The efficiency of the Environmental Management Charge in the Cairns management area of the Great Barrier Reef Marine Park*

Abstract

Using data from a survey of more than 1000 domestic visitors to the Northern section of the Great Barrier Reef (GBR) -predominantly those travelling on live-aboard dive boats -this research investigates the (tax) efficiency of the Environmental Management Charge (EMC). The travel cost method (with a zero truncated negative binomial specification) is used to estimate the price elasticity of demand, and those estimates are used to estimate the deadweight losses, the losses in visitor numbers that could be 'blamed' on the EMC and the associated taxation revenues for different types of trips. The welfare loss for each dollar of revenue raised from the EMC was estimated at less than one per cent for each type of trip considered. The analysis therefore suggests that, for these types of trips in this part of the reef at least, the EMC is a very efficient tax -particularly when compared with other taxes. This has important implications beyond the GBR, particularly in countries who struggle to find sufficient funds to properly manage world heritage areas: taxes such as these may be a relatively efficient and equitable means of collecting such revenues.

Terrestrial pollutant runoff to the Great Barrier Reef: An update of issues, priorities and management responses

“…Other recent socio-economic work has focused on a range of issues related to tourism and the GBR (Coghlan, in press;Farr et al, 2011;Gregg and Greiner, 2008;Kragt et al, 2009;Pabel and Coghlan, 2011).…”

Marine conservation finance: The need for and scope of an emerging field

“…Fees (e.g., for use of MPAs) and taxes (e.g., for tourism accommodation) can generate revenue from the general public and from users of ecosystem services (the investors) that flows towards governments, communities, or non-profit organisations (the investees) to manage the MPAs or marine areas, potentially in an economically efficient and equitable manner (Knapman and Stoeckl, 1995;Farr et al, 2011). Entrance and user fees for MPAs are common globally, including notable examples in Palau, Hawaii, and Australia (Mak, 1995(Mak, , 1998Uyarra et al, 2010;GBRMPA, 2014) and have been shown to be supported by visitors in some regions .…”

Valuing marine parks in a small island developing state: a travel cost analysis in Seychelles

“…This study used perceived travel costs as reported by respondents. The current literature shows a slight preference for the use of reported costs (Herath and Kennedy, 2004; Prayaga et al , 2010; Farr et al , 2011). Arguably, this is because reported costs are most likely to represent the opportunity costs that respondents considered when making their trip decision (Bennett, 1996; Prayaga et al , 2010; Mwebaze and Bennett, 2012).…”

“…For single-site visitors, all the travel costs can be allocated to the site; however, for multiple-site visitors, travel costs need to be apportioned in some way between sites. There are no fixed rules on how to do this and several different approaches have been suggested (Parsons and Wilson, 1997;Loomis et al, 2000;Stoeckl and Mules, 2006;du Preez and Hosking, 2011;Farr et al, 2011;Mwebaze and Bennett, 2012). A number of studies suggest the use of dummy variables to account for multiple-site visitors so that the model, in essence, determines the proportion of total travel costs to be allocated to a given site (Parsons and Wilson, 1997;Loomis et al, 2000;Stoeckl and Mules, 2006;Mwebaze and Bennett, 2012).…”

“…For single-site visitors, all the travel costs can be allocated to the site; however, for multiple-site visitors, travel costs need to be apportioned in some way between sites. There are no fixed rules on how to do this and several different approaches have been suggested (Parsons and Wilson, 1997; Loomis et al , 2000; Stoeckl and Mules, 2006; du Preez and Hosking, 2011; Farr et al , 2011; Mwebaze and Bennett, 2012).…”