strategictransportation

& tourismsolutions

Tourism and Climate Change

Ecotourism and Sustainable Tourism Conference 2008

Prepared by

Joe Kelly

Director, Environmental Services

InterVISTAS Consulting, Inc.

October 2008

1

A Changing Climate

Carbon dioxide & other greenhouse gases from human activities are changing the climate

Climate change poses serious risks for businesses

Fossil fuel intensive industries are most at risk

2

A Personal Memory

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

3

The Current Reality

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

4

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 ChartresBishop of London

5

Tourism – The Culprit

6

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

7

Whistler’s Carbon Footprint

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

Source: Kelly & Williams, 2007

2030

~ 14%

~ 86%

Internal

Whistler’s CO2 Emissions

Visitor Travel to/from Whistler

8

Tourism’s Challenge

Travel is a prerequisite for tourism

HOWEVER…

It challenges the concept of sustainability the most

9

Global Tourism Emissions

CO2 (Mt) %

Air Transport 517 40%

Other Transport 468 36%

Accommodation 274 21%

Activities 45 3%

Total Emissions 1,307 100%

Source: UNWTO, Climate Change and Tourism, 2007

Global Tourism’s CO2 Emissions , 2004

10

Good News – Efficiency Gains

0.0

0.1

0.2

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0.919

80

1985

1990

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2004

Year

CO

2 Em

issi

ons

per P

asse

nger

Mile

- Po

unds

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

CAGR: -1.9%

US Domestic Aviation CO2 Emissions per Passenger Mile 1980 – 2004

11

But Rapid Growth in Air Travel

0

100

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70019

80

1985

1990

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2004

Year

Pass

enge

r Mile

s (B

illio

ns)

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

CAGR: 4.0%

US Domestic Air Travel 1980 - 2004

12

Total Emissions Climb

0

50

100

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40019

80

1985

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Year

Tota

l CO

2 Em

issi

ons

- Bill

ions

of P

ound

s

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

CAGR: 2.0%

US Domestic Aviation CO2 Emissions 1980 - 2004

13

Aviation Emissions Growing Faster than Total Emissions

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

0.0% 0.5% 1.0% 1.5% 2.0% 2.5%

Annual Percentage Change

AviationTransportTotal

2.0%

1.6%

0.9%

US CO2 Emissions Annualized Growth Rate 1980 - 2004

14

Projected Growth in Air Travel

Air transport is one of the fastest-growing sectors of the world economy2006 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 yearsACI’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

15

Projected Growth in Air Travel

Source: Boeing 2007 Current Market Outlook

16

The Future – A Larger Share of a Larger Pie

Aviation emissions will increase 65% by 2030 Total emissions will increase by 25% by 2030

Source: Energy Information Administration

2005 2030

~ 4% ~ 5.5% AviationAviation

US CO2 Emissions 2005 vs. 2030

17

Tourism – The Victim

18

Direct Physical Risks

Damage to physical assets

Increased insurance premiums

Decreased property values (e.g. weather-dependent businesses)

Forced relocation of operations

19

Direct Physical Risks

Alpine ski resorts below 1,050 metres will no longer be viable with natural snow within 20 years

Source: Organization for Economic Co-operation and Development (OECD)

Glaciers will all but disappear within 45 years and all but the highest Alpine ski resorts will close

20

Indirect Risks –Consumer Response/Backlash

21

Indirect Risks – Rising Energy & Commodity Prices

22

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

23

Is Tourism Prepared?

24

Solutions

25

New Aircraft Technology

Boeing 787 Dreamliner

Scheduled to enter service in 2009Boeing’s first new aircraft since launching the 777 in 1990

Airbus A350Scheduled to enter service in 2013Long-range, mid-sized, wide-body aircraft

26

Winglets

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

27

Blended Wing Body

28

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”

29

Government ResponsesBC’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

30

Fuel Switching

31

Carbon Offsets

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

Energy efficiency projectsRenewable energy projectsTree planting (suspect)

Voluntary offsets will mitigate negative economic impacts

Most price sensitive will not volunteerCarbon offsetting provides a viable “transition strategy” until more permanent solutions are feasible

32

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)BALufthansa/SASDeltaContinentalAir CanadaMany others

33

Reasons for non-participation39%: costs too high36%: concerned that funds would not be used effectively23%: offset projects might not be effective6%: offsets not needed2%: payment should be mandatory for all, not voluntary

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

Credibility is Key

34

A Successful Offset Program =Choose high quality offsets that:

Are additionalAre verified by a third partyProvide lasting environmental benefitAre socially beneficial

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

Efficient use of fundsCredibility of offset projects

35

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

36

37

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

38

Get in Front of the Market

InternalEngagement

Visioning/Strategy

Communication Audits

Planning

Implementation

Evaluation/Monitoring

1. Measure Carbon Footprint

2. Establish Targets

3. Plan and Implement Reduction Strategies

4. Purchase Carbon Offsets

5. Communicate Successes

39

Big Opportunities Come From Bold Actions

New market opportunities & brand value

Strategic leadership

Competitive advantage

Lower operating costs

Adapting to or avoiding emerging regulations

strategictransportation

& tourismsolutions

Thank Youwww.InterVISTAS.com

41

InterVISTAS ConsultingInterVISTAS Consulting:

80 team membersBroad range of marketing, security, facilitation, planning, economics and environmental servicesHeadquartered in Vancouver, with additional offices in Winnipeg, Ottawa, Toronto, Washington, Chicago and London

Part of the DHV Group, with sister companies:

NACODelcanInnova