Paper short abstract:

The paper investigates mechanisms to involve the tourism sector in Small Island Developing States (SIDS) in climate adaptation finance.

Paper long abstract:

Worldwide tourism is one of the largest global industries and the main economic sector of many Small Island Development States (SIDS). However, the tourism industry in SIDS could be adversely affected by climate change impacts, such as sea level rise or intensified extreme weather events—along with some potential opportunities. The impact magnitude, geographical attributes, and economic dependencies on tourism markets make many SIDS particularly vulnerable and resilient thus making them likely to face significant adaptation costs. In the UNFCCC negotiations SIDS were declared to receive prioritization in funding for adaptation from international climate finance. Part of this funding is supposed to come from the private sector. Based on these assumptions, this paper focusses on exploring different participatory opportunities of the tourism industry to finance climate change adaptation in SIDS and seeks to estimate advantages and barriers of certain fiscal and political instruments. It reveals that there is an overall high potential to involve the tourism industry in adaptation finance, for example via mechanisms such as adaptation taxes, insurance schemes, or disaster risk reduction measures. Regional or local adaptation funds appear to be particularly suitable. However, the adaptive capacity of industry stakeholders, operational scales, and customer demands are key determining factors in shaping this potential. Some investments by multinational tourism corporations could be accredited to international adaptation finance in theory, but only tight regulations and clear definitions of adaptation measures would avoid potential misuse of such finance.