Working Group II: Impacts, Adaptation and Vulnerability

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15.2.6. Tourism and Recreation

Figure 15-5: Insured natural disaster losses have increased 10-fold in North America between 1969 and 1999 (based on 5-year running mean). Data include nonweather-related losses (~15% of total). Sources: Emergency Preparedness Canada, 2000; Kunreuther and Roth, 1998 (United States).

Tourism is a major sector of the global economy, with global receipts from international tourism of US$439 billion in 1998. With a projected annual growth rate of 6.7%, annual international tourism expenditures are expected to surpass US$2 trillion by 2020 (WTO, 1998). The United States and Canada were among the top 10 tourism destinations in terms of international tourist arrivals, with related 1998 receipts of US$71 billion and US$9 billion, respectively (WTO, 1999). Domestic tourism is many times more important in terms of participation and economic activity. The magnitude of the implications of climate change for the tourism and recreation sector will depend on the distribution and importance of tourism and recreation phenomena and the characteristics of climate change and variability. In the United States, the Pacific and south Atlantic regions are major providers of tourism and recreation opportunities. However, if population distribution is taken into consideration, less populated areas often have high economic dependence on tourism and recreation.

One critically important dimension of the tourism and recreation sector that will be sensitive to climate change is the length of the operating season. Any changes in season length would have considerable implications for the short- and long-term viability of tourism and recreation enterprises. In Canada, where 43% of domestic and 62% of international tourism expenditures take place in July through September, an extended warm-weather recreation season is likely to be economically beneficial (Wilton and Wirjanto, 1998). The limited regional studies of golfing, camping, and boating that are available reinforce this conclusion (Wall, 1998a,b). This positive outlook must be tempered with the possibility that economic benefits may occur at the expense of increased environmental deterioration, as destinations host more visitors for longer periods of time. These concerns will be particularly relevant for national parks and other natural areas, which may need to establish "no-go" zones or visitation limits.

Conversely, winter recreations—such as downhill skiing, cross-country skiing, snowmobiling, ice fishing, and other activities that are dependent on snow or ice—as well as the businesses and destination areas associated with them are likely to be impacted negatively. Case studies from the Great Lakes (McBoyle and Wall, 1992) and New England (Bloomfield and Hamburg, 1997) regions indicate that the vulnerability of ski resorts will differ considerably, depending on location (latitude and altitude) and adaptations (snowmaking) to offset or compensate for the effects of less reliable snow conditions. Another potential adaptive strategy is diversification of activities to ensure that investments in property and infrastructure generate income and employment for much of the year. Without analysis of the impacts of altered snow conditions for major ski areas in the mountain ranges of western Canada and the United States and the large snowmobile industry in both nations, the economic impact to the winter recreation sector in North America remains uncertain.

Perhaps as important as changes to season length will be the impact of climate change on the availability and quality of the resource base on which recreational activities depend. Below-average Great Lakes water levels in 1999 again revealed the sensitivity of marinas and the substantial recreational boating industry to climate variability. Similarly, the impact of the 1988 drought on Prairie wetlands and waterfowl breeding success is illustrative of the potential impact of climate change for this sport-hunting resource. Global warming is anticipated to modify many other ecosystems on which outdoor recreations depend. Parks and other natural areas are important tourism and recreation resources whose attractions are based to a considerable extent on the species they conserve and the ecological processes they sustain. A climate change assessment of Canada's National Park system (Scott and Suffling, 2000) indicates that 75-80% of the parks would experience a shift in dominant vegetation under 2xCO2 scenarios. Analysis of vegetation response in the Yellowstone National Park region in the United States revealed regional extinctions and the emergence of communities with no current analog (Bartlein et al., 1997). Moreover, a global analysis of habitat change resulting from climate change found that more than 50% of the territory of seven Canadian provinces and greater than 33% of the territory in 11 U.S. states are at risk (Malcolm and Markham, 2000). Although this will pose an unprecedented challenge to the conservation mandate of protected areas, the impact of ecological changes on tourism remains uncertain.

Figure 15-6: Ratio of property/casualty insurance premiums to catastrophe losses. This measure of exposure ranges from 180:1 in 1974 to 52:1 in 1999, with a minimum value of 27:1 in 1992 (the year of Hurricane Andrew). For Canada, the high value is 161:1 in 1990, and the low value is 37:1 in 1999. U.S. premiums are from AM Best and insured natural catastrophe loss figures are from Property Claims Service (Kunreuther and Roth, 1998). Canadian premiums are from Insurance Bureau of Canada (2000) and losses are from Emergency Preparedness Canada (2000). Note that premiums include revenues from nonweather-related business segments.

Figure 15-7: Vulnerability of U.S. insurers to 100-year events, represented as combined effect of loss magnitude and insurance company capacity (GAO, 2000). This analysis assumes that all insurers place and price policies identically. It excludes reinsurance, as well as local government-supported insurance or reinsurance programs in California and Florida. It also excludes effects of catastrophes striking more than one state (e.g., estimated 1-in-100-year loss for the entire United States is $155 billion). Capacity implied may include some surplus amounts that are not available for paying natural catastrophe claims. Losses that result in claims of more than 20% of surplus trigger initial stage of formal solvency review by National Association of Insurance Commissioners. Puerto Rico (not shown) has a 1-in-100-year loss of US$27.1 billion.

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