Hawaii’s Governor Josh Green has signed into law a climate impact fee, or “Green Fee,” to address the critical need to build resiliency against the impacts of climate change by providing a stable source of funding for environmental stewardship, hazard mitigation and sustainable tourism.
The new initiative will add .75% to the transient accommodations tax (TAT) beginning in 2026 and levies, for the first time, the TAT on cruise ships that port in the state. It is projected to add $100 million annually to the economy.
Coastal and island tourism accounts for roughly 50% of all tourism which accounts for more than 8% of global greenhouse emissions. Tourism is can also be a major source of pollution and can tax island water systems.
“Today Hawaiʻi ushers in the first Green Fee in the nation,” the governor said. “Once again, Hawaiʻi is at the forefront of protecting our natural resources, recognizing their fundamental role in sustaining the ecological, cultural and economic health of Hawaiʻi. As an island chain, Hawaiʻi 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.”
Following the devastating Maui wildfires and in response to the growing frequency and intensity of natural disasters across Hawaii and the nation, Governor Green established the Climate Advisory Team (CAT) in 2024, led by Chris Benjamin and comprised of a team of leaders, to develop community-informed policy recommendations. A key recommendation of the CAT was to establish a dedicated source of funding for climate change mitigation and disaster resilience.
“The Green Fee bill marks a historic investment in climate disaster resilience and environmental protection,” said Chris Benjamin. “Using the TAT to fund resiliency projects ensures that the financial burden of safeguarding our ʻāina and people doesn’t fall upon residents alone.”
Assessing the TAT on cruise ships — a sector of transient accommodations that has long gone untaxed under the TAT — promotes equity across the tourism industry, ensuring that all visitors to Hawaii contribute to the islands’ long-term resilience and well-being.
“I think it’s really about our kuleana, to the state, to the people of Hawaiʻi,” said Senator Lynn DeCoite. “Climate change is here and has been a super-huge challenge for all of us. As the chair of the Economic Development and Tourism (EDT) Committee, the impacts are real. The bill shares the responsibility of caring for our home with those who come to visit, to ensure that our natural resources are cared for, for future generations.”
