Economic incentives for tourism firms to undertake voluntary environmental management

Abstract The management of natural assets at tourism destinations has relied strongly on the traditional assumption that agents free ride. Tourism firms are expected to overuse resources for their private interest, and be subject to a trade-off between being green and being competitive. However, there are many examples of voluntary environmental actions undertaken by the tourism industry. The present paper reviews the literature on the economic consequences of voluntary environmental action taken by tourism firms and presents three challenges to the commonly held ‘tragedy’ expectations. These results suggest the viability of alternative environmental policymaking that takes potential voluntary action under consideration.