ABSTRACT
This chapter examines strategies for utilizing environmental economics to enable the development of the leisure and tourism sector to take place with due regard to possible side effects. The aim of such analysis is to prevent the side effects of development causing socially unacceptable damage to the environment or indeed to stifle the very developments themselves. The chapter defines key terms such as sustainable development, intergenerational equity, natural capital and regenerative capacity. It demonstrates how to apply techniques such as social cost–benefit analysis, and how to price the environmental using WTP method, hedonic pricing, travel cost method, dose–response method, replacement cost technique and mitigation behaviour. It considers environmental policies under the headings of direct regulations, market-based incentives and soft tools and advocates a paradigm change in economic thinking to achieve a sustainable future. This chapter enables the reader to:
explain the meaning of sustainable development;
understand the meaning of sustainable tourism as a subset of sustainable development;
understand the limitations of the price mechanism in allocating resources in respect of environmental considerations;
utilize different instruments for mitigating environmental impacts;
evaluate a variety of methods to impute value to unpriced externalities;
understand the meaning of adaptation to environmental impacts.
