From Reuters: Maldives to introduce green tax on tourists
What's going on here? Is this a Pigouvian tax or something else?
Charging tourists an extra "environmental fee" in hopes of raising funds for conservation efforts (or simply for adding to general revenues) is nothing new. Examples are found all over the world.
Tourism can create significant environmental impacts and can exacerbate the depletion of natural resources. In that sense, a Pigouvian tax is an appropriate means for internalizing a negative externality.
We should also expect (following the law of demand as the supply curve shifts back) that any increase in price will decrease quantity demanded, resulting in less crowding and better environmental quality (or at least a slowed rated of environmental degradation).
The fee therefore seems like a win-win... does anyone see a down-side?
Other examples of such fees? Have they been sucessful?