beyond the rhetoric of sustainable tourism?

Pergamon

PII: S0261-5177(98)00013-2

7ourism Management. Vol. 19, No. 3, pp. 199-212, 1998 © 1998 Elsevier Science Ltd. All rights reserved

Printed in Grcat Britain 0261-5177/98 $19.00 + 0.00

Beyond the rhetoric of sustainable tourism?

Brian Garrod* Faculty of Economics and Social Science, University of the West of England, Coldharbour Lane, Bristol BS16 IQY, UK

Alan Fyall Southampton Business School, Southampton Institute, East Park Terrace, Southampton S014 OYN, UK

Recent years have witnessed an upsurge of interest in the concept of sustainable tourism. For the most part, attention has focused on defining the concept. Authors have reasoned that in order to achieve sustainable tourism, a sound understanding must first be gained of what the concept means. This article does not take issue with this general approach, but nevertheless argues that the time has now come to move on from defining sustainable tourism, to begin to consider how it may best be implemented in practice. An approach based on the methodology of environmental economics is suggested as a possible way forward. © 1998 Elsevier Science Ltd. All rights reserved

Keywords: sustainable tourism, environmental economics, non-market valuation

The last decade has witnessed a growing recognition of the importance of the sustainability imperative in tourism. The emerging view is that the tourism sector, however one chooses to define it, can no longer be viewed as a commercial activity that has no significant impact on the natural, human-made and socio-cultural environments in which it is situated. Instead, tourism should be regarded as an extractive industrial activity. To the extent that the tourism industry operates by appropriating environmental resources and transforming them for sale in consumer markets,' it is really no different in principle to the extraction of petrochemicals, the mining of metals or any other of the 'heavy' industries about which environmental concern is so frequently raised. When tourism is viewed as an economic activity that is more than capable of having serious adverse impacts on its environment, the issue of sustainability is brought to the fore. Tourism has been hailed as the potential economic saviour of many countries. But will the unfettered growth of tourism inevitably kill the goose that so many are hoping will lay them a golden egg?

*Corresponding author. Tel.: (0117) 9656261 ext. 2741; Fax.: (0117) 9763870.

The transformation in academic views regarding the environmental relevance of tourism has been nothing short of a revolution. Whereas perhaps only ten years ago the tourism industry was generally viewed as being fundamentally 'soft' on the environment, today the sustainability issue is widely recognised as one of the most important the industry has ever faced. Tourism researchers have not been slow to jump aboard the sustainability bandwagon, and a veritable flurry of books and journal articles have emerged over the past decade or so focusing on the perspectives that the concept of sustainability brings to the principles and practice of tourism. To date, however, much of what has been done centres on establishing a 'correct' view of what sustainability is and what it means in the context of tourism. The result is that defining sustainable development in the context of tourism has become something of a cottage industry in the academic literature of late.

It should be made clear from the outset that the present article does not take issue with this general approach, at least as a starting point. Indeed, it should be seen as an encouraging sign that academics have for once taken the time to consider the theoretical issues behind the latest buzzword, rather than to forge ahead with typically half-cocked recommendations about how the concept should be applied in practice. However, it is the contention of

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Beyond the rhetoric qf sustainable tourism?: B Gwrod and A Fyall

this article that even the briefest review of the contemporary literature shows that there is in fact little left to argue about in defining the concept of sustainable tourism. Most of the bones of contention have already been so well picked that there remains little meat on them for academics to squabble over. Already there are so many varieties of the definition of sustainable tourism that any further proliferation seems to serve no useful purpose. The objective of this article, then, is to propose that the academic debate now needs to move on from defining sustainable tourism, which is only really a first step to achieving it, to consider how the concept might actually be implemented in practice. In doing so, the article explores one promising avenue of progress. This involves the application of a methodological approach that has already been discussed at length in a closely-related discipline - - that of environmental economics - - and is presently finding ready application in several economic sectors aside from tourism.

Proliferating definitions of sustainable tourism

The term 'sustainable tourism' is derived from the more general concept of 'sustainable development', the former being a specific term used to denote the application of the latter to the particular context of tourism. Writers generally trace the origins of the term 'sustainable development' back to a 1987 World Commission on Environment and Develop- ment report entitled Our Common Future {also known as the Brundtland Report, after the chair of the group commissioned to prepare it), where the term was first used to bring together the apparently disparate concepts of economic development and environmental conservation. The vision put forward by the Brundtland Report was one of economic development that was not concerned simply with attaining maximum economic growth (i.e. pursuing economic efficiency) but also with issues of fairness between individuals and groups making up today's society (intragenerational equity), as well as fairness between the present generation and those that are to come (intergenerational equity). The report forwarded the view that intergenerational equity in particular could not be achieved unless the environmental impacts of economic activity were attended to. Were the adverse impacts of today's economic activities to result in the serious degradation and depletion of the environment, this would have the effect of disenfranchising future generations from certain fundamental environmental resources, such as fresh water, clean air, fertile soil and mineral reserves, upon which they would surely wish to base both their economic welfare and their quality of life in general. Hence sustainable development has been defined as:

Development that meets the needs of the present generation without compromising the ability of future generations to meet their own needs. 2 (p. 43):

Many have compared the extant state of affairs as being like drawing cheques on the bank accounts of future generations without any intention of repaying the monies that have been borrowed. The clarion call has therefore been for a revised vision of what constitutes economic progress, and for appropriate steps to be taken to ensure that today's economic development is not achieved at the expense of future economic development.

Unfortunately, since its popularisation in the late 1980s, the term 'sustainability' has often been used in a variety of ways which do not really conform with its usage as originally set out in the Brundtland Report. For example, the term has often become popular among finance ministers, apparently to denote the continuation of economic growth at rates equal or greater to those that are presently being experienced. Such usage pays little regard to the environmental implications of economic growth, or indeed to the issue of intragenerational equity, and as such does not conform to the Brundtland Report definition.

A similar criticism can be levelled at a number of cases where the term has been applied in the context of tourism. It is encouraging, however, to note that for the most part the term has been used wisely, encompassing issues of intergenerational and intragenerational equity as well as efficiency consid- erations, and focusing particularly on the impacts of tourism on its natural and social environments. But this should not be taken to imply that tourism researchers have been content to adopt the Brundt- land definition of sustainability. Indeed, a veritable plethora of definitions has emerged in the literature over the past decade. Table 1 provides a range of examples.

As a broad statement of intent, each of the definitions presented in Table, 1 is laudable in its own right. However, it can be argued that unless these definitions can be translated into something that is meaningful in practice they remain at best mere academic curios, at worst a threat to the achievement of genuinely sustainable tourism.

The latter possibility is raised most graphically in a powerful article by McKercher? who, in discussing the development of Australian tourism, argues that from a single, seemingly universally-agreed definition of the term, two fundamentally conflicting strat- egies for implementing sustainable tourism have been advocated. The first, which he describes as the 'development-oriented' approach, has been championed by the tourism industry; the second, described as the 'ecological perspective', has been advanced by the conservation movement. According to McKcrcher, the result has been that sustainability:

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...has been used by both industry and the conservation movement to legitimize and justify their existing activities and policies although, in many instances, they are mutually exclusive.., thus exacerbating rather than resolving development/conservation conflicts. 4 (p. 131) 4

McKercher goes on to suggest that the threat to the future of tourism is not so much its present lack of sustainability but the danger that the imperative of sustainable tourism will continue to be pursued without a wider consensus having first been achieved as to how it should be implemented.

Table 1 Sample definitions of sustainable tourism

"Sustainable tourism is a positive approach intended to reduce the tensions and frictions created by the complex interactions between the tourism industry, visitors, the environment and the communities which are host to holiday makers . . .an approach which involves working for the longer viability and quality of both natural and human resources. ''4" (p. 2)

"(Sustainable tourism involves) seeking a more productive and harmonious relationship between the visitor, the host community and the place (thereby achieving) a situation which can be maintained without depleting the resource, cheating the visitor or exploiting the local population. ''4' (p. 15)

"Sustainable tourism development can be thought of as meeting the needs of present tourists and host regions while protecting and enhancing opportunity for the future. . . leading to management of all resources in such a way that wc can fulfil economic, social and aesthetic needs while maintaining cultural integrity, essential ecological processes, biological diversity and life support systems. ''4~ (p. 461)

"To be sustainable (tourism) requires the establishment of an industry which includes consideration of the long-term effects of economic activity in relation to resources and, therefore, concerns for the twin needs of this and future generations. ' '~ (p. 131)

"Sustainable tourism depends on: (a) meeting the needs of the host population in terms of improved standards of living in the short and long term (b) satisfying the demands of increasing tourist numbers and continuing the attract them to achieve this (c) safeguarding the environment to achieve the two foregoing aims. T M (p. 318)

"In the case of the tourism industry, sustainable development has a fairly specific meaning the industry's challenge is to develop tourism capacity and the quality of its products without adversely affecting the physical and human environment that sustains and nurtures them. ''4' (p. 13)

"The concept of sustainability is central to the reassessment of tourism's role in society. It demands a long-term view of economic activity, questions the imperative of continued economic growth, and ensures that consumption of tourism does not exceed the ability of the host destination to provide for futnre tourists. ''4" (p. 87)

"Tourism... is dependent upon a given stock of natural, constructed and socio-cultural at tr ibutes. . . if sustainable development of these resources is to occur they must be managed in a way that allows the economic needs of industry and the experien- tial needs of tourists to be met while at the same time maintaining cultural integrity, preserving or enhancing biological diversity, and maintaining life support systems. ''~7 (p. xx)

Beyond the rhetoric of sustainable tourism ?: B Garrod and A Fyall

This is not to suggest that the necessity of moving the debate on from defining sustainable tourism to determining how it may best be implemented has received comprehensive support in the tourism literature. Indeed some tourism researchers seem more than content to continue with further redefini- tion of the concept. Hughes, for example, denounces the efforts of some academics to move the debate on sustainable tourism forward, arguing that doing so;

...diverts attention away from the more fundamental consideration of the moral and ethical basis of the sustainability debate (and) side-steps the philoso- phical complexity of the sustainability concept." (p. 53)

A growing concern among tourism academics, however, is that continuing merely to define and redefine what the conccpt of sustainable tourism means in principle will scrve only to postpone a serious and concerted academic debate regarding the much more important issue of what it involves in practice. The urgency of the situation is all the more real given the recent efforts of the tourism industry to address the sustainability issue through the medium of sustainability guidelines and codes of practice, which is the issue to which this article now turns.

The industry response: guidelines and codes of practice It is undoubtedly a testament to the persuasiveness of arguments promoting the 'green' cause that although the academic debate regarding sustainable tourism is really still in its infancy, the tourism industry itself has already begun to react energetic- ally to the sustainability imperative. Organisations associated with the industry have been keen to promote a range of codes of good conduct and practical guidclines for the development and management of tourism. Their expectation presumably is that adopters will be able to make their operations sustainable by following the guidelines laid bcforc thcm. Table 2 provides a typical example, this particular set being advocated by Tourism Concern and the Worldwide Fund for Nature (WWF)."

Sets of guidelines such as that presented in Table 2 seem very attractive, particularly in the context of a tourism industry that is so diverse and fragmented that it is perhaps not really viable to describe it as such. Being concise, non-technical and logically appealing, such guidelines stand at least some chance of being adopted widely among tourism practitioners. Yet their simplicity is also their great weakness, in that it leaves open to interpretation the question of exactly what needs to be done in order to accord with each of the principles included in the set. The first of the principles shown

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Beyond the rhetoric of sustainabh, tourism?: B Gatrod and A Fyall

in Table 2, entitled 'using resources sustainably', is as good an example as any. It would be difficult to dispute the view that this is an important precondi- tion for achieving sustainability, but exactly how should it be put into practice? Applying this principle raises a number of important, yet unanswered questions.

The first is which resources are to be included in this prescription. The wider literature of sustainability tends to concentrate mainly on the use of natural resources, but it can be argued that human- made and socio-cultural resources are just as important in the context of tourism, if not more so. Is achieving sustainable tourism therefore fundamentally about achieving a sustainable relationship with the natural environment, or should the human and built environments also be included? Secondly, there is the question of what counts as using

Table2 Tourism Concern/Worldwide Fund for Nature: ten principles for sustainable tourism

Using resources sustainably: The conservation and sustainable use of resources - - natural, social and cultural is crucial and makes long term business sense.

Reducing over-consumption and waste: Reduction of over- consumption and waste avoids the costs of restoring long-term environmental damage and contributes to the quality of tourism.

Maintaining diversity: Maintaining and promoting natural, social and cultural diversity is essential for long-term sustainable tourism, and creates a resilient base for the industry.

Integrating tourism into planning: Tourism which is integrated into a national and local strategic planning framework and which undertakes environmental impact assessments, increases the long- term viability of tourism.

Supporting local economies: Tourism that supports a wide range of local economic activities and which takes environmental costs and values into account, both protects those economies and avoids environmental damage.

Involving local communities: The full involvement of local communities in the tourism sector not only benefits them and the environment in general but also improves the quality of the tourism experience.

Consulting stake-holders and the public: Consultation between the tourism industry and local communities, organisations and institutions is essential if they are to work alongside each other and resolve potential conflicts of interest.

Training staff: Staff training which integrates sustainable tourism into work practices, along with recruitment of local personnel at all levels, improves the quality of the tourism product.

Marketing tourism responsibly: Marketing that provides tourism with full and responsible information increases respect for the natural, social and cultural environments of destination areas and enhances customer satisfaction.

Undertaking research: On-going research and monitoring by the industry using effective data collection and analysis is essential to help solve problems and to bring benefits to destinations, the industry and consumers.

resources sustainably and what does not. On the one hand this recommendation might be interpreted as meaning that it is acceptable to deplete or degrade natural resources provided that human-made resources are substituted in compensation (often described as the 'weak sustainability' view). On the other, the substitution of natural resources for other forms might be ruled out altogether on ecological grounds (often termed the 'strong sustainability' view). A third difficulty is that no metrics are provided. This leaves open to interpretation the issue of how one is to know when one is using resources sustainably and when one is not. If conservation is advocated, then how much is enough to achieve sustainability? If reduced pollution is prescribed, then how much abatement expenditure is required? Without a system of metrics, tourism practitioners will not be able to identify how far they have travelled towards achieving sustainability; nor will they know to stop when they have arrived. The danger is that adopters will take a conservative view, believing that only a little conservation, only a little pollution abatement, is all that is required to regard their activities as being sustainable. Parallel issues arise when the other principles presented in Table 2 are analysed in greater depth.

It can be argued, then, that the simplicity of such sets of principles and codes of conduct is actually rather deceptive. The adopter is actually left little further forward in going about the task of implementing a plan of action that will address the sustainable tourism imperative. In response, some organisations have attempted to provide further clarification of each of the main principles they have put forward. The ten principles for sustainable tourism proposed by Tourism Concern and WWF, for example, are accompanied by no less than 98 specific 'recommendations' as to how they might be achieved. But inspection of these recommendations suggests that they are open to similar criticisms as the main principles, having neither a specific target nor the metrics required to operationalise such a target. Other sets of guidelines are just as enigmatic. For example, Globe 90's Action Strategy for Sustainable Tourism sets out over 40 individual recommendations for policy-makers, non-government organisations, the tourism industry, inter- national tourism organisations and the individual tourist. 7 None has a specific, quantified objective and in no case are any metrics provided.

Rather than to solve the sustainability problem, therefore, simple guidelines and codes of good practice may serve only to trivialise it. Indeed Middleton ~ argues that the concept of sustainability has become something of a political nostrum. Evidently, the environmental impacts of tourism are leading society increasingly to take the view that the tourism industry is sickly. Under this view, simple guidelines and codes of practice act as little more

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than a quack remedy, with sufficient potency to make the patient feel somewhat better but lacking the substance to cure them of their ailments. What is rather worrying is that there are some tourism experts who feel that the treatment is working. Owen et al.," for example, argue that the guidelines approach has already led to the achievement of sustainable tourism in Wales. Many other similar examples can be found in the tourism literature.

The condit ions for achieving susta inable tourism

To reiterate, the objective of this article is to propose that the sustainable tourism debate needs to move on, with all due urgency, from defining the concept to a more thorough consideration of how it may best be implemented in practice. Indeed, Pearce and Turner 1'' remind us that defining sustainability is not the same thing as searching for the necessary and sufficient conditions for achieving it. Therefore the next step in going about the task of implementing sustainable tourism must surely be to identify the conditions for its achievement. It is in this context that the approach developed within the discipline of environmental economics is discussed.

A useful translation of the definition of sustainable development into the terms of a sustainability condition is provided by Pearce, who argues that, in essence:

Sustainability means that the average wellbeing of the global population rises over time?' (p. 3)

The view put forward by Pearce is that the opera- tion of the free market does not in itself ensure that sustainability is achieved. Often free markets fail to allocate resources in a sustainable manner and, under such circumstances, some form of government intervention will be warranted. Pearce's argument runs something as follows. It is a fact of economic life that producing the things to meet the needs and wants of the present generation often leads to costs being passed on to future generations. These 'intergenerational costs' usually take the form of the depletion and degradation of resource stocks, especially but not exclusively natural resources. The basic principles of ecology inform us that no production process may ever be pollution-free and that all production processes involve to some extent the one-way transformation of resources. This, in turn, implies that today's economic activities tend to generate opportunity costs which must be borne by future society. Resources that are used or damaged today may not be reserved for alternative uses, including retention for the future, which serves to deprive future generations of the resources they will surely need as a basis for their own social and economic progress. If today's economic activity is not to impinge adversely upon the interests of future

Beyond the rhetoric of sustainable tourism ?." B Ganvd and A Fyall

generations, it follows that the present generation must ensure that full and effective compensation is made to those who are to come for any loss of wellbeing they may otherwise be caused to suffer. Owing to the public ownership characteristics of many environmental assets, the task of effecting this compensation usually falls upon governments and their appointed regulators.

The next question that is inevitably raised is what form should this compensation take. In response, Pearce argues that:

The way to compensate the future is to ensure that we pass on to the next generation a stock of...capital assets no less than the stock we have now. 1~ (p. 4)

This is often described as the 'constant capital rule'. In essence it argues that sustainable development requires the careful management of resource stocks by the present generation, so that future generations are left with at least equivalent resource stocks, and are thereby conferred with at least as good an opportunity of continuing their human development as the present generation had.

The main difficulty in applying the constant capital rule lies in determining the composition of the 'capital stock' that is to be maintained. Environ- mental economists recognise that the 'environment' in which economic activity takes place is in reality a composite of natural, human-made and socio- cultural environments, each of which contributes to providing the resources upon which that activity is based. Figure 1 illustrates this.

The debate centres largely on how far it is considered permissable for any proposed act of compensation to involve substitution between these different forms of capital asset. Most of the discussion that has taken place in and around the literature of environmental economics tends to focus on the status of natural resource assets. Many writers have argued that natural capital warrants special treatment, especially when it is proposed that natural capital is substituted with human-made capital. A range of theoretical positions on this issue

I HnmA.n+ [ Socio- Natural Made Cultural

I I I ! Degradation Depletion i Resource Use

Figure 1

E C O N O M I C S Y S T E M

I l Types of environmental capital

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has emerged. '~ Table 3 groups these positions into 'weak' and 'strong' conceptions of sustainability. It would be as well, however, to comment briefly on the major elements in the sustainability debate, as this will make clearer the arguments that are to follow in this article.

The issue which probably draws the sharpest dividing lines between the four major perspectives on sustainability is how non-renewable natural resources are to be treated in any proposed act of compensation. The depletion of non-renewable resources by the present generation logically prevents those resources that are expended from being passed on to future generations. How then are we to apply the constant capital rule?

Much depends on the particular standpoint on sustainability one is arguing from. Proponents of very weak sustainability, for example, argue that what must be maintained is the aggregate capital stock. The very weak perspective on sustainability reasons that resources are highly substitutable, so that compensation to future generations for the contemporary use of non-renewable resources can be achieved by the present generation passing on suitably enhanced stocks of other resources. The compensating endowment could comprise human- made capital, renewable natural capital or a mixture of the two. On the assumption that technological progress will continue at least at its present rate, it is possible to conceive of human-made and natural capital as being effectively interchangeable. If natural resources are depleted by our current economic activities, then free market forces will serve to sponsor the further technological progress required to enable other resources to be substituted in their place.

Supporters of weak sustainability take a broadly similar line, although they would argue that any substitution of human-made capital for natural

capital should take place within sensible minimum and maximum ecological limits. Activities which imply the substitution of human-made capital for certain natural resources which are essential for human survival are entirely prohibited. These resources are termed 'critical natural capital' and include basic life support functions such as nutrient recycling, reserves of fresh water, the ozone layer, and keystone plant and animal species. ~ Because these natural resources are fundamental to continued human existence, it is not unreasonable to anticipate that future generations will have need of them; indeed it can be argued that they have an inalienable right of access to them. Technological progress cannot be relied upon to identify substitute resources should critical natural capital be depleted or degraded. Consequently, proponents of weak sustainability argue that critical natural capital cannot legitimately be substituted by human-made forms of capital in any proposed intergenerational bequest.

Advocates of strong sustainability take a firmer line still, arguing that non-renewable natural resources should not be depleted by the present generation unless adequately enhanced stocks of renewable natural resources arc passed on in their place. The concern here is on maintaining stocks of natural capital and is based on a number of consid- erations, including the high degree of uncertainty that exists about the functioning of ecosystems, the irreversibility of some forms of natural resource depletion and degradation, and the sense of loss experienced by many individuals when natural capital is replaced by human-made capital. As with supporters of weak sustainability, proponents of strong sustainability rule out any substitution involving critical natural capital. However, supporters of strong sustainability argue that the concept of criticality should be more broadly defined to encore-

Table 3 Strong and weak versions of the sustainable development imperative, after Turner 4"

Version Objective Rules for compensation

Weak sustainability

Strong Sustainability

Maintenance of aggregate capital stocks, i.e. the sum of natural, human-made and socio- cultural capital.

Maintenance of the natural capital stock, irrespective of the status of the aggregate capital stock.

Very Weak Sustainability permits the free substitution of natural capital with human- made capital.

Weak Sustainability permits the substitution of natural capital with human-made capital, subject to appropriate maximum and minimum ecological constraints.

Strong Sustainability permits the substitution of one form of natural capital for another, subject to various minimum and maximum ecological constraints.

Very Strong Sustainability advocates a steady-state economy with zero population growth. No substitution of natural resource stocks is permitted.

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pass the intrinsic as well as the instrumental values associated with critical natural capital.

Proponents of very strong sustainability, meanwhile, take the strictest line of all, arguing that non-renewable resources need not be exploited at all, given that renewable resources can generally be identified as technically viable alternatives. Indeed, where such alternatives cannot be identified, the economic activities themselves can very often be abandoned without any substantial negative impact on human wellbeing. In some cases human wellbeing may actually be enhanced. The very strong sustainability perspective therefore argues for a steady-state economic system, based on the use of renewable resources and operating entirely within the strict limits imposed by the natural environment. While continued economic growth is ruled out, further human development is not, provided that development is reconceptualised to emphasise the non-material elements of human wellbeing.

It is important to note, however, that in spite of the evident diversity of opinion as to what constitutes an appropriate rule for maintaining capital stocks, making any of them workable in practice requires that the relevant stocks and/or flows are effectively measured. Unless capital stocks are measured it will not be possible to state with any genuine conviction that whichever is chosen as the basis for the constant capital rule has or has not remained constant over time. Discussion of what form of sustainability the tourism industry should espouse therefore appears somewhat premature when no means has yet been established of determining the industry's progress towards (or potentially away from) achieving it. But what form of measurement process is appropriate and within what kind of accounting framework should measurement best be conducted? It is to these particular issues that the discussion now turns.

Establishing a framework for measuring progress towards sustainable tourism

The previous section of this article suggests that in order for the concept of sustainable tourism to be implementable, some form of measurement framework must first be established within which progress towards the attainment of sustainability, in whatever form is chosen, may be meaningfully assessed. This section discusses two possible approaches, which may be characterised as the 'macro' and 'micro' approaches respectively.

The macro approach: balance sheets

The first approach involves the use of balance sheets, in which stocks and flows of relevant capital assets, both human-made and natural, are accounted for using conventional accounting techniques. By recording flows to and from the appropriate capital

Beyond the rhetoric o['sustainable tourism?: B Garrod and A Fyull

stock it should be possible to establish whether, over a given period of time, there has been an increase, no change, or a decrease in the stock of capital in question. Depending on how the capital stock is defined, the first and second of these outcomes would normally signify the achievement of a sustainable relationship between tourism and its environment (according to the constant capital rule described previously), while the third outcome would normally signify an unsustainable relationship.

The incorporation of human-made capital stock into a sustainability balance sheet, really presents no particular problem in the case of the tourism industry. Indeed, human-made capital stocks have been routinely measured and recorded in most countries for many decades, in the course of constructing sectoral, regional and national economic accounts. What is more problematic, however, is the integration of natural capital. Only a handful of countries have made significant progress to date in attempting to develop natural resource accounting systems. In even fewer cases are these compatible with accounting systems for human- made capital. The reasons for the delay are not difficult to discern. One reason is that human-made capital lends itself more readily to being measured in monetary terms. This means that there is a readily applicable measure available to act as the unit of account in whatever accounting system is employed. Another reason is the generally anthro- pocentric focus of modern society, which tends to concentrate more on the scale of human achievement (in terms of adding to the stock of human- made capital) than on reflecting on the extent of nature's provision. It is therefore perhaps not entirely surprising that only a few countries have yet made any substantial efforts to develop a working system of natural resource accounts, the notable exceptions being Norway, France and, to a lesser degree, Canada. The extent to which these systems have been successfully employed is discussed in Pearce et al. ,5

Table 4 shows how a balance sheet using both physical and monetary measures might be used for the purposes of natural resource accounting. Although this example relates to the forestry sector, the methodology could easily be adapted to the context of tourism. Interpreting the figures shown in this table, which are hypothetical, it can be seen that the opening stock of 100 units (presumably of biomass) has been reduced in physical terms by 15 units. However, over that same time period the unit value (i.e. price less extraction cost) has risen from £1 per unit to £3. Taking an average unit value of £1.60 over the time period, the value of the stock can be shown to have increased from £100 to £255, signifying an increase in the value of the capital stock over the period concerned.

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Table 4 Sample forestry accounts, following Repetto et al . 4~

Physical Unit Value Basis of Units Value (£s) Calculation

Opening Stock 100 100 100

Additions: Discoveries 20 1.60 32 Revisions (30) 1.60 (48) Extensions 15 1.60 24 Growth 0 1.61) 0 Reproduction 0 1.60 0

Reductions: Production (20) 1.60 (32) Deforestation 0 1.60 0 Degradation 0 1.60 0

Net Change (15) 1.60 (24)

Revaluations: Opening Stock Transactions

Closing Stock

- - 200 100 x (£3.00-£1.00) - - (21) 15 x (£3.00-£1.60)

85 3.00 255

The authors go on to suggest that there are three ways in which these changes in the natural capital stock can be interpreted:

(1) The first is to conclude that the capital stock has increased by £155, on the basis that its monetary value has increased by that amount. The problem with adopting this approach is, however, that it would lead to immense fluctuations in those countries where the natural asset base is subject to large price variations over time.

(2) The second would be to take the absolute physical depletion of the resource base, i.e. 20 units, and value this at the average price over the time period concerned, i.e. £1.60. This would imply that the capital stock has been reduced by £32.

(3) The third, which is the one recommended by Repetto et al., is termed the 'net price method'. This approach takes the net physical depletion of the stock, i.e. 15 units, and then multiplies this by the average price over the period concerned, i.e. £1.60. This would signify that the capital stock has been reduced by £24.

Note that by concentrating on flows to and from the capital stock, the second and third of the approaches outlined above are able to deal with the distorting effects of price rising to reflect the increased scarcity of a resource that is becoming depleted or degraded over successive generations. As any economic resource is depleted we would expect its price to rise accordingly, and this would imply that the fall in value of a resource stock undergoing economic exploitation would be moder- ated. In fact it might actually remain fairly constant over time, so that resource depletion or degradation,

even of the most serious kind, might simply go undetected within a value-based balance sheet approach. By examining flows to and from the capital stock, however, the second and third of the methods outlined above ensure that the value of resource stocks that are being depleted or degraded will fall over time.

A more important complicating factor is that the resulting implications for sustainability may vary according to which form of sustainability is adopted. According to the strong sustainability view, for example, the data shown in Table 4 would imply that a sustainable relationship between the economy and the forestry sector has not been achieved. It is clear that the natural asset base is being depleted by the economic activity it supports. Regardless of what is happening to the aggregate stock of capital, this denotes an untenable situation in strong sustainability terms. In order to assess the situation in terms of the weak sustainability view, on the other hand, further information would be required on the other capital stocks employed by the sector in question in order to identify whether the aggregate capital stock has increased or decreased. If, for example, the human-made capital stock has increased as a result of economic activity under- taken in this hypothetical case, then it might be possible that the increase in the human-made capital stock would outweigh the depletion of the natural capital stock, implying an increase in the aggregate capital stock and a sustainable relationship between the economic activity and the environment. Note, however, that information on changes to the human- made capital stock may well already exist as it is often routinely collected for sectoral, regional and national accounting purposes.

The above example relates to forestry. In terms of the tourism sector, however, the available evidence seems to suggest that the imperative of establishing and maintaining natural resource accounts or environmental balance sheets has not been widely recognised. While a number of tourism 'satellite accounts' have been developed, L" these deal almost exclusively with mainstream economic data, such as hotel capacities, labour force characteristics, visita- tion rates and types of tourist expenditure. None appears to have attempted to extend the methodology to enable sustainability conditions to be monitored and assessed. Nor, indeed, does it appear that the industry has any firm intention to do so in the near future. '7

The micro approach: cost-benefit analysis Clearly the macro approach identified above is an ambitious one. It involves establishing and maintaining some form of balance sheet for the tourism sector, in which all of the relevant flows to and from the various capital stocks used by the sector would be recorded and evaluated. If,

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however, some flows to and from the capital stock are neglected there is a very real danger that the balance sheet will yield misleading results.

One possible response might be to adopt an equivalent 'micro' approach to the problem of assessing sustainability, based at the level of individual investment projects rather than the tourism sector as a whole. This would involve the use of investment appraisal techniques to determine whether or not any new investment in the tourism sector is compatible with whichever sustainability rule is to be applied to the sector as a whole. There is no shortage of practical experience in the use of these techniques, which are very well established in the real world context. Indeed, investment appraisal from a broad societal perspective (known in this context as cost-benefit analysis, or CBA) has been used since the 1930s to assess the social desirability of large public investment projects. 1~

For the most part, however, CBA has tended in practice to focus mainly on changes to the human- made capital stocks employed by the economic activity in question, the implications of the project for the natural environment having rarely been included. The integration of environmental consid- erations into CBA is evidently further advanced in some countries than in others. In the USA, for example, the Environmental Protection Agency has for many years been charged with using CBA to assess all major public investment and policy proposals, l' One of the effects of this has been to stimulate the building up of expertise in the economic techniques required to assess projects and policies from a wider social perspective, including their impacts on the socio-cultural and natural environments. In most other countries, however, CBA is obligatory only for the largest and most sensitive of investment projects.

But this is not to suggest that CBA cannot be useful in this context. Pearce et al., 2° for example, note that the present practice of CBA really only requires two modifications for it to be made useful in evaluating sustainability:

(1) To include environmental costs and benefits in the overall weighing up of the net worth of the project.

(2) To include a 'screening device' to ensure that only 'sustainablc' investment projects are permitted to proceed.

Let us deal briefly with these modifications. The first is in fact relatively straight-forward. Mathe- matically, the cost-benefit rule is as follows:

~](B, C , ) ( l + r ) ~ > 0 (1) i

where Bt is the benefit in time period t, Ct is the cost in time period t and r is the discount rate. This rule says that in order for a project to be considered socially beneficial, the sum of its net discounted

Beyond the rhetoric of sustainable tourism ?." B Garrod and A Fyall

benefits over its entire lifespan must be positive (following the Kaldor-Hicks criterion for maximising social welfare). In order to incorporate environmental costs and benefits, the CBA rule must be adapted as follows:

Z ( B , - C , + D , - E , ) ( I +r) ' >0 (2) t

where the added variables, D, and Et, represent the environmental benefits and costs respectively associated with the project in time period t.

In order to be useful in the context of CBA, these environmental costs and benefits would of course have to be measured in monetary terms; otherwise they could not meaningfully be compared with the other benefits and costs of the project, B, and Ct.

There are two main problems, however, even with this extended rule. The first is that it does not, in itself, guarantee that a given project will meet the weak sustainability rule (which requires that the aggregate capital stock should not be depleted as a result of the investment project in question). The problem is that if the non-environmental net benefits included in the analysis ( B , - C , > 0) take the form of consumption rather than investment, then full compensation for any net environmental costs ( D , - E , < 0 ) is by no means guaranteed, since weak sustainability implies that the loss of environmental capital must be compensated for by equivalent additions to other capital stocks.

The second problem with the adapted CBA rule presented above is that it cannot really cope with the concept of strong sustainability, which requires that the natural capital stock be held at least constant over time. Clearly, in the above example projects would be considered socially acceptable even if they included net environmental costs at any point in time; provided that the sum of the non-environmental net benefits is sufficient to cover the sum of these over the lifespan of the project. This contravenes the strong sustainability imperative, which requires that natural capital stocks are maintained across the entire time span considered.

Pearce et al. argue, however, that both of these problems can be dealt with by using a 'sustainability constraint' at the programme level (a programme being a group of related projects). This constraint amounts to including within the programme of projects one or more 'shadow projects' which are designed specifically to enhance the natural capital stock (e.g. afforestation schemes, wilderness conservation programmes, and so on). At the programme level, therefore, the CBA rule for weak sustainability would become:

Y~ ~ ( B , C,,+D,,--Ei,)(I +r) ' >0 (3) t i

subject to:

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B~9,ond the rhetoric of sustainable tourism?: B Garrod and A Fyall

Y ~ , ( D , - E i , ) ( l + r ) '> ~, Y.(D,, E , , ) ( l+r) ' (4) I j t i

where the programme comprises I projects and J shadow projects. This top level rule serves to ensure that the discounted net environmental costs over the lifespan of the projects comprising the programme are fully compensated for by the discounted net environmental benefits afforded by the shadow project or projects. For shadow projects the usual CBA rule is abandoned and a cost-efficiency rule is applied instead. This requires that the net environmental benefits being sought are achieved by implementing the shadow project or set of shadow projects which generates the lowest possible economic cost.

According to the strong sustainability rule meanwhile, the CBA criterion becomes:

Z Z(B,,--C,,+D.--E.)(I+r) '>0 (5) t i

subject to:

~, ( D , , - E , ) > ~, (D,--E,,) .['or all t (6) I i

In principle, this would ensure that the natural capital stock as a whole is not depleted in any given time period, thereby meeting the constant capital rule according to the strong sustainability criterion. Again, it is proposed that the cost-effectiveness rule is applied to determine which shadow projects are implemented so as to ensure that meeting the sustainability criterion does not impose too heavy a burden of costs on society at large.

Proponents of very strong sustainability would argue that CBA is inappropriate as a tool for managing the relationship between an economic activity and the ecological system in which it takes place. The reason is that the methodology of CBA authorises the substitution of resources, so that the constant capital rule can be operationalised. Very strong sustainability forbids the substitution of natural capital, either with human-made capital or with other forms of natural capital, so that the CBA approach is deemed unsuitable as a means of achieving it. The macro approach, based on physical rather than monetary stocks and flows, might therefore be viewed as a more appropriate approach for achieving very strong sustainability.

With this reservation aside, it is clear that CBA has considerable potential as a methodology for achieving weaker forms of sustainability. It should be noted, however, that this potential is not widely accepted in the tourism literature. Sherman and Dixon, 2' for example, emphasise the importance of the CBA approach in the general context of tourism but do not go on to discuss how CBA might be relevant to the sustainable tourism debate. The

same is true of Bull 2-~ and Tribe, ~ who both discuss the usc of CBA in the context of tourism without making it's importance in implementing the concept of sustainable tourism entirely clear.

Making sustainable tourism operational The foregoing discussion has suggested two possible approaches to putting the concept of sustainable tourism into practice; the macro approach, which relies on the maintenance of environmental balance sheets, and the micro approach, which involves an adapted form of social investment appraisal. The previous section has also indicated the need to employ a common unit of account under cither of these approaches. By preference this should be a monetary one in order to provide for a common numeraire between the various natural and human- made capital stocks that are involved.

Monetao' valuation

The proposition that natural capital can and should be measured in monetary terms for the purposes of operationalising sustainability has attracted a great deal of controversy in recent years. Indeed, it is not uncommon for critics of the methodology of environmental economics to use the issue of monetisation as the centrepiece of their arguments. This is true even in the context of sustainable tourism, where Hughes has already presented a rehearsal of some of the standard arguments against attaching monetary values to natural capital5 ~ It seems necessary, therefore, that some brief clarification of the major arguments in favour of using monetary values in the context of sustainable tourism is made.

A central component in the argument in favour of monetary valuation concerns the relevance of non-market costs and benefits. Many authors have remarked upon the greater reliance of the tourism industry on the use of natural resources in comparison to most other service industries. -~' The implication for the issue of sustainable tourism is that, as a result, many of the resources employed by the tourism industry do not enter the market. Indeed, this is one of the main reasons why the sustainability issue has arisen in the context of tourism in the first place. Because market prices are rarely attached to natural resources used in the tourism production process, tourism suppliers tend to treat them as 'free goods' (even though they are not, since there are clearly opportunity costs implied in their use). The result is that natural resources often become overused and degraded in the process of tourism production. These are the 'environmental impacts' of tourism with which society is becoming all too familiar. The danger is that these impacts will continue to be ignored by tourism practitioners so long as they remain external to the calculus of their

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decision-making, which for better or for worse is generally expressed in monetary terms. The support given by environmental economists to the principle of monetary valuation is therefore not really intended as a vindication of the free market but as a recognition of its failure to take proper account of environmental impacts and concerns.

How then are the non-market costs and bcnefits of tourism to be identified so that they may be integrated into the tourism decision-making process? One way is to attach monetary values to them. This would enable the values associated with natural capital to be meaningfully correlated with the values society already explicitly attaches to human-made capital. Of course it could be argued that the standardisation process should be made to work in the opposite direction, with the measurement conventions of human-made capital being made to conform to those of measuring natural capital. The problem with this proposal, however, is that there is presently no accepted numeraire in the case of natural capital, so unless one is arbitrarily invented there is simply no standard to which the evaluation of human-made capital can conform. Money is already widely accepted as a common unit of account in the case of human-made capital. It also has the advantage that it is a concept that is readily understood, both by the public and, perhaps more importantly, by public decision-makersY'

For environmental economists, money is thought of merely as a convcnicnt measuring rod for people's preferences. -~7 Yet critics of environmental economics have often attempted to attach 'meaning' to the process of monetary evaluation, arguing that the monetisation of environmental impacts amounts to the 'commodification' of nature5 ~ It is important to recognise, however, that the monetisation approach is usually recommended on pragmatic grounds. An illustration will serve to reinforce this point. Paintings by the great masters are generally held to be 'priceless', meaning that they are beyond value, but society still requires that they are valued in money terms for the pragmatic purpose of insuring them against damage by fire, water or human interference. Now the fact that fine art valuers are willing to place 'market values' on such paintings is not normally taken to signify that they would advocate wantonly destroying them. Human- made assets can be valued yet held to be beyond the status of a 'commodity'. The same is true of natural assets.

Before moving on, an important caveat to the arguments that have been put forward in this section must bc noted. The scope for monetary valuation is by no means universal. In particular, environmental economists have long recognised that the methodology is not especially applicable when it comes to the assessment of critical and catastrophic environmental impacts, e.g. the extinction of a keystone

Bo'ond the rhetoric of sustainable tourism ?: B Garrod and A l),'all

species. Folmer, Gabel and Opschoor put this succinctly in remarking that:

Even the most fervent advocates of monetizatkm would probably agree that there are a number of weighty measurement issues which are unique to environmental amenities, and which cannot easily be resolved, if at all. (For example) could any finite value be consistent with the welfare associated with the survival of humankind in the long run?~'" (p. 183)

Nevertheless, it would be wrong to conclude from this statement, as some seem to have done, that because the monetary valuation approach cannot be used in all circumstances, it should not be used under any circumstances. Monetary valuation is certainly not a panacea for the most serious environmcntal problems faced by today's society, but that is not to say that it cannot possibly be useful in evaluating certain marginal environmental impacts of tourism.

Non-market valuation techniques

Environmental economics has a substantial track record in applying monetary valuation techniques to the assessment of non-market costs and benefits. While the potential for applying such techniques in the context of tourism is now being recognised, ~"~' only a handful of non-market valuation studies have as yet appeared in the tourism literature. Few of these refer explicitly to the issue of sustainability and fewer still go on to use the results they generate to conduct some form of cost-benefit analysis. None addresses the potential for employing sustainability constraints and none appears to havc considered the balance sheet approach.

Non-market valuation techniques are often grouped into 'expressed preference methods', such as the contingent valuation method (CVM), and 'surrogate market methods', such as the hedonic pricing method (HPM) and the travel cost method (TCM). A useful review is provided by Green et al. 3"- While the former attempt to elicit values associated with non-market cnvironmental costs and benefits by directly questioning the public on their preferences, the latter search for such values by examining people's revealed preferences in markets where these same environmental costs and benefits are reflected. A brief review of published studies reveals that of the range of possible non-market valuation techniques, CVM is presently that which is finding greatest favour among environmental economists. Table 5 details a selection of recent studies employing CVM in the context of tourism.

The content of Table 5 is clearly selective and is not intended to provide an exhaustive review of studies employing CVM in the tourism context. The table does nonetheless serve to demonstrate that CVM has been used to good effect in a range of contexts, including the evaluation of certain social impacts of tourism, the estimation of tourism-

209

Beyond the rhetoric q f sustainable tourism?: B Garrod and A Fyall

Table 5 Selected CVM studies relating to tourism

Author(s) Date Location Subject

Penning-Rowsell et al. 5'' 1992

Tunstall and Coker "~ 1992

Hanley and RuffelP e 1993 Willis and Garrod '~ 1993

Bateman et al. ~ 1994

Willis "' 1994

Bostedt and Mattsson "' 1995 Pruckner ~" 1995

Willis el al. 5~ 1995

Powe and Willis <' 1996 Lindberg and Johnson "~' 1997

Hastings beach, Herne Bay seafront, UK

Ten public beaches in England

Recreational use of British forests Yorkshire Dales National Park, UK

Norfl)lk Broads and Yorkshire Dales National Parks, UK

Durham Cathedral, UK

Haraj6m~ala and Arjcplog forests, Sweden Austria

Somerset Levcls and Moors and South Downs, UK

Northumbria, UK Oregon, USA

Mean enjoyment per visit by tourists and local residents

Value of enjoyment per visit by visitors and local residents

Value of access to forests with varying characteristics Willingness to pay for a variety of landscapes and

landscape features Willingness to pay to preserve current landscapes

Maximum willingness to pay for entry, if a charge were to he imposed

Value of enjoyment by tourists of forest visit Tourists' willingness to pay for landscape services

provided by the agricultural sector Benefits of Environmentally Sensitive Area (ESA)

status for local residents and visitors Benefits received by visitors to Warkworth Castle Reduction in tourism-related traffic congestion

related environmental damage impacts and the valuation of built heritage assets used by the tourism sector.

This is not to suggest that the use of CVM is entirely unproblematic. A number of troublesome issues in operationalising CVM remain, including the issue of weighting individual responses to CVM studies so that intragenerational equity concerns may be accommodated, 3-~34 the need to minimise the administrative costs involved in conducting CVM studies, 35~' and the remaining problem of response biases associated with CVM? 7~ Such issues are important but it should be borne in mind that the stated purpose of this article is not to present an exhaustive critique of the methodology and techniques of environmental economics. Rather, it is to highlight the issue of implementing sustainable development and to outline a possible avenue of progress for the tourism industry.

Concluding remarks This article has suggested a methodology for implementing the concept of sustainable tourism. This methodology relies on applying the so-called 'constant capital rule', as developed within the field of environmental economics, which serves to objecti- vise the concept. While some tourism researchers evidently fccl unsettled by this approach, it can be argued that the real threat to tourism is not the objectivisation of the concept of sustainable tourism but its present vagueness. Indeed, the importance of applying an objective rule for achieving sustainability is made clear by McKercher, 3' who argues that so long as the term remains subjective, it remains capable of being interpreted differently by different groups and factions associated with the tourism industry, each with their own particular

interests and viewpoints, thereby exacerbating resource use conflicts within the tourism industry rather than resolving them.

While the constant capital rule is itself open to a number of different interpretations, including 'weak' and 'strong' versions of the conditions required to meet it, this article puts forward two broadly equivalent approaches, either of which may potentially serve as a framework for applying the constant capital rule according to whichever interpretation is adopted. These are described as the 'macro ' and 'micro' approaches, the former involving the use of environmental balance sheets to measure and evaluate sustainability conditions, the later involving the use of a modified form of social cost-benefit analysis at the level of individual tourism development projects. While the balance sheet approach may appear in some ways more ambitious than the modificd CBA approach, it does have the advantage of providing an overall picture of the degree of progress that is being made in pursuing sustainable tourism by the industry as a whole, while unfortunately the modified CBA approach does not. The CBA approach, meanwhile, has thc advantage that it evaluates sustainability in an ex an te manner, while the balance sheet approach can only make ex p o s t

evaluations of sustainability. This renders the CBA approach intrinsically more conducive to the process of planning tourism. Both of thcsc approaches demand that monetary values are placed on the relevant non-market costs and benef t s of tourism.

Finally, this article notes that the techniques required for attaching monetary valuations to the non-market costs and benefits of tourism are now well-established in the theory of environmental economics and have already been applied to good effect in a wide range of tourism-relevant contexts. What seems most at doubt at present, however, is

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the willingness of the tourism industry to apply them. Many academics have been keen to consider how sustainable tourism must be defined in principle. Yet if the sustainability imperative is as urgent as everyone keeps saying it is, then the debatc must look to move forward to the next and far more important stage of determining what it means in practice. This article has discussed one particular methodological approach. This is not to suggest that other approaches are neither possible nor morc desirable; it is high time those approaches too were considered in greater depth.

A c k n o w l e d g e m e n t s

Thanks are due to Marion Jackson, Professor John Latham and Mike Stabler for their comments on previous versions of this article. The comments of two anonymous referees were also greatly appreci- ated. Any errors that remain are the responsibility of the authors.

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Received July 1997 Accepted November 1997

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