Sustainable Tourism in a Low Carbon Economy: The Clark Freeport Zone Case Francisco L. Villanueva, Jr. Cited for “Best Paper Presentation” at the Green Innovation and Competitive Advantage Conference sponsored by the Ateneo de Manila University Graduate School of Business held on 4-5 December 2012 at the Ateneo Professional Schools, Makati, Philippines. 4 The Occasional Paper Series (OPS) is a regular publication of the Ateneo Graduate School of Business (AGSB) intended for the purpose of disseminating the views of its faculty that are considered to be of value to the discipline, practice and teaching of management and entrepreneurship. The OPS includes papers and analysis developed as part of a research project, think pieces and articles written for national and international conferences. The OPS provides a platform for faculty to contribute to the debate on current management issues that could lead to collaborative research, management innovation and improvements in business education. The views expressed in the OPS are solely those of the author (s) and do not necessarily reflect the views of AGSB or the Ateneo de Manila University. Quotations or citations from articles published in the OPS require permission of the author. Published by the Ateneo de Manila University Graduate School of Business Ateneo Professional Schools Building Rockwell Drive, Rockwell Center, Makati City, Philippines 1200 Tel.: (632) 899-7691 to 96 or (632) 729-2001 to 2003 Fax: (632) 899-5548 Website: http://gsb.ateneo.edu/ Limited copies may be requested from the AGSB Research Unit Telefax: (632) 898-5007 Email: [email protected] Occasional Paper No.12 1 Sustainable Tourism in a Low Carbon Economy: The Clark Freeport Zone Case Francisco L. Villanueva, Jr. Ateneo de Manila University Graduate School of Business Abstract or the sake of human survival, a low-carbon economy (LCE) has become an urgent solution to address climate change. As tourism has had a high growth rate for the F last few decades and has become one of the world’s most important industries, it is now necessary to assess the relationship between tourism and climate change as well as explore how tourism can be developed in a low-carbon economy. This paper will attempt to address these issues and see how they can apply in the case of the Clark Freeport Zone (CFZ). Inputs will come from a review of related literature, interviews with key players from the tourism sector and Clark Development Corporation (CDC)---the administrative body of the CFZ---and examinations of CDC’s corporate records. Based on initial estimates made by the author, it appears that the CFZ has a disproportionate share of the country’s carbon footprint and may need to make extraordinary efforts to address this. Abstract 2 Introduction he Clark Freeport Zone (CFZ), a former US Air base, has come a long way since the devastation brought about by the eruption of Mount Pinatubo in 1991. The 4,400-hectare T estate, with its airport, 70,000 strong workforce, and close to 600 locators, has become one of the country’s premier industrial, commercial, and tourism centers. There is, however, a dearth of research on the ecological sustainability of CFZ’s tourism sector. This paper will attempt to make preliminary estimates of the sector’s carbon footprint based on available information. It is hoped that such analysis will serve as precedence to more thorough studies of CFZ’s ecological sustainability. Background In the early 1970s, the Club of Rome commissioned a team of analysts from the Massachusetts Institute of Technology (MIT) to generate a computer model of various scenarios arising from unchecked economic and population growth in a world of finite resources. The disturbing scenarios projected by the report were contained in a book release in 1972 entitled, The Limits to Growth (Meadows, Meadows, Randers, & Behrens, 1972). This controversial book generated immediate and ongoing discourses from all sides on the impact on sustainable development (Turner, 2008). The call for countries to create policies aimed at sustainable development was first made in a report of the United Nations- sanctioned World Commission on Environment and Development (WCED) headed by Gro Harlem Brundtland in 1987 (World Commission on Environment and Development [WCED], 1987). In Occasional Paper No.12 3 the report, sustainable development was defined as “development that meets the needs of the present without compromising the ability of future generations to meet their own needs.” The first international attempt to develop a more sustainable pattern of development was during the United Nations Conference on Environment and Development of 1992 in Rio de Janeiro. The landmark event, also known as the “Earth Summit”, was attended by representatives of 172 national governments, including 108 heads of states, and 2,400 nongovernmental organization (NGO) representatives, and was able to solicit various governments’ commitment to support sustainable development. The United Nations’ Framework Convention on Climate Change (UNFCCC), also referred to as “The Convention”, executed a month earlier in New York was among the papers presented during the two-week summit. On December 11, 1997, the Kyoto Protocol to the United Nations Framework Convention on Climate Change (referred to as “Kyoto Protocol”) was entered into. The said protocol binds 37 industrial countries to reduce greenhouse gas (GHG) emissions to an average of 5 percent against 1990 levels starting from 2008- …heavier burden 2012. In a principle of “common but differentiated was placed more on responsibilities,” heavier burden was placed more the reduction targets on the reduction targets of the more developed of the more developed countries, because of their greater contribution to the world’s current GHG emission level (UNFCCC, countries, because 1998). of their greater contribution to the Subsequent initiatives in support of sustainable world’s current GHG development include the World Summit on Sustainable Development (WSSD)---also referred emission level to as the Johannesburg Summit of 2002; and the Monterrey Conference of 2002 that produced the Monterrey Consensus, the impetus for the Doha Declaration on Financing for Development (UNFCCC, 2009). Introduction 4 In July of 2005, Chancellor of Exchequer Gordon Brown commissioned Sir Nicholas Stern, a former World Bank chief economist, to head a team of economist who will review the economics of climate change. Their report, commonly referred to as the Stern Review, came out in 2006 and predicted a rise in the global average temperature of over 2 degrees Centigrade by 2035 with annual economic loses ranging from 5 percent up to 20 percent of the global GDP. In contrast, the report estimated the cost of actions to avoid the worst impact of climate change at about 1 percent of global GDP (Stern, 2006). The following year, the United Nations Intergovernmental Panel on Climate Change (IPCC) released their report, Climate Change 2007, the Fourth Assessment Report (AR4) of the UN IPCC, the largest and most detailed summary of the climate change situation produced by hundreds of authors from 45 countries and citing over 4,000 peer- reviewed scientific study. The report supports the Stern Review in unequivocal terms and projects possible rises in temperature as high as 0.2 degrees per decade for a range of emission scenarios or at least 0.1 degrees per decade even if GHG levels were kept constant at the year 2000 level (IPCC, 2007). The United Kingdom (UK) government has always been one of the early adopters of the tenets of sustainable development as professed by the various initiatives of the United Nations. According to the Department of Environment, Food and Rural Affairs (DEFRA, 2011), it was among the first to produce its national strategy for sustainable development in 1994. A white paper presented by the UK’s secretary of state for the Department of Trade and Industry (DTI) in February of 2003 and entitled, Our Future Energy – Create a Low Carbon Economy, is said to be a milestone in energy policy (Department of Trade and Industry [DTI], 2003) and the first official document to contain the phrase “low carbon economy” (Zeng & Zhang, 2011). The European Union, likewise, has taken a proactive stance on sustainability. The Commission of the European Communities (CEC) launched in June 2000 the European Climate Change Programme Occasional Paper No.12 5 (ECCP), an initiative meant to bring stakeholders of the community to cooperate in achieving the targets set forth in the Kyoto Protocol (Commission of the European Communities [CEC], 2000). The union went further in 2007 when they released their proposal for an ambitious global agreement in their communication, “Limiting Global Climate Change to 2 Degrees Celsius: The Way Ahead for 2020 and Beyond.” Key elements of the proposal called for a 20-percent reduction in energy consumption compared to projected trends, an increase to 20 percent in renewable energies’ share of total energy consumption and an increase to 10 percent in the share of petrol and diesel consumption from sustainably-produced bio-fuels (CEC, 2007). In December of 2009, more than 100 heads of states participated in the fifteenth session of the Conference of Parties of the UNFCCC at Copenhagen to address issues after 2012, the post-Kyoto Conference era. The document that came to be known as the Copenhagen Accord was entered into by countries accountable for 80 percent of global emissions, including the United States of America, and established the emission reduction targets of these countries (UNFCCC, 2009). However, many decry that the accord was more of a political document instead of a legal document, because it still has many details that remain to be filled in (Bodansky, 2010). Sustainability Debate States’ role in environmental sustainability is to provide environmental standards and regulatory frameworks that promote long-term sustainable economic growth (Wilkinson & Hill, 2001). This is a mandate that has elicited widespread but grudging acceptance (Porter & van der Linde, 1995).