BY THE OPTIMIST DAILY EDITORIAL TEAM
Hawaii made history by becoming the first U.S. state to implement a climate impact fee aimed at funding environmental stewardship and climate resilience. Officially signed into law as Act 96, the so-called “Green Fee” will increase the state’s transient accommodations tax (TAT) by 0.75 percent beginning January 1, 2026. This raises the overall TAT to 11 percent, applying to hotel stays, short-term rentals, and for the first time, cruise ship accommodations.
“As an island chain, Hawaii cannot wait for the next disaster to hit before taking action,” said Governor Josh Green. “We must build resiliency now, and the Green Fee will provide the necessary financing to ensure resources are available for our future.”
For context, a traveler staying in a hotel with a nightly rate of $300 would see an additional $2.25 added to their bill under the new fee. Though small per night, this levy is projected to raise approximately $100 million annually.
A targeted response to climate-driven disasters
The urgency behind the measure stems in part from Hawaii’s experience with climate-intensified natural disasters. The 2023 Maui wildfires, which claimed over 100 lives and destroyed homes, businesses, and cultural landmarks in Lahaina, were a pivotal moment.
In the aftermath, Governor Green convened the Climate Advisory Team (CAT) to develop strategic policy responses to climate threats. One of CAT’s central recommendations was to establish a dedicated funding stream for mitigation and disaster preparedness.
“The Green Fee bill marks a historic investment in climate disaster resilience and environmental protection,” said CAT leader Chris Benjamin. “Using the TAT to fund resiliency projects ensures that the financial burden of safeguarding our ‘āina (land) and people doesn’t fall upon residents alone.”
Cruise passengers now included
A notable change under Act 96 is the inclusion of cruise ship passengers. Previously, these travelers were exempt from Hawaii’s TAT. By including them, the law promotes greater equity across the tourism industry.
Future Green Fee-funded projects will be confirmed in the upcoming legislative session. Priorities include climate and hazard resiliency efforts, sustainable tourism programs, and environmental restoration.
How “Green Fees” are gaining global momentum
Hawaii joins a growing list of destinations introducing tourist taxes in response to environmental pressures. In 2023 alone, Greece, Bali, and the Galápagos Islands either launched or raised fees to support conservation and sustainability.
Experts note that the effectiveness of such fees depends heavily on execution. While modest charges like Venice’s entry fee haven’t reduced tourist numbers, other programs have successfully channeled tourism dollars into impactful environmental work.
For Hawaii, the hope is that the Green Fee not only funds needed infrastructure but also encourages more mindful tourism. “It’s about ensuring visitors help us protect what makes Hawaii so special,” said Green. “Our environment is our economy.”
