Environmental Initiatives in the Hotel Industry: Environmental Certification and the Marginal Abatement Cost Curve (MACC) by Vivien Helena Yan A thesis presented to the University of Waterloo in fulfillment of the thesis requirement for the degree of Master of Environmental Studies in Geography – Tourism Policy and Planning Waterloo, Ontario, Canada, 2015 © Vivien Helena Yan 2015 Author’s Declaration I hereby declare that I am the sole author of this thesis. This is a true copy of the thesis, including any required final revisions, as accepted by my examiners. I understand that my thesis may be made electronically available to the public. Vivien Yan ii Abstract Climate change is a pressing issue that has and will continue affecting all industries and sectors. Some industries have used the Marginal Abatement Cost Curve (MACC) as an environmental-financial communication tool to decide which environmental initiatives to implement. This tool provides information on environmental initiatives with their associated costs in the form of positive and negative abatements. It is quite possible that the MACC can be adopted by the hotel industry. Currently, the hotel industry has tried to do their part by reducing the negative impacts by implementing environmental initiatives. Many types and areas of focus of environmental initiatives are available to hotels. These include environmental initiatives that would reduce and improve energy usage and efficiency, reduce waste, reduce water usage etc. The hotel industries’ commitment to reducing its’ negative impacts on the environment is strong. Environmental certification programs are considered one way in which hotels are actively showing environmental commitment. However, only a portion of hotels is certified under such programs. There exists hotels that are not certified under these programs, yet are still implementing sets of environmental initiatives. This study sets to create industry-specific information in order to assist hotels in making decisions to adopt more environmental initiatives. In particular, the study will explore whether environmental certification programs influence the adoption rates of environmental initiatives in hotels and therefore to understand the reception of the MACC tool in the hotel industry. Study findings suggest that hotels that are environmentally certified under programs adopt more environmental initiatives than hotels that did not certify. The study notes that the level of interest for a proposed MACC in the hotel industry is low, but indicates that the possibility exists. Further, the improvement and development of environmental certification programs could assist and increase environmental initiatives adoption rates. Key words: hotels, environmental certification, Marginal Abatement Cost Curve, environmental initiatives iii Acknowledgements Firstly, I would like to thank my advisor, Dr. Paul Parker, who sparked my passion for energy and sustainability during my undergraduate career. His love for energy sustainability, particularly in buildings, has helped me further realize my passion. Without his help, support, and guidance throughout all the roadblocks that surfaced, this thesis would not have been the same study it is today. Secondly, I would like to thank Dr. Ian Rowlands for stepping in as my committee member in the final stretches of my thesis. He has provided many thought provoking suggestions that have only increased the strength of my work. Thirdly, I am thankful for Lori McConnell, who has always responded to my e-mails with great support and provided me with additional resources when needed. In addition, I would like to thank Dr. Bryan Smale for assisting me in my statistical problems in his own time through e- mails and in person meetings. Lastly, the support from my family and friends has helped me through the challenges I faced, providing solutions and lending an ear. Without them, I would not be able to complete my thesis. I am very grateful for all the people who have cheered me on and supported me along the way. iv Table of Contents Author’s Declaration .................................................................................................................... ii Abstract ......................................................................................................................................... iii Acknowledgements ...................................................................................................................... iv Table of Contents .......................................................................................................................... v List of Figures ............................................................................................................................. viii List of Tables ................................................................................................................................ ix Chapter 1: Introduction ............................................................................................................... 1 1.1 Background ......................................................................................................................... 1 1.2 Energy usage in hotels ........................................................................................................ 2 1.3 Environmental action in the hotel industry ...................................................................... 3 1.4 Barriers inhibiting implementation of environmental initiatives in the hotel industry 3 1.5 Current progress in environmental sustainability in the hotel industry ....................... 4 1.5.1 Environmental Certification Programs .......................................................................... 4 1.5.2 Marginal Abatement Cost Curve (MACC) .................................................................... 5 1.6 Rationale of the study ......................................................................................................... 8 1.7 Goals and objectives of the research ................................................................................. 8 1.8 Thesis layout ........................................................................................................................ 9 Chapter 2: Literature Review .................................................................................................... 10 2.1 Types of environmental initiatives currently used by hotels ........................................ 10 2.1.1 Energy environmental initiatives ................................................................................. 10 2.1.2 Waste environmental initiatives ................................................................................... 12 2.1.3 Water environmental initiatives ................................................................................... 13 2.1.4 Education environmental initiatives ............................................................................ 13 2.1.5 Purchasing environmental initiatives ........................................................................... 15 2.1.6 Program environmental initiatives ............................................................................... 15 2.1.7 Site environmental initiatives ...................................................................................... 16 2.1.8 Hotel environmental initiative ..................................................................................... 16 2.1.9 Others ........................................................................................................................... 17 2.2 Environmental Certification Programs .......................................................................... 20 2.2.1 Third Party Certification .............................................................................................. 20 2.2.1.1 Green Keys Global Eco-Rating Program ......................................................... 20 2.2.1.2 GreenLeaders by TripAdvisor ........................................................................... 21 2.2.2 Hotel Programs ............................................................................................................ 22 2.2.2.1 Planet 21 ............................................................................................................... 22 2.2.2.2 InterContinental Hotels Group (IHG) Green Engage System ....................... 23 2.2.3 Other Environmental Programs ................................................................................... 23 2.2.3.1 Graduated grading system ................................................................................. 23 2.2.3.2 Non-graduated grading system .......................................................................... 24 2.2.3.3 Others ................................................................................................................... 25 2.2.4 Use of Environmental Classification Programs ........................................................... 26 2.2.4.1 Location ............................................................................................................... 26 v 2.2.4.2 Cost ....................................................................................................................... 27 2.2.4.3 Size of Programs ................................................................................................. 27 2.2.4.4 Program Minimum Requirements ...................................................................