilitation and promotion activities. If it is necessity to introduce measures to constrain environmentally harmful activities by tourism firms, for case by establishing congestion prices or taxes, the likely distortions these policies might generate should be considered .
  • Build capacity and better coordinate actions across government to support the shift to more sustainable tourism investment
    and financing practices.
    A coherent and consistent policy framework is needed to provide an enable environment for sustainable tourism investing. This involves coordinating actions across different policy areas, including tourism, environment and invention, and across different levels of government. Improve accountability by assessing the impact of sustainability factors upon fiscal constancy and long-run investment. Identify and partake cognition about approaches to increase the potency of investment in managing growing tourism demand in a sustainable and inclusive manner .
  • Improve data and analysis on finance and investment in sustainable tourism development, including the use of green finance
    in tourism.
    express information is available on the potency of available finance instruments and incentives in supporting more sustainable output processes and encouraging more creditworthy business practices in tourism. More tell is besides needed to accurately integrate environmental risk into the tourism financing and investment decision, and develop a better understanding of the economic, social and environmental outcomes of tourism investment. Standardising definitions of park finance and the environmental goods and services related to tourism can be used to tag lending amounts to sustainable tourism development objectives .

Financing sources for sustainable tourism investment

The financing options for tourism investment can be of public or private, and domestic or extraneous beginning. In the by, there has been a miss of diverseness in fiscal institutions offering long term capital for the sustainable financing needs of tourism firms, including little and medium sized enterprises ( SMEs ) ( United Nations Environment, 2017 ), and the magnitudes traded for sustainable tourism development at a global level are still not significant .
This situation is changing. There is increasing motivation for both the populace and private sectors to invest in making tourism more sustainable, and the market for green bonds and other sources of green finance is expanding. In Finland, for example, 25 % of european Regional Development Funds are being directed toward low-carbon activities over the menstruation 2014-20. New and expanding occupation opportunities have been financed that reduce carbon paper emissions, including in the hotel sector. The United Nations Environment Programme Finance Initiative, meanwhile, brings together over 200 fiscal institutions, including banks, insurers and investors committed to integrating environmental and social considerations into all aspects of operations, some of which fund tourism ( Box 3.2 ) .

Box 3.2.

Support for tourism through the UN Environment Programme Finance Initiative
United Nations Environment Programme Finance Initiative is a partnership between UN Environment and the global fiscal sector with the mission to promote sustainable finance. Participating fiscal institutions, including banks, insurers, and investors sign up to the UNEP Statement of Commitment by Financial Institutions on Sustainable Development, with specific funding programmes provided for sustainable tourism :
Triodos Bank, for case, provides loans to sustainable tourism businesses to invest in property purchase and exploitation, on-site renewables and green tourism accreditation. It has supported the exploitation of sustainable hotels in the United Kingdom, including providing a loan to Wheatland Farm to install a wind instrument turbine to might the Balebarn Eco Lodge. Triodos Bank merely lends to businesses that have been or are in the process of being, green Tourism-certified. It provides a 1 % concern rate dismiss for businesses working towards aureate certification. Another example is the fund provided to Biosphere Responsible Tourism, a authentication arrangement for sustainable destinations .
Turkish Development and Investment Bank ( TSKB ) provides finance and consultancy services for green build investment in the tourism sector. It funds investment in energy, urine and consume management, green material usage, and social impact management. The tourism sector makes up 8 % of the TSKB credit portfolio, with an allocated credit of EUR 309 million and 24 new hotel and renovation investments .
source : UN Environment, www.triodos.com, www.tskb.com .
Public sector involvement in finance sustainable tourism development is necessity, to unlock finance, provide incentives and build capacity. This is demonstrated by the activities of supra-national, national and sub-national public finance institutions, including park investment banks which target and tailor finance to facilitate private investment in depleted carbon climate bouncy infrastructure. A broad typeset of finance instruments is besides important, ranging in profile from low to high risk/return, and catering to firms at different stages of development .
Public finance institutions have a development mandate beyond economic and fiscal viability, and can extend subsidies and other supports to environmental and social projects. Institutions operating at regional or local charge are particularly well placed to overcome location-specific investment barriers, while multi-lateral finance organisations can scale up and diversify the implicit in environmental hazard by joining respective environmental projects in different countries .
The Nordic Investment Bank, for model, finances the exploitation of sustainable projects of all sizes in the Baltic region, including park road infrastructure projects in Finland and environmental projects for SMEs in Norway. As of October 2017, five tourism-related projects are financed. In Norway, the City of Bergen has a 20 class loan plan of EUR 108 million to finance the effluent treatment organization, where tourism is growing. The city welcomes about 500 000 visitors and 350 cruises per annum. In Iceland, the tourism sector benefits ( along with fisheries, real estate of the realm and farm ) from a EUR 66.6 million loan program over 7 years to finance investments and environmental projects for SMEs, ampere well as a 10 year lend program worth EUR 12 million to finance R & D and ICT infrastructure .
The European Union has implemented diverse initiatives to support the growth and forwarding of sustainable and responsible tourism. The european Commission supported around 100 projects over the period 2014-2016, under the Programme for the Competitiveness of Enterprises and Small and medium-sized Enterprises ( COSME ), for example. These include the development of multinational cycle or hike routes, environmentally-friendly tourism, and european Cultural Itineraries. In the context of the european Destinations of Excellence ( EDEN ) inaugural, the Commission co-financed with national administrations the promotion of 140 lesser-known destinations which stand out for their sustainable tourism employment. Beyond this, the tourism sector can benefit from wide sustainable investment supports promoting the low carbon economy, sustainable energy and sustainable management of natural resources, including the european Structural and Investment Funds 2014-2020 and the European Fund for Strategic Investments. A Guide on EU Funding to the Tourism Sector has been developed by the Commission to help those in want of investment finance to identify the different available sources .
Public sector intervention can be conduct, such as financing or co-financing sustainable tourism projects, or creating and investing in companies that bring in processes or services that reduce negative environmental impacts while increasing productiveness. Canada, Finland, France and Singapore have introduced direct Cleantech initiatives, for example, but to go steady, the electric potential of such approaches to support sustainable tourism development remains untested .
In Spain, the Ministry of Energy, Tourism and the Digital Agenda, recently introduced a grant enterprise which allocates EUR 60 million to foster digitalization and energy efficiency consumption by using ICTs in local tourism destinations. The foremost capable call for proposals provides finance of up to a maximum of EUR 6 million per project, with co-participation from each firm of about 20-40 % of the request fund measure. This inaugural is partially funded by the european Regional Development Fund ( Box 2.4 ). A semiannual line of subsidies for energy efficiency in the hotels and adjustment sector was besides launched by the spanish Institute for Official Credit and the spanish Institute for Diversification and Energy Saving in 2017, with a budget of EUR 30 million .
More often, however, public sector intervention is collateral, to support private sector finance and investment. In this character, the fiscal instrument suitable for green projects can be double : either ceremonious debt and equity instruments that integrate environmental criteria, or innovative products to address the special needs of the fleeceable economy, such as option lend structures, property-linked efficiency financing and indemnity for green assets. This indirect treatment can be either subsidised, or at market rates to avoid crowding out the private sector, with the focus normally being the environmental solution rather than specific sectors, like tourism .
The rationale for such interventions is to provide fiscal and economic additionality, by offering instruments that the private sector does not provide, and by harnessing the development of sustainable tourism objectives through, for exercise, targeted green lend .
finance options through the individual sector include conventional debt, equity or loanblend instruments. Debt instruments, including loans, are a common informant of external financing for tourism businesses of all sizes, with hybrid instruments that combine debt and equity less used by tourism SMEs. Crowdfunding can be either debt- or equity-based, and holds strong electric potential for tourism. Innovations in the finance sector which reduce transaction and borrow costs, alleged “ fintech ”, are besides opening up new finance opportunities in tourism. Civil sector organisations besides act as a facilitator of private investments, through crowdfunding, venture capitalists, occupation angels, microfinance institutions, and channelling convinced shock finance helping to close the sustainable tourism investment gap ( e.g. responsible finance in the United Kingdom ) ( Box 3.3 ) .

Box 3.3.

Finance instruments for sustainable tourism development

Public instruments:

  • directly : includes creating or investing in companies that bring in processes or services that reduce negative environmental impacts while increasing productivity i.e. CleanTech ventures .
  • indirect : includes subsidize loans or grants, market-based loans ( targeting green lend, alternative loan structures, property-linked efficiency loans ), ( partial derivative ) credit guarantees, indemnity for green assets .

Private instruments:

  • market : includes debt finance ( loans, greens bonds, mini-bonds ), fairness and hybrid instruments ( mezzanine finance, crowdfunding ) and fintech innovations in the finance sector that reduce transaction and borrowing costs ( blockchain, learning algorithms, chic contracts ) .
  • shock investing : includes blended finance, positive impact finance, microfinance and rewards-based crowdfunding .

Challenges for sustainable tourism investment and financing

Financing the conversion to a more sustainable tourism model involves a number of challenges, which can be grouped along four main dimensions. On the add side, there is a lack of desirable finance instruments available for sustainable tourism projects. There is besides a motivation for standardized definitions around what constitutes “ green ” investing, as this is a critical component in promoting sustainable exploitation. On the need side, the incentives for firms of all sizes to adopt environmentally and socially sustainable practices are fallible, while the capacity of policy makers to design, coordinate, implement and enforce sustainable tourism development policies is besides an issue .

Availability of suitable finance instruments for sustainable tourism projects

The ability to finance large sustainable tourism investing projects ( e.g. hotels and resorts, attractions, transportation, enlistment operator and early services ) can be challenged by a lack of suitable finance instruments. One reason for this is a maturity mismatch : depositors and investors typically prefer to liquidate assets cursorily, with the solution that available finance instruments tend to be for a shorter term than the longer meter period required to realise the investing visualize and become profitable. This is particularly the event for infrastructure investments .
Financing small tourism projects presents challenges linked with their size which may require public intervention, as higher transaction costs ( related to humble volumes traded ) result in difficulties in accessing external finance ( OECD, 2006 ; 2013b ). regulative rigidities and an insufficient legal framework can besides obstruct the ability of the fiscal system to provide products adapted to the needs of little firms. This is peculiarly a challenge when firms are subject to seasonal flows, as with many tourism businesses .
For belittled and metier tourism enterprises bequeath to introduce sustainable practices into existing commercial enterprise operations, resource productivity investments or department of energy efficiency renovations might be catalogued as “ working capital ” requirements. These businesses may not possess the necessary collateral to secure external finance. The issue of collateral is particularly challenging as many tourism businesses are involved in the output of service-based “ intangibles ”, and it is not unclutter whether and how these intangibles can be used as collateral .
Another barrier is that the limited set of sustainable financing products available is focused on energy efficiency transitions, and overlooks early sustainable measures ( UN Environment, 2017 ). This may in region explain why the majority of examples of sustainable tourism projects identified in the work to prepare this chapter relate to energy efficiency, particularly in the hotel sector. It has proved more challenge to identify the use of fleeceable finance to support and encourage more divers investment projects throughout the tourism measure chain, including the universe of more sustainable tourism products, services and experiences .
furthermore, when finance is sought for sustainable tourism projects, the failure on the depart of finance institutions to take into account a full and accurate appraisal of the environmental risk in the finance decisiveness hinders the creation and adaptation of finance instruments to sustainable tourism development. This is specially genuine for innovative projects, which are intrinsically riskier due to their original and untested character .
advanced investments in environmental projects face an extra hazard : failure to integrate the effects of abasement of natural assets on the investment. This is an crucial issue for tourism, as one of the main drivers of tourism is the quality of the environment. Tourism investment, and the visitor flows it supports, can damage and deplete these lifelike resources, while extreme point events ( e.g. floods ) due to climate variety can negatively impact a nominate infrastructure or other tourism-related project. far conversion risks include the likely change in rules and regulations, shifts in consumer markets, or technical innovations by firms in answer to environmental abasement, each of which can increase recurrence on the investment volatility ( Ministry of Environment, Territory and Marine Protection, Italy and UN Environment, 2017 ) .
Public sector interposition focuses on creating the enabling conditions for individual sector investment in sustainable tourism projects. This includes earmarking funds for environmental and social policy objectives, and collecting and disseminating data to help actors create desirable instruments. It besides involves assessing whether the insertion of fiscal market reforms are necessary to stimulate private investment to support green growth, and devising measures to systematically take into account the price of environmental and social externalities when price hazard and in the finance decisiveness ( OECD, 2017a ) .
This needs to be done in a credible way, taking into account national circumstances and likely competitiveness impacts. policy instruments will differ depending on if the pricing problem in tourism is due to lack of data, financing initiation expertness, or capacitance at regional or local level. Designing investment policies to support sustainable tourism development besides involves using environmental evaluation techniques to ensure that cost-benefit analysis takes into account the cost associated with the depleted resources and environmental abasement. here, the OECD Policy Framework for Investment ( 2015a ) suggests clearly identifying the existing mechanisms in station to stimulate individual investment to support park emergence, and ensure value for money .
While sustainability finance is increasingly being used by financing institutions as a lever for broken carbon paper climate bouncy conversion, the magnitudes traded are still not large enough to leapfrog towards definite impacts. This situation is not unique to tourism, and is in separate due to the perception that returns are excessively low proportional to the level of real or perceived risk, and fiscal institutions have limited incentives to invest in sectors with high development impact ( MATTM/UN Environment, 2017 ). Some clientele environment characteristics may besides obstruct sustainable tourism development, such as the presence of cognition and capability gaps on the region of private investors, and what may be a unmanageable local and ball-shaped investment climate .
The challenge for governments is to ensure that public policies and investment conditions facilitate the reallocation of investment from high-carbon to low carbon climate bouncy options, including for tourism ( OECD, 2015b ). A far challenge is to mobilise private finance for projects supporting the transition to k growth, without crowding out the private sector ( OECD, 2011 ). promote economies in particular face need to update and renovate existing infrastructure ( i.e. brownfield investments ), while emerging economies need raw infrastructure investments ( i.e. greenfield investments ) .

Measurement of green finance interventions for tourism

green finance comprises fiscal instruments with the specific function of delivering environmental benefits by tackling issues such as clean energy production, air befoulment, biodiversity loss, climate change and resource efficiency, deoxyadenosine monophosphate well as waste and water system management ( MATTM/UN Environment, 2017 ). This includes k bonds, whose proceeds are earmarked for environmental projects and assets. The OECD Green Growth report highlights that green-labelled bond magnitudes are still minor compared to the global bond market, but however estimates that it amounted to USD 42 billion in 2015 .
At time of write, no internationally agreed definition of park finance exists ( OECD, 2017b ) and a miss of data on green investments remains a challenge, not least because it contributes to the failure to adequately take environmental risk into report in the finance decisiveness. little tourism businesses face particular challenges in this regard, as broken productiveness and lack of interest in growing the commercial enterprise means that finance institutions are unwilling to lend ( OECD, 2017a ), even where the productivity measurement may be lowball if tourism businesses invest in cleaner technologies and more effective use of natural resources. besides, fiscal interventions are normally tagged according to the environment solution provided, rather than the sector served, in this shell tourism .
such information as does exist is reported at the general level, with no sectoral breakdown possible, including for tourism. This means it is not potential to know the extent to which green instruments are financing environmental projects in the tourism sector, and to assess the shock of these investments. Where attest is available, it indicates that park finance is being used to finance transport-related infrastructure investments relevant to tourism, as in the case of the new Mexico City Airport in Mexico, and the rail infrastructure in France ( Box 3.4 ) .

Box 3.4.

Green shackle finance for transport infrastructure in France and Mexico
France: In 2017, the french National Railway Company, SNCF, issued green bonds to finance rail investment. The funds raised will primarily support investing in the existing network, but will besides be used to develop new projects and strengthen the SNCF Network ’ mho sustainability strategy. SNCF Network has developed a methodology to measure the impact of modernization of the track network based on CO2 emissions and the pulmonary tuberculosis of natural resources. An annual report certified by an external hearer will enable green investors to monitor the custom of funds and their environmental impact, which extends beyond carbon emission reduction. A major renovation program of the rail network aims to encourage a modal shift toward track .
Mexico: green bonds are helping to finance the construction of the new Mexico City Airport. Issued by the Mexico City Airport Trust, the green bond proceeds will be used to finance environmentally beneficial projects including a newfangled passenger terminal build, background department of transportation center and air travel dealings control condition center. An estimate USD 5.9 billion in potential eligible environmental projects have been identified and will be financed in tune with the k alliance framework and green Bond Principles across six eligible environmental categories : sustainable buildings, renewable energy, energy efficiency, water and neutralize management, befoulment prevention and see, and conservation and biodiversity .
source : www.sncf-reseau.fr, www.moodys.com .
A late inaugural by OECD and Eurostat has categorised environmental goods and services to enable their use by early sectors to be characterised for statistical or analytic purposes ( air contamination master ; thriftlessness water management ; solid waste management ; redress or clean-up of land and urine ; noise and vibration abatement ; monitoring, analysis and assessment ; cleaner technologies and production groups ; and resource management group ) ( european Commission, 2016 ) .
This framework could serve as a useful benchmark to measure sustainable consumption and production for tourism-related environmental goods. Tagging public and private sector resources to these characteristics would provide taxonomic data for analytic purposes, and could increase awareness about the volumes traded in finance sustainable tourism growth .

Incentives to adopt environmentally sustainable practices

A key challenge on the depart of firms of all sizes, large and small, stems from the fact that firms much fail to account for the impact of their actions on the environment, and society as a whole. If there is a cheaper way to operate, firms will rationally choose this choice, unless firms are good informed about the business subject for adopting sustainable practices, are provided with fiscal incentives to move towards sustainable practices, and face regulative constraints to limit non-sustainable actions .
technological advances are making the transition to green department of energy sources cost-competitive, which may encourage more sustainable business decisions. however, it is estimated that making infrastructure investment low carbon paper will impose an incremental monetary value 4.5 % higher than the “ business-as-usual ” scenario ( OECD, 2015b ), although this calculate may be lower for service producers such as tourism. This indicates a function for policy to encourage tourism businesses to incorporate environmental and social impacts into their investment decision make processes, and nudge behaviour toward more sustainable practices .
Governments can incentivise the actions of firms using pricing instruments to change demeanor with respect to water, waste and enchant, for example by setting up congestion charges in cities and democratic tourism sites, shifting the tax load in favor of environmentally-related tax income, eliminating environmentally harmful discrepancies in tax systems, or managing subsidies to promote greens technologies and phasing out environmentally depraved subsidies ( OECD, 2015b ). policy actions in this deference can have significant impacts, given the multiplier consequence of tourism investments and the cross-cutting nature of tourism .

Coordination of actions across government levels

bankruptcy to accurately account for the environmental externalities of tourism projects can result in negative externalities not being adequately considered. This can lead to excessively much environmentally harmful investment ( e.g. polluting technologies ) and excessively little positivist investing ( e.g. new ecosystem services ). In such cases, there is a rationale for government intervention to restore balance .
however, when politics intervention is inefficient, the distorted shape might be worse than the offspring it is trying to solve. This can occur when confronted with the presence of one or more of the come situations :

  • Fragmented climate policies: For case, maintaining either erratic, excessively rigid or out-dated regulations that create barriers to entry, to the detriment of innovative firms that want to introduce modern sustainable tourism products, processes or organizational models ( known as green innovators ) .
  • Incoherent or non-existent policies to develop sustainable tourism: For case, preserving subsidies to out-dated technologies, such as keeping environmentally harmful agrarian subsidies while promoting environmentally friendly tourism investment in similar geographic locations, or providing insufficient orientation course for initiation systems to advance green growth priorities .
  • Presence of weak governance: For model, at global, local or regional levels, faint institutional arrangements and administration structures can impede the execution or enforcement of policies supporting invention to advance green emergence priorities, such as accelerating improvements in energy efficiency, supporting the development of green infrastructure, or rewarding environmental and social performance .
  • Weak human capital: At the local charge, in particular, this can hamper consolidation of tourism in community development and the engagement of the individual sector .
  • Infrastructure challenges: For exercise, providing the necessary back infrastructure could act as a pry for more sustainable tourism development, including the “ greening ” of existing tourism developments .

In such cases, the being of a market failure per selenium does not justify government interposition, as the beginning three bullet train points in the list above foreground insufficient capacity of policy makers to successfully address the trouble ( Inter-American Development Bank, 2014 ). A promote challenge is how to mainstream the theme that incorporating sustainability criteria into tourism investment, monitor and performance objectives shall be perceived as conducting responsible operations, not as a disincentive to investors ( UNWTO, 2014 ) .

Investing in tourism to deliver on the sustainable development goals

The 2030 Agenda for Sustainable Development sets out a across-the-board and ambitious ball-shaped poverty reduction scheme involving both promote and emerging economies. tourism has the potential to contribute, immediately or indirectly, to all of the sustainable development goals ( SDGs ), but has been peculiarly included as targets in goals 8, 12, and 14 on inclusive and sustainable economic growth, sustainable consumption and production, and the sustainable use of oceans and marine resources ( Box 3.5 ) .

Box 3.5.

Tourism-related targets in the sustainable development goals
Goal 8: Promote sustained, inclusive and sustainable economic growth, wax and fat employment and becoming make for all .

  • prey 8.9 : By 2030, devise and follow through policies to promote sustainable tourism that creates jobs and promotes local anesthetic culture and products .

Goal 12: Ensure sustainable pulmonary tuberculosis and product patterns .

  • aim 12b : develop and implement tools to monitor sustainable development impacts for sustainable tourism that creates jobs and promotes local culture and products .

Goal 14: Conserve and sustainably use the oceans, seas and nautical resources for sustainable development .

  • prey 14.7 : By 2030, increase the economic benefits to small islands developing states and least developed countries from the sustainable manipulation of marine resources, including through sustainable management of fisheries, aquaculture and tourism .

Accomplishing the sustainable development goals involves a hard part of public treatment, particularly in ensuring fundamental conditions for secret sector to flourish, but besides in coordinating and disseminating policy approaches at the national and sub-national level. The appointment of 2017 as UN International Year of Sustainable Tourism for Development, for case, aimed to support a change in policies, business practices and consumer behavior towards a more sustainable tourism sector, and contribute to the SDGs .
An international framework like Agenda 2030 can drive investment and finance for tourism, by channelling oversea development care from advance economies towards less develop countries to foster job creation, sustainable consumption and product patterns, and a creditworthy manipulation of marine and urine resources. Beyond the direct fiscal effect of these disbursements, the fulfillment of the SDGs will besides involve state reporting obligations in a exchangeable way, which can help in the systematization and collect data on investments related to tourism growth. It will besides encourage the implementation of supporting policies that set clear signals and provide stability for investment decisions that support more sustainable practices .
tourism can besides act as a creature to accomplish the SDGs, which in turning can lift the standards for investment and financing for sustainable tourism, by including in finance decisions a component for inclusive increase and environmental re-formation. The underlie rationale for linking three SDG targets with tourism development objectives is based on the intrinsic local character of tourism activities, as tourism is driven by the attraction of local communities ( culture, inheritance ) and the environment ( natural assets and facilities ). The integration of local anesthetic tourism-related SMEs into international value chains can besides contribute to sustainable consumption and output patterns .
For example, when countries invest in more efficient use of natural resources ( e.g. cleaner technology ) and the impacts are not amply understand, productivity can be underestimated. Achieving a more accurate measurement of the productiveness of the tourism sector and the wider economy can help increase the awareness of the economic impingement of the sustainable use of resources, contributing to target 12.b which refers to improving the measurement of sustainability actions. tourism can besides play a role in the fulfillment of many early SDGs, but further exploit is needed to clarify concepts, plan and agree on measurement definitions and techniques, and support execution and train ( Laimer, 2017 ) .
investment has a key character to play in achieving the SDG targets, including those on tourism. however, UNCTAD ( 2014 ) estimate an investing gap of USD 2.5 trillion per year, as the finance needs are not matched by desirable finance opportunities. It is difficult to pinpoint how much of this investment need can be linked immediately to the tourism targets. however, estimates for tourism-related infrastructure development ( such as roads, train and ports ; office stations, water and sanitation ; climate change moderation and adaptation ) and food security, health and education linked with the SDGs in developing countries range from USD 3.3 trillion to USD 4.5 trillion per year .
policy makers can play a function in closing the col by using instruments to attract the engagement of the secret sector, although secret sector participation is more probable in some sectors ( e.g. infrastructure investments in baron and renewable energy sources, transportation, water and sanitation ) than others ( UNCTAD, 2014 ). tourism is a sector where secret sector participation can be sanely anticipated. however, in bringing the private sector to accomplish the SDGs, policy makers need to balance the opposing needs of promote and facilitate investments through easing regulations, and protecting populace interests ( UNWTO, 2014 ; UNCTAD, 2014 ; OECD, 2015c ) .
Addressing the investment gap and achieving the SDGs by 2030 will require closer interaction between advanced economies, emerging economies and developing countries. tell shows that emerging economies face challenges in adapting their output patterns to include sustainability measures, due to rapid urbanization patterns. rapid tourism growth in these countries is besides creating a necessitate for new and effective solutions. Transferring green engineering from advanced economies to developing and emerging economies through sustainable tourism value chains is one approach to address this, as 90 % of green technical invention originates in OECD countries ( OECD, 2017b ).

Advanced economies besides have the opportunity to update existing infrastructure in a manner that supports the transition to low carbon climate bouncy, helps firms become green performers, and contributes to more sustainable tourism consumption and product patterns. Enabling such transition is both directly and indirectly relevant to tourism, and previous OECD ( 2013a ) workplace has identified a count of areas desirable for investing in sustainable tourism ( Box 3.1 ) .
Advanced economies, along with international organisations, can besides help developing countries to create bankable sustainable tourism projects, angstrom well as transferring cognition and enabling the finance to achieve the SDG targets. One of the main drawbacks cited by investors is the lack of concrete and ample tourism proposals in developing countries, and technical foul aid in both finance and technical advice is required to address this ( UNCTAD, 2014 ). In addition, channelling abroad development aid towards tourism can help build sustainable infrastructure and promote green innovators and performers of all sizes .

Mainstreaming investment and financing for sustainable tourism development

A range of possible policy responses to promote and mainstream investment and finance for sustainable tourism growth are outlined and discussed in this section. These include : policies to unlock finance, provide incentives and build capacity ; facilitation and forwarding measures to enhance the business environment and encourage the dissemination of data ; initiatives to promote responsible business behavior ; and measures to improve coordination across levels of government and strengthen the capacity of policy makers to design, implement and enforce rules and regulations .
The underlie rationale is that there is insufficient investing in invention aimed at delivering environmentally and socially friendly outcomes. Investing in sustainable tourism development presents an opportunity to examine the trade-offs and complementarities with investment, competition, trade and fiscal policies as a wholly, to coordinate actions and invalidate confounding impacts. The challenge is that in order to allocate public funds to sustainable tourism exploitation, an appraisal confirming that such an set about is the best use of public funds is needed, as there are second-order effects and distortions, consequence of “ picking winners/sectors ” .

Promoting investment and finance for sustainable tourism development

finance policy options for sustainable tourism investment can range from the calculate output of k engineering to market-based finance instruments. The most common interventions are subsidising broken carbon paper climate bouncy investments through grants and under-priced loans, or providing market-based loans to the sector, assuming that equitable making finance available is sufficient treatment .
Some countries have introduced specific programmes targeting tourism investing. More normally, tourism is one of a range of sectors eligible for finance and investing tools and instruments, including green financing. The challenge hera is to better connect tourism actors with these available tools and instruments .
In Mexico, a tourism enterprise to reduce greenhouse emissions and promote the consumption of green energy in the hotel sector by offering long term loans and public guarantees has been implemented in the states of Quintana Roo, Campeche and Yucatán. The intention is to extract lessons from this fender inaugural, in order to assess the viability of its expansion to the hale Mexican territory ( Box 3.6 ) .

Box 3.6.

Promoting park energy investment by hotels in Mexico
Since 2015, a pilot program is being implemented in the Yucatán Peninsula in Mexico, to increase consumption of green energy by hotels. The program has been designed by the Federal Government, Ministry of Energy, National Commission for the Efficient Use of Energy and the United Nations Development Programme, with the function of decreasing the environmental footprint of the tourism sector by reducing greenhouse emissions. It provides independent, non-chain hotels with technical advice, coach and finance for the learning and facility of solar water heating systems, and aims to generate savings by reducing accelerator consumption .
The course of study offers long-run loans to finance the replacement of water heating systems with k solar energy. Loans are for a menstruation of up to five years at fixate interest rates, up to a maximum value of MXN 15 million. The course of study besides offers public guarantees through Bancomext, the development trust for financing international trade, to support commercial loans, along with interest-rate subsidies from Mexico ’ s Trust Fund for Energy Transition and Uptake of Sustainable Energy Systems. The program has installed 2.5 million squared-metres of solar heating systems, equivalent to 3 000 hotel rooms. The end of the pilot program and thus the assessment is in 2018 .
Another populace inaugural is the klimaactiv mobil program in Austria, which provides EUR 80 million in subsidies to ease green mobility transition ( e-mobility, mobility management, promoting bicycle and pedestrian traffic, and flexible public transport and car share ). The broadcast supports firms, local anesthetic governments and civil associations by providing up to 20 % of the fund costs of the undertaking. While the coverage of the enterprise is wider than tourism, it offers a fund bonus to incentivise regional mobility projects led by tourism associations .
other tourism-related policies to achieve more sustainable consumption and production patterns include renewing and upgrading the existing infrastructure. Bulgaria has developed programmes and measures to support energy-saving and the habit of eco-friendly technologies in buildings, american samoa well as better management of visitors at tourist sites. These initiatives focus on controlling air and water quality and achieving sustainable godforsaken management .
In Australia, a green investment bank charged with increasing the menstruation of finance to park projects is active on tourism. The Clean Energy Finance Corporation ’ sulfur Reef Funding Program is an AUD 1 billion investing broadcast targeting clean energy projects in the Great Barrier Reef catchment area. The course of study offers investing finance for renewable energy, department of energy efficiency and abject emissions technologies across a range of sectors, including tourism and agriculture .
In a separate enterprise, the Corporation offers innovative and low-cost finance solutions to make it easier for hotels to improve energy productiveness and lower engage costs. This has helped fund a solar energy undertaking at the Ayers Rock Resort near Uluru, for model, which is expected to generate about 15 % of the haunt ’ second annual energy habit. The project is providing evidence on how on-site renewable energy is cleaner and cheaper than alternate sources of department of energy for many remote control businesses and consumers ( Clean Energy Finance Corporation, Australia, 2017 ) .
public budgets can besides finance or co-finance individual sustainable tourism projects through dedicated funds, by favouring public individual partnerships to share risk or by providing tax credits. Italy, for exemplar, introduced a tax credit system in 2015 for the renovation of tourism accommodation establishments, with finical focus on energy efficiency and anti-seismic measures. The tax credit covers between 30 % – 65 % of the cost and from 2018 besides concerns the reclamation of the structures most close related to green tourism such as campsites and agri-tourism. With an initial budget allotment of EUR 170 million for the period 2015-2017, the military action has been renewed until 2020 with a budget of EUR 240 million. This measure has been besides accompanied by an extra tax credit dedicated to digital technology infrastructures .
In Spain, a newly eco-tax of EUR 2 per night was introduced on all overnight stays in the Balearic Islands in 2016, including in hotels, cruise ships, vacation rentals and campsites. The tax gross will be used to finance investments to maintain and improve the quality of tourism on the islands, and better wield the territorial and environmental impact, among other things. project proposals for finance are evaluated by the Commission for the Promotion of sustainable Tourism, which brings together representatives from local governments, business associations, environmentalists and other relevant actors. A dedicate web site is being developed to provide information to visitors, enlistment operators and locals on how the tax revenues raised are being used, and the different projects and initiatives being funded .
In circumstances where public budgets are close, public-private partnerships are a viable instrument for financing tourism infrastructure projects, with the private sector providing the expertness and finance and the populace sector providing the underlie conditions ( static business environment ), while both share associated risks. however, there might be an apparent battle between promoting populace private partnerships to ensure investments that otherwise could not be realised, if countries lack of capacity to enforce and monitor the secret counterpart .
An example of a dedicated fund is New Zealand ’ mho Tourism Infrastructure Fund, which provides NZD 100 million in co-financing over four years for the development of tourism-related infrastructure such as carparks, exemption camp facilities, sewage and body of water works and transport projects. The Fund supports local communities facing atmospheric pressure from tourism growth and in indigence of aid – for exercise, areas with high visitor numbers but small ratepayer bases. Co-funding is required, however only applicants who are financially constrained are eligible ( Ministry of Business, Innovation and Employment, New Zealand, 2017 ) .
In complement, as is usual in all financing projects with public fund, technical back and capacity build are offered to ensure the success and likely scaling up of the innovations ( OECD, 2017a ; OECD, 2017c ; MATTM/UN Environment, 2017 ) .
In Turkey, a joint first step between the Ministry of Culture and Tourism and the United Nations Development Programme to promote local economic development through tourism includes an enterprise which each class provides fund of TRY 50 000-TRY 120 000 to three projects led by local tourism actors and non-governmental organisations. The future is in Tourism enterprise brings together populace, private and civil company actors to implement sustainable and community-based tourism projects, and provides the guidance, tools and resources to build capability to work together to support sustainable tourism development. Since 2007, 13 projects have been supported. tourism investments to support cultural preservation, regional development and other investment priorities can besides benefit from reduce tax income .
In Italy, interim, an in-kind support enterprise was introduced in 2014 to encourage the re-use of state-owned cultural inheritance sites for tourism purposes. The first step grants concession rights exempt of charge to organisations or individuals will to bear the investment costs to transform these sites into tourism facilities. The purpose is to encourage the development of walk, cycle and other human powered itineraries along cycle paths and historical-religious cultural routes, to grow tourism and promote regional growth. The first step involves collaboration between the Ministry of Culture and Tourism, Ministry of Infrastructure and the State Property Agency .
Another finance border on with electric potential to support sustainable investment and occupation practices is the growing sphere of “ impact investing ”. alike to public sources, private finance instruments can have objectives beyond profitableness, and seek to stimulate local growth by supporting small firms and job creation. Impact investing includes blended finance, cocksure impact finance and social impingement investing instruments, which provide finance to organisations addressing environmental and social needs with the denotative expectation of a measureable social adenine well as fiscal fall. Microfinance and rewards-based crowdfunding can be classified as impact investment instruments. These finance solutions are best used when markets fail to allocate resources or when considerations beyond economic efficiency prevail ( e.g. fairness or distributional goals ) .
In the United Kingdom, for model, impingement endow has been used to transform a disused agency build in London into an advanced green hotel, using pre-fabricated bedrooms made primarily from recycle materials within the existing structure to reduce the environment impact of the hotel build process. With initial finance provided by an impact investor, Bridges Fund Management, the hotel has subsequently introduced a diverseness of sustainability features, including solar panels, LED and energy efficient alight, and water keep open features .
Public sector subscribe can besides seek to foster the cluster of firms in a local anesthetic community, to generate the necessity bulk of finance for sustainable tourism projects. analysis of tourism-related microfinance experiences reveals a phone number of policy options to boost lend and improve outcomes of tourism growth, for case. These include programmes to bring tourism-related businesses in concert to borrow jointly in order to alleviate the topic of fragmentation and low volumes that increase the price of citation, along with raising awareness and providing training in entrepreneurial management to maximise the potential of loans .
This business model can be transferred to advanced economies to support sustainable tourism investment, by aggregating groups of tourism-related entrepreneurs at the local tied ( e.g. crafts producers, food suppliers, tour guides ) to diminish transaction costs, for example. Mexico has a successful experience in this area, involving the creation of a logo to showcase that tourism businesses are registered with the public authorities, and provision of one-day train on how to interact with tourists ( OECD, 2017e ) .

Creating a coherent and sustainability friendly investment environment

Government actions to remove barriers to investment and finance for sustainable tourism development imply a comprehensive overture where an enable environment for investment and development is at the center of policy design, and where low-carbon, climate resilient policies are coherently integrated. This involves designing a joined-up policy framework for sustainable tourism investment .
furthermore, all levels of government indigence to be aligned, with clear targets and consistency in the execution, including engaging with the civil sector ( Corfee-Morlot et al., 2012 ). This involves coordinating the tourism-related investment actions of different policy areas, such as initiation, transportation and environment, a well as different levels of government .
More broadly, a successful policy intervention needs the continuous appraisal of rules and regulations that enforce, promote and potentially handicap sustainable tourism activities. It besides involves strengthening the capacitance of public agents dealing with tourism sustainability, and early stakeholders, to ensure that investment and financing do indeed contribute to sustainable tourism development by, for example, integrating biodiversity concerns into tourism policies. This extends to assessing and potentially removing environmentally harmful subsidies and tax incentives .
part of the policy challenge is the need to develop tourism specific cognition, by improving overall capacity and skills, and find ways to present tourism information succinctly, using up-to-date facts and data deoxyadenosine monophosphate well as testimonials from successful tourism companies ( World Bank, 2013 ). Designing a comprehensive examination sustainable tourism development plan besides implies creating a management mannequin for the integration of local firms in tourism-related value chains .
In Australia, investment promotion and facilitation is a key column of the tourism 2020 scheme, which is a whole-of-government and diligence long-run scheme to build the resilience and competitiveness of Australia ’ s tourism diligence and grow its economic contribution. To deliver on this sight, Australia ’ s tourism investment drawing card strategy has recently been complemented with a regional tourism infrastructure investment inaugural, working with department of state and local anesthetic governments to create a conducive environment for investment in regional Australia ( Box 3.7 ). Tourism investment projects often require multiple approvals from different agencies across different levels of politics, because of their placement in areas of high gear natural agreeableness and their multi-use nature .

Box 3.7.

Facilitating investing for tourism and regional development in Australia
Increasing tourism investment is a key priority under the australian Government ’ s Tourism 2020 scheme, to develop the merchandise needed to realise the nightlong visitor consumption targets. To facilitate investing in the tourism industry, the Tourism Major Project Facilitation service provides proponents of meaning tourism investments with a central contact person in the australian Government. This contact helps guide proponents through the approval processes across unlike levels of government. The service works in co-operation with Federal, State and Territory government agencies to march approvals in a streamline and effective manner. It saves investors time and money by streamlining interactions with approval agencies, and helps ensure that tourism projects can access an integrated investment facilitation service to minimise delays .
Actions include : identifying the compass of approvals required ( including environment and inheritance, employment, autochthonal affairs ) ; facilitation of meetings with approving agencies ; documentation and expertness on government programmes and processes ; assisting investors to access relevant support programmes ; and brokering solutions to problems that arise while seeking approval. Projects must meet a compass of eligibility criteria, including having a capital investment value in overindulgence of AUD 50 million, making a meaning contribution to economic growth, exports, employment and/or infrastructure exploitation, and being of strategic meaning to Tourism 2020. By 2017, the service was supporting six projects, expected to generate 13 000 jobs during structure and operation .
generator : australian Trade and Investment Commission .
investment and finance needs to be part of a carefully planned and sequenced tourism scheme, which orients invention systems to advance green increase priorities. careful design is besides substantive to mitigate adverse impacts associated with rapid tourism growth. In order to avoid low-impact, disperse and place tourism investments, tourism projects must besides be separate of a strategic development model, focusing efforts on specific types of tourism and destinations .
In Iceland, there is an pressing need for investment as faster than anticipate growth in tourism numbers has put atmospheric pressure on the environment and available infrastructure. A tourism task force bringing together public and individual actors including the ministries of tourism, finance, inside and environment and set to operate until 2020 is charged with implementing a Road Map to deliver more sustainable tourism growth .
separate of this response has included the modification of the Tourist Site Protection Fund to focus on modest, innovative projects under the management of private landowners and local authorities. It will function alongside a new hanker terminus infrastructure plan for the auspices of larger publicly managed sites of natural, cultural and historic rate, and will be complemented by fresh address management plans to support more target infrastructure development better aligned with the needs of local communities. The OECD ( 2017d ) has recommended Iceland subject tourism infrastructure investment to rigorous cost-benefit analysis, taking into retainer the sociable and environmental impacts ( Box 3.8 ) .

Box 3.8.

Tourist Site Protection Fund in Iceland
Established in 2011, the Tourist Site Protection Fund provides das kapital aimed at ensuring tourist safety and protecting Iceland ’ s lifelike environment. It besides aims to support the development of new attractions, to spread tourism flows more evenly throughout the country. innovative projects run by local authorities and domain owners are targeted. fund is only provided to private entities when the web site is open to the general public and access is free of charge, although it is permitted to charge for park, toilets and other services. Changes to the legislation in 2017 means that national agencies are no longer eligible. Grants provide funding for 80 % of the entire project cost, with a standard duration of one year. In 2017, the allocate budget amounted to ISK 600 million .
Since its creation, the fund has supported a total of 750 projects. As an case, at Goðafoss waterfalls, the concession provided the municipality with the fiscal means to improve handiness, protect the environment, enhance security system, improve signage and direct growing visitor traffic. Main consequence include the development of a watch platform, a pedestrian walk and a parking area. The Icelandic Tourist Board oversees the management of the Fund, while the Tourist Site Protection Fund Board is made up of representatives from the Ministry of Industries and Innovation, the Icelandic Travel Industry Association, the Icelandic Association of Local Authorities and the Ministry of the Environment and Natural Resources. All grants are approved by the Minister of Tourism, Industries and Innovation, and allocations are made public .
reservoir : Icelandic Tourist Board and Ministry of Industries and Innovation, Iceland .
tourism investing must besides include a palpable environmental commitment in terms of both design and investing. Tourism development programmes must balance investment in infrastructure with the strengthening of local tourism government for effective policy plan and execution. These programmes require cross cutting engagement and murder capacity in wrinkle with the type of tourism in interview ( IDB, 2016 ) .
once the policy instrument has been identified, there needs to be an evaluation of whether there is sufficient capacity at the home and sub-national level, and in the private and civil sector, to successfully implement the policy ( OECD, 2014 ) .
In Chile, the Foco Destino first step intends to build capacity of local managers in rate to boost choose tourism destinations and increase their competitiveness and sustainability, within the model of the National Plan for the Sustainable Development of Tourism. In a relate enterprise, Invest Tourism aims to attract investment to sustainable projects in “ investable ” destinations. Projects are required to generate a positive impact in the local anesthetic sphere, taking due circumstance of the conservation of natural resources and affluence of the environmental rendition, for exemplar ( Box 3.9 ) .

Box 3.9.

Boosting sustainable address development and investment in Chile
Foco Destino programme: Designed by the Ministry of Economy, Development and Tourism and the National Tourism Service, the program aims to address competitiveness gaps in local destinations and boost sustainable exploitation. It builds capacity at local anesthetic grade by assigning address managers with at least seven years ’ have to coordinate tourism policies in each finish, connect secret and public actors, and design and implement site-specific forwarding strategies. Thirty tourism projects in seven destinations were funded in 2016-2017, with a total of USD 6 million mobilised. experience indicates that replicating the course of study in different destinations is more effective when : the approach is adapted and managers selected to reflect the specific destination ; interventions last at least 12 months, with ongoing monitor and coordination ; projects are jointly prepared by industry professionals, consultants and technical agencies ; and strategic private and public actors are involved .
Invest Tourism: The Invest Tourism enterprise was launched in 2016 to diversify the tourism put up and stimulate economic action and income generation in regional areas. A Map of Opportunities for Tourism Investment outlines 27 “ investable ” destinations where sustainable projects can be implemented. In total, USD 32 million investing is targeted, with projects ranging from USD 70 000 to USD 5 million. From an environmental point of view, the projects must generate a positive impact in the surrounding area, taking into report the choice of localization, conservation of materials and natural resources, quality of the tourism experience, and affluence of the environmental interpretation .
source : UNWTO, www.invierteturismo.cl .
In Sweden, an inaugural by the swedish Agency for Economic and Regional Growth to boost sustainable consumption and production highlights the benefits of a coordinated approach driving practical actions, tailored to the needs of the five enter regions. With a sum budget of EUR 6.4 million over four years, destinations initiated activities to, for example, develop more sustainable products and services ( Box 2.2 ) .
As with all policy, there is besides a want to evaluate the effectiveness of measures implemented to boost sustainable tourism investment and assess if the desired outcomes are achieved .
In Costa Rica, a Social Progress Index is being used under the National Tourism Plan to better evaluate the impingement of investment and tourism growth on wellbeing at finish level. This innovative inaugural is composed of environmental and social indicators and takes into account destination specifics including the nature of tourism, level of tourism development, and other factors influencing the sustainable development of tourism. The results can be used to assess the impact of economic emergence and investing on wellbeing, and the affect of tourism development on destinations and local communities ( Box 1.22 ) .

Encouraging sustainable and responsible business practices

secret investment is substantive to deliver sustainable and inclusive tourism increase. Most private investment is undertaken by domestic firms, but external investment can provide extra advantages ( e.g. technology transportation, local supplier linkages, access to global markets ), and countries are increasingly looking to foreign investors to provide the capital needed to develop tourism. Policies need to consider how to attract international and domestic tourism investors, and mobilise this investment in a sustainable manner .
Attracting individual tourism investment has become a highly competitive business in many countries, and can be supported by ensuring predominate of law, offering advisory services and facilitating market introduction and exit ( OECD, 2015a ). many countries have identical active tourism investing attraction and facilitation programmes, as illustrated by the Australia model above. indeed, some countries leverage their eco-credentials to attract tourism investment. VisitFinland, for exercise, highlights the singular, scavenge and good nature with high sustainability standards to differentiate Finland as a unique tourism investment location, targeting green investors .
These facilitation and promotion policies not only seek to leverage secret sector participation, but besides have a character to play in mainstreaming responsible behavior among stakeholders, arsenic well as enhancing and more widely spreading the benefits of tourism. Incorporating environmental and social criteria into these policies and programmes can nudge tourism businesses towards more sustainable tourism investment activities .
investing in sustainable tourism development entails fiscal contributions from the private sector ; the nature of the investment financed and the manner in which tourism businesses operate is besides relevant. responsible business lead involves a committedness to sustainable development, transparency and accountability in commercial enterprise practices, accepting duty to avoid injury even if it is not prohibited ( moving from “ do no damage ” to “ do dependable ” ), and working in partnership with government to maximise the joint benefits of investment ( UNCTAD, 2014 ; OECD, 2015a ) .
part of the enable policy measures imply devising ways to disseminate information to investors more effectively, through a mix of existing and custom-make instruments, such as websites, detailed sector profiles, and tailored presentations. suitable policy actions include developing a net of partners to enhance avail delivery ( World Bank, 2013 ). policy options can besides enhance the rate universe of alien lineal investments : for model, by increasing linkage prospects with local firms by stipulating the use of local inputs and supporting local firms with finance and non-finance products in order to be able to reach international standards ( UNCTAD, 2007 ) .
In Germany, several populace initiatives involving co-participation from the individual sector in policy design are in seat to harness the transition towards energy effective sources in hotel and restaurant businesses, including initiatives to raise awareness and gather attest on the business subject for more responsible and sustainable business practices, including investment .
The Federal Ministry for Economic Affairs and Energy, for exemplar, is conducting a navigate project on energy-efficient buildings in co-operation with the german Energy Agency. As contribution of this effort, the Check-in Energy Efficiency project was launched in 2015 to showcase the economic and social benefits of transitioning towards energy-efficiency sources. This project requires hotels to implement at least one investing that will generate bottom-line energy savings of at least 30 % to 50 % for inflame and electricity – as compared with energy consumption prior to the investment. The 30 active hotels are given adept energy-efficiency advice to enable them to utilise the efficiency electric potential available and profit from an increase in subsidies .
In another first step the german Government is building on the experience of the german Hotel and Restaurant Association ’ s department of energy and climate moderation campaign to encourage more sustainable business practices, demonstrating how private strategies can besides help address the investment gap ( Box 3.10 ) .

Box 3.10.

Hotel and Restaurant Association ’ s department of energy and climate extenuation crusade in Germany
The german Hotel and Restaurant Association, DEHOGA, has an energy and climate extenuation awareness campaign focused on department of energy efficiency, regional procurement and sustainable mobility. The campaign provides information to hotels and restaurants through a assortment of channels, including guidance, on-site consult, networks and workshops. It is highlighted in the National Action Plan on Energy Efficiency as a well exemplar of an industry-based border on to energy efficiency awareness and sensitivity. The german Government decided to build on the DEHOGA experience during its presidency of the Alpine Convention 2014-2016. several initiatives were launched, including organising workshops with experts, unions and hotel owners. An on-line instrument in four Alpine languages was developed, along with a hardheaded guide to energy management. The intention is to offer hotels the possibility to engage in systemic energy rescue, frankincense reducing costs and the discharge of harmful greenhouse gases. A contest, ClimaHost, is planned to highlight estimable practices and raise awareness of climate extenuation and adaptation issues .
source : Federal Ministry for the Environment, Nature Conservation, Building and Nuclear Safety, Germany .
In France, the Chamber of Commerce and Industry encourages members to adopt a more creditworthy approach path to the environment, and has identified as challenges for sustainable tourism financing the gamey costs and low profitableness associated with “ going green ”. To address this, a series of actions have been developed, including the certification of sustainability in tourism products. The Chamber has besides created a dedicate web site with a custom-make search tool that identifies the independent programmes and fund options available to tourism businesses, depending on the class and placement of the clientele, the nature of project proposed ( e.g. befoulment reduction, recycling and consume management, awareness campaign ), and the type of back sought ( e.g. grants, subsidies, loans, guarantees ). This includes instruments easing finance for construction renovations, investments in modernization and support for label .
In Iceland, the Icelandic Centre for Corporate Social Responsibility and the Icelandic Tourism Cluster, through its activities to promote investment and responsible tourism, besides support tourism SMEs to adopt more sustainable practices : demonstrating emblematic behavior and deference for nature ; ensuring the base hit and a courteous treatment of guests ; respecting the rights of employees, and having a positive impact on the local community .
late policy measures to promote more sustainable consumption and production patterns use levers closest to the negative consequence. One example is through putting a price on carbon by taxing polluting emissions preferably than the use of fossil fuels as inputs ( OECD, 2011 ). possible government actions towards easing the passage to cleaner products and production processes include allocating incentives to R & D focused on the substitution of dirty inputs for cleaner ones ( i.e. park performers ), and promoting a stir to consumption patterns with lower environmental footprint ( i.e. the green economy ), and increased re‐use, compensate and recycling patterns ( OECD, 2011 ) .
One potential way forward in the tourism sector would be to devise policy options linking sustainable tourism development and the circular economy, to support more sustainable tourism consumption and production patterns. The round economy is a concept that covers the integral cycle, from output to consumption, and advocates a “ reduce, re-use, recycle ” approach to increase environmental benefits .
The European Union, for case, has devised a plan for Action on the circular Economy that includes economic incentives for producers to put green products on the market, and support recovery and recycling schemes. While tourism is not presently a target sector in this enterprise, it can benefit from many of the policy recommendations .

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