Economic instruments

Taxes and charges
These measures work through factors, namely cost, price and income, which have llong proven to be major influences on the choices and decisions made by enterprises and consumers. They can be applied flexibly and adjusted readily. However, they are indirect instruments, and it is therefore difficult to be sure that the net effect will be that which was intended. Imposing taxes and setting charges can have two important consequences for the sustainability of tourism:

• Changing the behaviour of consumers and enterprises, through their effect on prices, costs and income. Taxes and charges can be constructed so as to penalize unsustainable practice such as pollution, and to change the pattern of demand.
• Raising revenue from consumers and enterprises that can be used to mitigate impacts and support actions such as conservation or community projects that lead to greater sustainability. For this to happen, taxes should be hypothecated—i.e. constructed in such a way that the revenue raised is restricted to specific types of use rather than simply going into the general public purse.

Financial incentives and agreements are economic instruments that influence the behaviour of enterprises by providing them with specific financial support or commercial opportunities provided
that they act in a certain way. Government action may involve:

• Providing financial support and opportunities themselves.
• Influencing and working with development assistance agencies whose policies in recipient countries are increasingly influenced through priorities and programmes agreed with governments.
• Influencing the financial decision making policies and actions of commercial sources of finance. (UNEP/WTO, 2005)

	Financing Sustainable Tourism Conference, Planeta.Com (2002)
	Horizon 2020 Initiative
	IAPMEI, Portugal
	Official EU Internet Guide to EU Support for Tourism Enterprises and Tourist Destinations
	Road Map to Tourism Financing , Canadian Tourism Commission (1999)Finance Tips for Tourism SMEs, Canadian Tourism Commission (2001)
	The IFC (International Finance Corporation) commitment to a Sustainable Tourism