Maldives Shuns CO2 Tax Seeking Tourist Cash to Make Cuts

(businessweek.com)The Maldives will seek to fund its plan to become carbon-neutral with voluntary donations from visitors, shunning a proposal for an emissions tax on tourists, President Mohamed Waheed said.

The low-lying Maldives, a chain of islands in the Indian Ocean, is one of the nations most threatened by the rising sea levels predicted from global warming. The previous president, Mohamed Nasheed, pledged to make his country carbon-neutral by 2020, and a report in 2010 that he commissioned suggested a carbon tax on tourism.

“We are careful not to put too many taxes on our tourists,” Waheed said in an interview in Rio de Janeiro, where he’s attending the United Nations Rio+20 summit on sustainability. “What we are now planning to do is set up an environment fund where tourists can commit funds. It will be voluntary contributions to begin with.”

The president said he’ll continue to pursue Nasheed’s policy of carbon neutrality. He’s seeking to derive 60 percent of the country’s electricity from solar power by 2020, with the remainder from other renewable sources such as wind and biomass.

Waheed, who served as Nasheed’s deputy, took power in February after Nasheed resigned. Nasheed later said he was forced to do so at gunpoint by the military. Waheed said he’ll hold elections in “about a year.”

“The constitution allows for an election in July next year, and I have declared I’m fully supportive of it,” Waheed said.

The renewables push would reduce the nation’s dependence on imported fossil fuels, which currently costs the country $200 million a year, or about 15 percent of its economic output.

To that end, Waheed’s government has been in discussion with Indian and U.S. renewable-energy equipment makers, including Suzlon Energy Ltd. (SUEL), Waheed said. With the country needing investment and technical assistance, he said he hasn’t ruled out a carbon tax on tourists.

“We will discuss with our tourism sector, with tour operators and resort owners to see how much of a burden it would be if we make it mandatory,” Waheed said.

UN World Tourism Organization Secretary-General Taleb Rifai said the Maldivian plan “sounds like a good model,” and that tourists are becoming more aware of environmental issues.

“We are seeing a changing profile of tourists and travelers all over the world,” Rifai said in an interview today in Rio. “If structured the right way, travelers will be more than happy to contribute to a fund like this.”