From Iceland — Less Is More

Less Is More

Published April 28, 2014

The Nature Pass is not in line with sustainable tourism

Less Is More

The Nature Pass is not in line with sustainable tourism

Following the economic collapse in October 2008, the tourism industry became the fastest growing sector of Iceland’s economy. Today, it is the biggest breadwinner, earning more foreign currency than any other sector. 

The problem, however, is that the industry is growing too fast to keep within the parameters of sustainable development. 

Whereas the relative success of Icelandic fisheries management is based on decades’ worth of data and research into the management of ocean resources, tourism has grown without much research-based management and it’s not clear how many visitors Icelandic nature can sustain. Given the dire straits of Iceland’s post-crash economy, the only way to finance the necessary investments in research, national parks and responsible management of the industry is to find new ways of financing and the obvious target is the tourist. 

Targeting High 
Revenue Visitors

In the fall of 2012, McKinsey and Company published a report called ‘Charting a Growth Path for Iceland,’ which advised that Iceland’s three resource-based sectors—marine, energy and tourism—focus on increasing value while keeping volume down. Much as it advised the energy sector not to keep prices too low as producing more energy won’t help unless value increases significantly, it recommended that the tourism sector focus on “targeting more high revenue visitors.” 

It’s a no-brainer that too many tourists overcrowding popular nature spots will ultimately damage or destroy the very resource on which tourism is based. And while most people agree that tourists and Icelanders alike should pay for its upkeep, the big question is: how? Arguably, a flat tax on all visitors, either upon arrival or departure, would be the simplest solution. It would also meet McKinsey’s recommendation of targeting high revenue visitors, while limiting the volume of tourists.

An Anathema To Volume-
Driven Business

This approach, though, is an anathema to airlines whose business models are based on increasing volume. It’s not surprising then that a consortium of companies including Icelandair, Europcar and Isavia commissioned a report from the Boston Consulting Group which advocated for the Nature Pass. In line with recommendations by the BCG, Minister of Industry and Commerce Ragnheiður Elín Árnadóttir, who wrote a foreword to the report, has strongly advocated the Nature Pass as the best solution. 

While foreigners may accept a fee for accessing valuable nature areas, Icelanders will not unless a clear case is made for nature conservation. Unfortunately, the aforementioned Ragnheiður and Prime Minister Sigmundur Davíð, who also wrote a foreword to the report, have not come across as very convincing nature conservationists. The Minister of Industry bent over backwards last summer in order to prevent the protection of the Þjórsárver wetlands. Meanwhile, the newly elected Prime Minister didn’t waste any time to mock NGOs for their critical comments on the Master Plan for Hydro and Geothermal Resources.

Another Gold Rush 
In The Making

The government seems quite unwilling to acknowledge that Iceland must limit the number of tourists in order to prevent permanent damage to heavily exploited areas such as Landmannalaugar and Herðubreiðalindir. The Nature Pass is about keeping up the numbers game, as it was put in the McKinsey report. Ultimately, this policy risks destroying Iceland’s nature, which is the basis for the tourism industry. So why not go with a flat tax on airfare if as much money can be raised to strengthen the infrastructure at a lesser cost to the industry and environment?

Part of the answer, I fear, is ideologically motivated. This government is opposed to the central management of resources, and to calling for a clear policy on how to manage protected natural sites. Worse still, the Nature Pass heralds a new era for landowners and small municipalities, allowing them to charge fees for access to sites they either claim ownership of or the right to manage. In the spirit of the Klondike Gold Rush, it’s already started at Geysir (although it is probably illegal). And let’s not forget, we have been there before.

See also:

You Shall Not Pass


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