The reality of Hawaii's tourist climate tax
A .75% tax will not destroy Hawaii's economy. But unchecked climate change will.
Here’s something you don’t hear every day: A notable climate change law is about to be signed in the United States.
Hawaii state lawmakers on Friday approved what’s known as the “green fee,” a first-of-its-kind effort to charge visitors for climate adaptation efforts. Once signed into law by Gov. Josh Green, the green fee will raise Hawaii’s existing transient tax on hotel rooms, vacation rentals and other short-term accommodations from 10.25 percent to 11 percent starting next year. Cruise ship passengers docked at Hawaiian ports will also be charged an 11 percent transient tax per night.
The increased revenue from that by .75 percent tax increase—expected to be about $100 million per year—will be earmarked specifically for projects like coral reef restoration; sand replenishment for eroding beaches; hurricane preparation; and removal of invasive grasses like the ones that fueled the deadly wildfires in Lahaina, according to the governor’s office.
“Given the devastation we saw on Maui in August of 2023, this measure is crucial because it will help us to deal with wildfire risk resulting from the climate change crisis,” Green said in a statement.
The measure is significant because it marks the first time a U.S. state has ever charged visitors for environmental conservation efforts. It also took years for activists to accomplish. “It's something that people like me have been calling for for over a decade now, and started off as a pipe dream,” Kaniela Ing, a native Hawaiian organizer and national director of the Green New Deal Network, told HEATED. “It's monumental, because it shows that the organizing has paid off.”
The money raised from the visitor green fee won’t be enough to cover all of Hawaii’s conservation needs, however. According to an analysis released this year by Care for ʻĀina Now, the state needs at least $560 million per year to offset the environmental effects of tourism and adapt to the worsening impacts of climate change.
But Hawaii isn’t expecting tourists to foot the entire bill. It’s trying to make polluters pay, too.
Last week—one day before the Legislature passed the visitor green fee—Hawaii Attorney General Anne Lopez filed a lawsuit against seven oil and gas companies and the American Petroleum Institute, seeking to recover damages for costs associated with worsening storms, wildfires, and coastal erosion from sea level rise.
In her strongly-worded 196-page complaint, Lopez accused fossil fuel companies of failing to warn Hawaii consumers about the consequences of their products, and engaging in a massive cover-up to hide those consequences:
Starting no later than the 1980s, Defendants have spent millions of dollars orchestrating a massive disinformation campaign to cast doubt on the science of climate change; to shuttle climate denialist theories into mainstream media and science despite the fact that Fossil Fuel Defendants’ own scientists had already debunked those theories; and to conceal the role of fossil fuels in driving the climate crisis …
If not for Defendants’ tortious and deceptive conduct, the damaging consequences of climate change in Hawaiʻi would have been far less extreme than those currently occurring ….Hawaiʻi seeks to ensure that the parties who have profited from deceiving consumers and the public about climate change bear the costs of that deceptive commercial activity.
Indeed, Ing told me he’s seeing the effects of fossil fuel industry disinformation in Hawaii get worse every year, no doubt aided by the rise of an unapologetic climate denier president. “I have friends who used to be all about climate who literally call it a hoax now,” he said. “It’s like the Elon Musk effect—they say they care about the environment, but don’t believe that pollution is hurting the climate anymore.”
Still, it’s clear that the Trump administration and fossil fuel industry are spooked by lawsuits like Hawaii’s, which have now been filed in nine different Democrat-led states. The Trump administration preemptively sued Hawaii, seeking to block its climate lawsuit before it could even be filed. “At a time when States should be contributing to a national effort to secure reliable sources of domestic energy, Hawaii is choosing to stand in the way,” the lawsuit said. “This Nation’s Constitution and laws do not tolerate this interference.”
But it appears the Constitution does in fact tolerate Hawaii’s actions, because the state did file its lawsuit, and most legal experts say Trump’s attempt to block it is unlikely to go anywhere. If anything happens on that front, I’ll keep you posted.
In the meantime, Hawaii remains one of the most climate-vulnerable states in the nation, with a tourist economy built on stunning natural resources like corals, beaches, and endangered species. It has to do something to raise money to protect itself—hence the visitor green fee, which is fairly nominal for the average Hawaii tourist.
But if you read a lot of other news about the green fee, you might not get that impression at all. In fact, you might get the impression that this new climate tax is going to single-handedly destroy the tourist economy in Hawaii. Here are some examples:
SFGate, which brands itself as the “largest news site on the West Coast,” published a headline last week incorrectly claiming that Hawaii will “add 11 percent hotel tax for tourists.” I’m sure it got a lot of clicks, but it’s just not true. Hawaii is adding a .75 percent hotel tax for tourists.
The Points Guy, which reaches over 8 million people a month, incorrectly reported that in addition to the .75 percent statewide tax hike, the green fee will allow Hawaii counties to impose an extra 3 percent tax on lodging. That’s not true; Hawaii counties already impose a 3 percent tax on lodging, and have for some time. It’s not related to the green fee whatsoever.
Newsweek published this provocative headline: “Hawaii Vacations Are About To Become More Expensive.” While technically true, it’s pretty misleading: A .75 percent tax hike means visitors will spend an extra 75 cents per 100 dollar room rate. So a $482/night hotel room for 7 days would be $4,411.03 instead of $4,385.72, a difference of about $25. Here’s the breakdown:
Bill calculated using Hyatt hotel prices. (Also, it’s wild for a Serious News Outlet like Newsweek to completely neglect the reason for the tax hike in the headline. Just saying.)
It should also be noted that, while Hawaii might be the first U.S. state to impose a visitor tax for environmental conservation, it’s not the first highly-trafficked tourist destination to do so. Iceland has a similar environmental tax on hotel stays and cruise ships. Bali, Fiji, and New Zealand all charge entry fees to help pay for conservation. Palau imposes a $100 "Pristine Paradise Environmental Fee” for every tourist.
Publishing rage-bait for affluent American tourists may be driving traffic to these sites, but it’s not doing much to inform people about the biggest threat to Hawaii’s tourism economy, which is not climate taxes. It’s climate change.
Is it ethical to visit Hawaii?
At the end of our conversation, I asked Ing to weigh in on the ever-controversial question: Is it possible to be an ethical tourist in Hawaii?
Ing said he’s slightly updated his position since 2021, when coronavirus and water shortages were overwhelming the island of Maui, leading to strict water use limitations for residents.
Today, he said: “Try to be a visitor. Don't be a tourist:”
When I say visitor, I mean you know someone here, and they want you here. If you’re a proper tourist, and you have zero accountability for the vulnerability of our ecology and economy, then consider going somewhere else. Or consider getting to know someone here first in a real way, so you’re accountable. And then you’re naturally going to want to things like a ʻĀina Day with the Nation of Hawaiʻi or a beach clean-up.
Then I think the second best thing you could do is just stay in the designated area. There's endless videos of tourists harassing some of our more majestic creatures that are protected under federal law, throwing stuff off peaks into neighborhoods and protected ecosystems. Just don't.
And the last thing is, stay at a union hotel, don't stay at an AirBnb. Airbnb has completely destroyed communities in Hawaii. So stay at a union hotel.
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Given the gravity of the situation we're in, Hawai'i's tax increase actually seems fairly tame. Also, I appreciate the delineation between "visitor" and "tourist" in the second half of this piece. The former is clearly the more ethically sound of the two.
All cruise ships, especially the large ones should be taxed heavily. They pollute, waste food and treat staff unfairly. Would love a future story on that.