Mountains of trouble: Accounting for environmental costs of land use change from tourism development

Abstract

Land use change is the main driver of nature and biodiversity loss worldwide, and tourism developments contribute to this loss. The combination of Cost-benefit analysis (CBA) and Stated Preference (SP) methods can help inform tourism management by translating the environmental and economic impacts of developments into welfare impacts in monetary terms. We perform a CBA at both the local and regional levels for small (S), medium (M), and large (L) developments in a certified sustainable mountain destination in Norway. The L-development is the preferred tourism management locally as local economic benefits outweigh the local environmental costs. However, when we also include the economic and environmental impacts outside of the destination, we find the S-development to provide higher total welfare at the regional level. This shows that local governments’ dual role as regulators and promoters of tourism is problematic since sustainable management should also account for the nonmarket environmental welfare impacts outside of the destination.