Does Eco-Certification in the Tourism Industry Pay?

Nov 8, 2012

Does Eco-Certification in the Tourism Industry Pay?
RFF Feature
November 8, 2012
Costa Rican beach

In developing countries, tourism often revolves around beaches, forests, and other natural resources. But that tourism—and the infrastructure and economic activity it spurs—can do serious environmental damage. According to advocates, voluntary, private-sector eco-certification programs that verify that tourism businesses adhere to defined environmental standards can help. But to do that, they must provide incentives for businesses to participate, such as price premiums and more customers. Very little is known about whether they actually do that.

In a new RFF discussion paper, “Does Eco-Certification Pay? Costa Rica’s Blue Flag Program,” RFF Senior Fellow Allen Blackman and his colleagues provide some of the first hard evidence that eco-certification in the tourism industry of developing countries can benefit local businesses.

They examine the Blue Flag Program, a leading international tourism eco-certification program in Costa Rica. The authors determine that investment in new hotels is positively and significantly correlated with Blue Flag certification, and note:

“[Our findings] suggest that these programs are apt to attract operators and at least have the potential to improve environmental quality. Moreover, they may boost local economies. These capabilities are particularly important in the developing country context, where conventional command-and-control environmental management tools are often if not typically ineffective and where concerns about economic growth often trump worries about environmental protection.”​