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In a landmark move, Hawaii has become the first U.S. state to implement a climate impact fee, introducing a new tax on tourists to support environmental initiatives. Announced on Tuesday, the fee is designed to fund climate change resiliency efforts and preserve the islands’ natural resources.
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What is the Green Fee?
According to a press release by Governor Josh Green’s office, the nation’s first “Green Fee,” Hawaii’s Act 96, will increase the state’s transient accommodations tax (TAT) by 0.75%, bringing the total to 11% on nightly lodging rates. Set to take effect on January 1, 2026, the added revenue will directly support climate resiliency and environmental protection efforts across the islands.
The fee will apply to the travellers who will stay in hotels, short-term accommodations, and, for the first time, cruise ships. Previously exempt from the TAT, cruise ship passengers will now be included under the new law, which aims to promote “equity across the tourism industry.” For travelers, the added cost on a $300 nightly hotel stay, the new 0.75% Green Fee amounts to just $2.25 per night, as reported by USA Today.
The new Green Fee is designed to generate funding for climate change mitigation, environmental stewardship, hazard mitigation, sustainable tourism, invasive species control, wildlife conservation, beach management and restoration, and a green jobs youth corps.
In a statement, Green said, “As an island chain, Hawaii cannot wait for the next disaster to hit before taking action. We must build resiliency now, and the Green Fee will provide the necessary financing to ensure resources are available for our future.”
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How will the Green Fee benefit?
The new Green Fee tax is projected to generate around $100 million each year. While specific projects will be finalized in the next legislative session, the funds are slated to support a wide range of initiatives, including environmental stewardship, climate and hazard resiliency, and sustainable tourism across the Hawaiian Islands.
