Demand Driven Environmental Preservation

Traveling through the Straits of Malacca from Malaysia to Thailand, there is a gradual, yet distinctive change in water clarity and the number of tourists. From Pangkor to Phuket, the water has changed from muddy brown with shades of grey, to shimmering emerald blue with thirty foot visibility. Similarly, we've witnessed the change from struggling tourist resorts to bustling and booming islands full of bungalows and European travelers. It would be easy to assume that water clarity and tourism were positively correlated, if not causal.

In many recreational demand studies in the US, this relationship has been shown to hold. Researchers use a tool called a 'secchi disk.' This is a simple flat disk on a string with alternating black and white quadrants - water clarity is quantified by the depth at which the disk is no longer visible. Low and behold, with all else held constant, clearer lakes get more visitors.

In a part of the world where incomes are low and tourists are a valuable source of revenue, it is empowering to see the positive impact that tourism can have on the environment. In touristy areas there is markedly less trash floating in the water, new construction projects utilize stormwater retention ponds, and open greenspace is set aside for recreation or animal habitat. There are fewer fishing boats as well, possibly due to higher incomes available in the tourist industry, thus lowering fishing effort and increasing the stock of fish (re-read our 'Econ Week' post on the Gordon Fisheries model).

Tourism's positive impact on the environment has been visible in many places on our journey:

- Snorkeling in the South Pacific has led to extensive reef preservation programs.

- Scuba diving with sharks in Fiji has made these ecologically important animals more valuable in the water than as sharkfin soup.

- Orangutan tours in Borneo have led to massive tracts of land being set aside as wildlife preserves, in turn protecting many other types of fauna and flora.

Tourism, and eco-tourism in particular, need to be embraced as effective tools for environmental preservation in the third world. However, they are only an effective 'first step.' Any biologist will tell you that water clarity can be a misleading metric for ecosystem health, and tourist-driven environmental preservation will naturally place a higher value for 'charismatic mega-fauna' such as sharks, orangutans, and crocodiles, ignoring the feebler bugs and mosses of the world.

However, in eastern Indonesia, where magnificent volcanic landscapes and beautiful beaches were marred by a layer of garbage, a couple sunburned tourists wouldn't necessarily be a bad thing.