Climate change-induced economic impacts on tourism destinations: the case of Australia

Abstract

Although the economic impacts of climate change have been analysed in Australia at the national level, impacts of climate change via tourism activities have been overlooked. It is likely that the induced economic impact through tourism activities is much more than realised, particularly at the regional/destination level. This paper examines the economic flow-on effects of climate change on five selected Australian tourism destinations. While the flow-on effect of impacts on these five destinations is relatively insignificant at the national level, at the regional level the impacts can be very considerable, and those impacts vary widely between regions. In addition to general direct climate change impacts on the economies of these regions, the larger their tourism share, the severer the flow-on economic impacts involved. The paper raises concerns for policymakers that measuring economic impacts of climate change without considering its flow-on effect through tourism activities will significantly underestimate the total impact of climate change for destination regions. Further, when all tourism destinations are taken into account, the flow-on economic impact of climate change could be significant for the Australian economy as a whole. Analyses such as those reported here could form a basis for scenario examination for policy development.