From Greece’s climate crisis resilience fee and Bhutan’s Sustainable Development Fee, to Hawai’i’s newly implemented “Green Fee,” some of the world’s most sought-after travel destinations are integrating a spin on the increasingly ubiquitous tourist tax. Call it a “green fee,” a “green tax,” or a “climate crisis resilience fee”—under different names, countries are attempting to divert some of the profits of their tourism industries toward environmental efforts.
But do they work? For many of the green tourist taxes grabbing headlines recently, it’s too soon to tell. Greece’s climate crisis resilience fee is still relatively new; it was introduced at the start of 2024 as a replacement for its existing overnight stay tax. Hawai’i’s green fee (a 0.75 percent tax on accommodation) was passed last summer and went into effect on January 1, 2026.
Instead, we can look to Spain’s Balearic Islands, the Mediterranean archipelago best known for its beaches, natural beauty, and buzzing nightlife, including the islands of Mallorca, Menorca, and Ibiza. In July 2016, the Balearics introduced a tax intended to help fund sustainable tourism. It’s not an outright “green” tax, but was passed with five main funding priorities. The environment was number one.
Almost a decade later, the Balearic government says the tax has raised hundreds of millions of euros—while the islands themselves still struggle with overtourism. Has the funding raised by the tax gone toward implementing meaningful change for the islands? More importantly, what can destinations like Greece and Hawai’i learn from one of the earliest adopters of green tourist tax? Experts say while the idea of a climate-focused tourist tax is solid, it also has some glaring pitfalls—from the speed and the consistency of delivering the funds to effectively communicating their benefits and how they’re being used to benefit the local population.
It’s the ‘polluter pays’ principle.
Tourist taxes themselves are hardly new. Nor is the idea that the funds they generate should be circulated back to support the places that helped raise them. In the 1940s, as the United States’ short-haul airline industry (and accompanying domestic tourism sector) took off, California introduced transient occupancy taxes, or a “bed tax” for visitors. The proceeds were directed toward growing the sector via tourism bureaus and promotional conventions.
Green tourist taxes are part of a broader, quietly radical move within tourism that takes the principle and pivots it away from development, says Professor Hazel Andrews, leader of Liverpool John Moores University’s tourism, travel, culture, and heritage research group. “It’s about shifting from growth toward restoration,” she says.
It’s also the “polluter pays” principle, Andrews added. Tourists, some say, are to blame not only for local overcrowding and the resulting environmental damage and infrastructure strain, but also for the wider climate havoc wrought by travel emissions. Their money could (and arguably should) fund both remediation in the destinations they descend upon and more resilient infrastructure for the climate shocks to come.
How green tourist tax funds are distributed
At first glance, the numbers say that the Balearics’ sustainable tourism tax has been a success. According to the Balearic Islands Agency for Tourism (AETIB), the tax has raised $775 million (€661 million) so far, distributed between more than 250 projects. Some fit the bill of this local-to-global payback model perfectly.
For example, more than a million euros have been allotted for the Balearics’ world-renowned fields of underwater seagrass “meadows,” which are both biodiversity hot spots for the crustaceans and the small fish that call them home and a habitat that sucks meaningful amounts of carbon out of the atmosphere.
Stretching from Ibiza’s Ses Salinas beach across thousands of acres to Formentera, the islands’ seagrass meadows have long-standing UNESCO world-heritage status but have faced unprecedented pressure from rising sea temperatures and, more immediately, from a rapidly increasing number of anchors lowered from pleasure boats onto the seafloor.
In 2016, funds from the tourist tax renewed the government’s monitoring program (defunct since 2012), spent nearly $469,000 on signage for boat users, and approximately $860,000 on Projecte Posidonia, an app that maintains a live, digital record of where seagrass has been spotted so as to help tourists and other boaters avoid the habitat when mooring.
Elsewhere, officials allocated $2.1 million to beach cleanups. Another $1.76 million went to pedestrian and cycle paths and an additional $1.18 million to the Balearics’ eight marine reserves, a major draw for diving tourism and valuable biodiversity hot spots in their own right. These seem like worthy projects.
Ibiza’s UNESCO-protected seagrass meadows are among the ecosystems that have benefited from tourist tax-funded support.
Photo by Xavier Mas/Courtesy of UNESCO
Theory versus practice
But beneath the press releases, the picture is less rosy. Neither the beach cleanups nor the travel paths have started, although the grants were awarded almost three years ago. And the marine reserves needed that funding so desperately only after central government cuts nearly halved their budget. That is forgetting all of 2020 to 2022, when almost all of the funding was rediverted to emergency pandemic spending. Less nobly, in 2021, officials also made news for using the tax to pay for the LOS40 Music Awards. (The government justified this by pointing to the awards’ economic benefit, the Mallorca Daily Bulletin reported at the time.)
On the face of it, a $35.25 million plan to expand Mallorca’s public transport network—which currently stretches from the capital, Palma, to Manacor and to Arta (a coastal town in the northeast of the island)—sounds like a smart, green way to divert tourists out of the island’s more urbanized center. But frequent fliers to the island will know that for a decade and a half, that long-defunct part of the network has been a popular greenway for walkers and cyclists. Like some of the other plans mentioned above, that project was awarded by the island government’s Strategic Tourism Agency in 2023, and none of its funding has been spent.
“While the legislation prioritizes environmental protection, a significant portion of the [tax’s] fund has been directed to pro-growth initiatives”—projects which primarily seek to simply expand the islands’ tourism sector —“masked by weak sustainability,” says Macià Blázquez-Salom, a professor at the University of the Balearic Islands’ geography department who specializes in tourism and sustainability.Replanting a forest is hard to see. But creating a trail through a replanted forest? That creates a different feeling.
“We call these ‘weak’ sustainability measures,” says Blázquez-Salom. “They support greater urban-tourism growth: water supply and treatment infrastructure, transportation, public housing, tourism equipment, and promotion.” These are not bad things, he hastens to add, but they are not what the fund was designed for. Parts of the fund allocated for social housing were instead spent mostly on new real-estate developments. Sustainability blended into sustainable development, blended into outright development at times.
Afar asked the AETIB if any officials involved with delivering the proceeds of the tax were available for an interview. No one responded.
But don’t lose hope for the green tourist tax. In his paper, Blázquez-Salom is at pains to stress how hopeful the idea still is. “It can become,” he writes, “a better instrument for strong sustainability, respecting the planet’s biophysical limits, compensating for the use of the commons, contributing to deepening democracy, and reducing social inequalities through a process of fair degrowth.” It almost sounds easy.
Do locals benefit?
Perhaps the biggest indicator that the tax is not yet working to its full potential is on the streets of the Balearics. The slogans have changed, but the anti-tourism protests have continued much the same. The first year money started flowing out of the fund, locals marched under banners reading “Fins aquí hem arribat” (essentially, “This is what it’s come to”). Last year, placards read “Menys turisme, més vida” (“Less tourism, more life”).
Continued unrest aimed at the tourism industry points a finger at one of the critical flaws in the Balearics’ tax, which Blázquez-Salom blames on “serious democratic deficiencies”: The funds are disbursed without enough transparency. Another academic, Linda Osti, says it might be a stumbling block for other green tourist taxes, too.
Osti is a senior lecturer in tourism management at Bangor University in Wales, where she was commissioned, along with other academics, to evaluate the pros and cons of a general tourist tax. Casting around for other examples, she thought the Balearics ought to offer a success story, until she saw what she now describes as a “disconnect” between the tax and the people it was set up to protect.
“The point is communication,” she says. “The funds need to [be distributed] at a very granular level, a local area, not at a county level.” In the Balearics, that could hardly be further from the truth. Not only are funds administered by a government agency, but also only public bodies—councils, trade unions, registered charities, and other government bodies—can apply, not individuals or grassroots community groups.
For green tourist taxes to work in tourism hot spots, they need to stay on task and keep the money flowing on time. Yet they simultaneously face one of the perennial problems of all climate communication: “Any kind of activity that is done against climate change is for the next 40 years; people don’t see it or feel it now,” says Osti. “That’s the difficulty.”
The solution? Funding big climate projects with local meaning. “Replanting a forest is hard to see,” says Osti. “But creating a trail through a replanted forest? That creates a different feeling.”
For now, the Balearics’ attitude toward tourism remains febrile. Last autumn, Spanish officials banned vacation rentals on the islands in an attempt to curb overtourism and a burgeoning housing crisis, a decision the European Union unsuccessfully attempted to overturn this spring. But full buy-in that the taxes are countering overtourism and creating a sustainable future for the visitor economy depends on locals seeing what they are going toward—whether in the Balearics or throughout the world.
