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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 Businessheld on 4-5 December 2012 at the
Ateneo Professional Schools, Makati, Philippines.
Occasional Paper No.12
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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 BusinessAteneo Professional Schools BuildingRockwell Drive, Rockwell Center, Makati City, Philippines 1200Tel.: (632) 899-7691 to 96 or (632) 729-2001 to 2003Fax: (632) 899-5548Website: http://gsb.ateneo.edu/
Limited copies may be requested from the AGSB Research UnitTelefax: (632) 898-5007Email: [email protected]
1
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 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
Sustainable Tourism in a Low Carbon Economy:The Clark Freeport Zone CaseFrancisco L. Villanueva, Jr.Ateneo de Manila University Graduate School of Business
F
Occasional Paper No.12
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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 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
T
3
Introduction
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 2008-2012. In a principle of “common but differentiated responsibilities,” heavier burden was placed more on the reduction targets of the more developed countries, because of their greater contribution to the world’s current GHG emission level (UNFCCC, 1998).
Subsequent initiatives in support of sustainable development include the World Summit on Sustainable Development (WSSD)---also referred 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).
…heavier burden was placed more on
the reduction targets of the more developed
countries, because of their greater
contribution to the world’s current GHG
emission level
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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
5
Introduction
(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).
Porter and van der Linde (1995) proposed that it is outside forces like environmental regulations that motivate companies to innovate. Such innovations, as their study shows, can bring offsets: using inputs better,
Occasional Paper No.12
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creating better products, or improving product yields. Companies resisting such innovations, they expounded, will lose competitiveness in the global economy. A case in point would be how German and Japanese carmakers captured early-mover advantages in response to new fuel consumption standards while the US carmakers chose to fight regulations (Porter & van der Linde, 1995).
Sustainability programs---specifically, long-term energy management--- bring with it not only the obvious savings from reduced consumption and avoidance of levies associated with emission. It also comes with reputational benefits. Environmental credentials, it seems, have become attractive to customers, consumers and business-customers seeking suppliers and partners. “Customers, consumers and business-customers alike are becoming increasingly discerning in their selection of partners and suppliers, keen to align themselves with those who can demonstrate their environmental credentials. We have seen this most evidently…in the moves of the large retailers such as Marks and Spencer and Sainsbury’s, which have committed to carbon reduction, recognizing the commercial opportunities of being environmentally responsible. If influential and widely-respected companies like these are adopting a more robust environmental management policy, they will expect their suppliers and service providers to do the same” (Alcock, 2008).
A paper by Azorin, Cortes, Lopez, and Tari (2009) reviewed 32 quantitative studies that analyzed the influence of environmental management on financial performance. While results were mixed, 21 of the 32 studies indicated a significant positive relationship between environment management or environmental performance, and financial performance. Some cases displayed a lagged impact while others suggested the possibility of a two-way interaction between environmental variables and financial performance.
Cracolici, Cuffaro, and Nijkamp (2010) employed a structural simultaneous equation model to explore the causal relationship between the economic (GDP performance) and non-economic
7
Introduction
aspects (e.g., life expectancy, education level and pollution) using a sample of 64 countries. The study indicated a bi-directional causality relationship between economic performance and life expectancy; and a unidirectional relationship between economic performance and educational level with the former as the independent variable. Further, the study indicated that a marginal increase in GDP produces an almost proportional increase in CO2 while the increase in information diffusion with television set availability as proxy positively reduces pollution.
Oberheitmann (2011) discussed the fatal consequences from over-utilization of natural resources as in the case of the Easter Islands in the Pacific. He warned that global warming is a self-accelerating phenomenon that is reaching irreversible tipping points of climate change and that only a worldwide return to low carbon economy can stabilize global warming to bearable levels and avoid what he refers to as an “Easter Island Syndrome.”
Tourism’s Effect on Climate Change
Travel and tourism (T&T) in 2011, according to the estimates of the World Travel and Tourism Council (WTTC), contributed roughly 9 percent (or $6 trillion in absolute amount) of the world’s gross domestic product, supported 260 million jobs worldwide and generated about $650 billion in investments, making it one of the biggest economic sectors of the world. Its current growth trajectory, which is higher that those of other big-ticket sectors such as the banking and automotive industries, will make it increasingly important to the global economy over the next 10 years (World Travel and Tourism Council [WTCC], 2012).
Additional economic and social benefits derived from T&T include:
• Develops infrastructure in its area of operations;
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• Providespositive publicity for its areas of operations;
• Promotes global trade;
• Booststhe growth of other industries in its areas of operation;
• Transfers skills developed by T&T to other industries;
• Promotesinternational opportunities for work;
• Providesmoreflexible employment and working practices;
• Offers a lifeline for economies of remote rural areas;
• Hasbecome a vital source of income for developing countries; and,
• Promotesexchange of culture, global dialogue, national pride and cultural heritage (WTTC, 2012)
On the downside, T&T is a main contributor to climate change as it accounts for 5 percent of global carbon dioxide emission. Forty percent of this sector’s emission emanates from the air transport of tourists while another 35 percent comes from other modes of transport (United Nations World Tourism Organization [UNWTO], United Nations Environment Programme [UNEP], & World Meteorological Organization [WMO], 2008). It is projected that the emission from the tourism sector under a “business as usual” scenario could increase by 130 percent by 2035, with most increments coming from the air transport of tourists (UNWTO, UNEP, & WMO, 2008).Welford, Ytterhus, and Eligh (1999) proposed that tourism can be viewed as an industrial activity that consumes often scarce resources, produces waste by-products and requires certain infrastructure and superstructure to support it. The very act of tourism, they added, “often degrades what tourists came to experience and results in the common assertion that tourists destroy tourism.”
Cognizant of the role of tourism in climate change, the call for sustainable tourism has been embodied in initiatives of the United Nations for sustainability. A summary of the more significant events since the Rio de Janeiro summit are listed below (UNWTO, 2012) in Table 1.
9
Introduction
Table 1. Summary of significant events on sustainable tourism
1992 WTO participates in the United Nations Conference on Environment and Development held in Rio de Janeiro (Brazil), where “Agenda 21” is created.
1995 WTO, WTCC and the Earth Council produce Agenda 21 for the Travel and Tourism Industry, as a follow-up to the Rio Conference.
1999 The World Conference on the Measurement of the Economic Impact of Tourism, held in Nice (France), approves the Tourism Satellite Account
XIII WTO General Assembly in Santiago (Chile) adopts the Global Code of Ethics for Tourism.
2002 2002 is declared International Year of Ecotourism.
Quebec (Canada) holds the World Ecotourism Summit, which adopts the Quebec Declaration on Ecotourism.
WTO takes part in the World Summit on Sustainable Development (Johannesburg, South Africa), during which the program, “Sustainable Tourism – Eliminating Poverty” (ST-EP) is presented. The final declaration of the Summit includes a direct reference to sustainable development of tourism.
2003 First International Conference on Climate Change and Tourism, Djerba (Tunisia).
XV WTO General Assembly, Beijing (China), approves the composition of the World Committee on Tourism Ethics and unanimously supports the program, Sustainable Tourism – Eliminating Poverty (ST-EP).
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2004 First World Conference on Tourism Communications (TOURCOM), organized by WTO in Madrid, during FITUR.
The World Committee on Tourism Ethics, the implementation body for the Global Code of Ethics (adopted in 1999), holds its first meeting in Rome (Italy).
2005 Following the Asian tsunami catastrophe in December 2004, UNWTO Secretary-General summoned an emergency meeting of the UNWTO Executive Council, which adopts the Phuket Action Plan.
XVI UNWTO General Assembly held in Dakar (Senegal) confirms the leading role UNWTO can play in eliminating poverty through sustainable tourism development. Francesco Frangialli (France) is re-elected for a third mandate as Secretary-General.
2007 Second International Conference on Climate Change and Tourism, Davos (Switzerland), adopted the Davos Declaration, endorsed by the London Ministerial Summit on Tourism and Climate Change.
The XVII Session of the UNWTO General Assembly held in Cartagena de Indias, Colombia, adopts the Davos Declaration and encourages UNWTO to engage itself in the response to one of the greatest challenges of our times.
2008 UNWTO and other UN agencies present the Global Sustainable Tourism Criteria at the World Conservation Congress, Barcelona (Spain).
(...Table 1 continuation)
11
Introduction
(...Table 1 continuation)
2009 In response to the global economic crisis, the UNWTO Roadmap for Recovery is developed, demonstrating how tourism can contribute to economic recovery and to the long-term transformation toward a Green Economy.
XVIII Session of the UNWTO General Assembly, Astana (Kazakhstan), endorses the Roadmap for Recovery as a way to mainstream tourism into economic stimulus packages and appoints Taleb Rifai (Jordan) as UNWTO Secretary-General for the period 2010-2013.
UNWTO and the World Travel and Tourism Council host a side event at the COP-15 negotiations, demonstrating the commitment of the tourism industry to the climate imperative, Copenhagen (Denmark).
2010 First T.20 Ministers’ Meeting underscores tourism’s contribution to global economic recovery and the long-term ‘green’ transformation.
Source: United Nations World Tourism Organization (UNWTO), 2012. Retrieved from http://www2.unwto.org/en/content/history-o
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Climate Change’s Effect on Tourism
hile tourism is a contributor to climate change, it is also highly sensitive to the latter (Bigano, Hamilton, David, & Maddison, 2006). Rising sea levels and storm surges can have devastating effects on various tourist
destinations, especially small island states (Clayton, 2009; Maureen & Viner, 2001). A study employing a computable general equilibrium (CGE) model to relate sea level and tourism flows predicted that every 25 centimeters rise in sea level could translate to GDP loses ranging from 0.1 percent to 0.5 percent for small island states (Bigano, Boselle, Roson, & Richard, 2008).The length of the tourism season in climate-dependent destinations can be adversely affected by climate change (UNWTO, 2012) as in the case of the shorter winter for ski resorts at the Saxon mountain ranges (Hoy, Hänsel, & Matschullat, 2011) and Black Forest (Endler, Oehler, & Matzarakis, 2010), or the prolonged droughts and heavy flooding of Thailand (Marks, 2011).
A wide range of the environmental resources that are critical attractions for tourism in many destinations are sensitive to climate variability (UNWTO, 2012) such as decreasing snow reliability, seasonal weather variability in Davos, Scuol, and Braunwald. (Pütz et al., 2011), the increased summer temperatures in central Florida (Yu, Schwartz, & John, 2009), the grouse species disappearing from Scotland. (Yeoman & Una, 2006), and the decline in overall levels of vegetation and biodiversity on the coast of East Anglia, UK. (Emma, Andy, & William, 2008)
The climate change’s effect on various facets of tourism operations affects profitability (UNWTO, 2012), as in the need for snow for winter tourism at Davos, Scuol, and Braunwald. (Pütz et al., 2011) or the prolonged rainfall at the Colorado State Parks that led to significant revenue losses (Alvord, Long, Pulwarty, & Udall, B., 2008).Global warning has been known to cause environmental conditions
W
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Climate Change’s Effect on Tourism
that discourage tourist arrivals (UNWTO, 2012), such as the spread of disease and pests (Wilby, & Perry, 2006), rise in the population of jellyfish and ctenophore (Purcell, 2005), proliferation of harmful algal blooms (James, Carey, O’Halloran, van Pelt, & Skrabáková, 2010), or outbreak of infectious disease (Tol, Kristie, & Gary, 2007).
Philippine Policy Framework for Sustainable Tourism
Considering that the Philippines is ranked as one of the top countries worldwide that are at risk for both climate change and disaster (Esguerra, Custodio, Gaviola & Tiangco, 2010), the government passed into law the Republic Act 9729, known as the Climate Change Act of 2009, to “integrate the concept of climate change in various phases of policy formulation, development plans, poverty reduction strategies, and other development tools and techniques by all agencies and instrumentalities of the government” (Republic Act 9729, 2009).
The UN special envoy Margareta Wahlström lauded the legislation and said it was an excellent legal framework for disaster risk reduction and climate adaptation (Ubac, 2012). It was also the basis for establishing the Climate Change Commission under the Office of the President and formulating the National Framework Strategy for Climate Change 2010-2022 (Climate Change Commission, 2010).
Agence Francaise de Development, Global Footprint Network, and Climate Change Commission of the Philippines (AFP, GFN, & CCCP, 2012) recently concluded an evaluation of the ecological footprint of the Philippines. According to the report the country currently demands more than twice the bio-capacity available within its borders, a figure more alarming than the global demand that is about 52 percent more than its bio-capacity. If left unchecked, a collapse of the local ecosystem resulting from over-harvesting and climate changes may further reduce bio-capacity (therefore severely exceeding what had been projected), and/or fail to support this level of demand.
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With this as a backdrop, the Philippine government---through the Department of Trade and Industry (DTI)---requested Deutsche Gesellschaft für Technische Zusammenarbeit (GTZ) to integrate measures for climate change mitigation into the Micro, Small and Medium Enterprises (MSME) Development Strategy for the period 2010 to 2016 as well as align such with the policy goals of the Climate Change Act and the National Framework Strategy on Climate Change (Finkel, Duhaylungsod, & Bauer, 2010).
The prescription of the paper for green growth called for the pursuit of five objectives, namely:
• Mitigation – reduce gas emissions, thereby mitigating the impacts of disasters;
• Adaptation – assist individuals and businesses to adapt to changes attributed to climate variations and severe weather conditions;
• Competitiveness – develop and implement sustainable green business strategies that reduce their ecological footprint;
• Greenjobs–make use of growth opportunities and market potentials that arise from investments in mitigation and adaptation as well as from products and services needed by a green economy; and
• Nature’scapital–conservation of nature’s capital through the recognition of its economic value at company- and government-level cost-benefit analyses.
These objectives are expected to be implemented through interventions at the supra-national, meta, macro, meso and micro levels (Finkel, Duhaylungsod, & Bauer, 2010). This paper will employ this framework in evaluating the case of the Clark Freeport Zone.
The Clark Freeport Zone
Clark Freeport Zone (CFZ), as its name imply, is a free port zone with an area of 4,400 hectares, about 80 kilometers northwest of Metro
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Climate Change’s Effect on Tourism
Manila. The CFZ and the 27,600-hectare Clark Special Economic Zone (CSEZ) are a redevelopment of the Clark Air Base, which used to be a United States Air Force Base, with the former occupying the Clark Air Base Proper and the latter occupying the subzone.
The Clark Air Base ceased being an American base in 1991 after the eruption of Mount Pinatubo and the non-renewal of the base agreement between the Philippines and the United States. A year later, Republic Act 7227, also known as the “Bases Conversion and Development Act of 1972,” was passed to enable the conversion and development of former American military bases for alternative productive uses (Republic Act 7227, 1992).
Pursuant to this act, Executive Order 80 by President Ramos authorized the establishment of the Clark Development Corporation as the government’s implementing arm in converting the former base, main zone and subzone, into the Clark Special Economic Zone, “an international civil aviation complex, a modern industrial estate, and tourism, trade and business center for Luzon and Asia” (Executive Order 80, 1993)
Fourteen years later, Republic Act 9400 converted the 4,400-hectare main zone of the former base (save for a 22-hectare portion located at the Bayanihan Park) into the Clark Freeport Zone with full free-port status and tax incentives for qualified locators. The subzone, on the other hand, shall continue to be referred to as the Clark Special Economic Zone, an economic zone with incentives to be administered by the Philippine Economic Zone Authority (Republic Act 9400, 2007).
Today, the CFZ is home to about 595 locators supporting about 70,000 employees. Major employers in the area include electronic/semiconductor manufacturers, garments manufacturers, Information Technology/Business Process Outsourcing (IT/BPO) companies, tourism-related companies, other service-oriented firms, aviation-related companies, commercial locators, and other light manufacturers (CDC
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Industrial Relations Unit, personal communication, November 19, 2012). Export for 2011 is about $3.9 billion while total investments generated so far is estimated at about P106 billion.
Clark’s Tourism Sector
The CFZ, owing to its world-class airport, vast verdant open spaces, strategic location in Central Luzon, amenities for tourism, multicultural population and connectivity to other key cities in the country and in the ASEAN region, cannot help but be the tourism center for Central Luzon (C. T. Mc Tavish, personal communication, October 23, 2012).
As stated in the official mandate of the CDC (Executive Order 80, 1993), tourism is one of the major sectors targeted for the CFZ. As of the end of October of 2012, the tourism sector accounts for 186 of the CFZ’s 595 locators (or 31%) and about 15,495 of the 70,452 (about 22%) of the zone’s workforce (E. J. Rivera, personal communication, November 6, 2012). Breakdown of these figures is listed in Table 2.
Table 2. CFZ Tourism-related Sectors
Classification No. Employment
Tourism Estates 27 6,558
Commercial Operations 21 5,380
Warehousing/trading 16 328
Aviation 39 2,080
Tourism-related services 83 1,149
TOTAL 186 15,495
Source: CDC Industrial Relations Unit
The CFZ enjoys easy access to Manila. Motorists can take the North Luzon Expressway (NLEX) easily via the Subic-Clark-Tarlac Expressway (SCTEX). The SCTEX also links the CFZ seamlessly to the Subic Bay Freeport Zone at the south and to the Hacienda Luisita Commercial
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Climate Change’s Effect on Tourism
Complex at the north. Alternately, motorists may take the Manila North Road or MacArthur Highway to get to and from Clark.
On the supply side of tourism, the zone currently has 14 hotels with 1,934 rooms and villas presented in Table 3. Aside from the accommodations available inside the zone, the areas just outside the Main Gate and Friendship Gate of the CFZ are peppered with close to a hundred hotels with sizes ranging from 6 to 124 rooms with total a capacity about 3,000 rooms.
Table 3. Hotel Rooms Inventory for CFZ
Name of Hotel Rooms Villas Total
1. Asiana Greenville 45 45
2. Clark Hostel 36 36
3. Clearwater Country Club 24 24
4. Eagle’s Inn 32 32
5. Fontana Leisure Parks 66 492 558
6. Holiday Inn Resort Clark 300 62 362
7. Hotel Stotsenberg 239 239
8. Hotel Vida 125 125
9. Montevista (Spro) 213 213
10. Nayong Pilipino 8 8
11. Lohas Hotel 40 40
12. Oxford Hotel 224 224
13. Paradise Ranch 6 6
14. Residence Inn 22 22
TOTAL 1,116 818 1,934
Source: CDC Tourism and Promotions Office
Facilities inside the zone include convention halls with a total capacity for about 16,000 persons (Table 4), five casinos (Table 5), golf courses with a total of 108 holes, and a firing range (Table 6), shopping outlets (Table 7), and a wide list of dining spots (Table 8). In addition, visitors of the CFZ may explore its surrounding area, where they can choose
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from a wide array of tourist attractions that include restaurants, bars, wellness centers, adventure tours, paradise ranch, heritage tours, and eco tours at Mt. Pinatubo (Garcia, 2012).
Table 4. Convention Facilities inside the CFZ
Venue Description Capacity
Oxford Convention Closed 1,800
Fontana Convention Closed 900
Stotsenberg Convention Closed 1,200
Mimosa Convention Closed 700
Mimosa Hilltop Closed 300
Widus Convention Center Closed 700
Clark Education City Amphitheater Partially Open/Closed 11,000
Holiday Inn Ballroom Closed 900
Clark Museum (2nd Floor) Closed 250
TOTAL 16,150
Source: CDC Tourism and Promotions Office
Table 5. Casinos Inside the CFZ
Casino Name Location
1. Mimosa Regency Casino Mimosa Leisure Estates
2. Casablanca Casino Hotel Stotsenberg
3. Fontana Casino Fontana Leisure Parks
4. Oxford Princess Casino Oxford Hotel
5. Casino Widus Hotel Widus
Source: CDC Tourism and Promotions Office
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Climate Change’s Effect on Tourism
Table 6. Selected Sports Facilities inside the CFZ
Sports Activities
1. Mimosa 36 Hole Course
2. Fontana 18 Hole Course
3. Mequeni 18 Hole Course
4. Korean CC 36 Hole Course
5. Clark Eagles Firing Range and Gun Club
Source: CDC Tourism and Promotions Office
Table 7. Shopping Facilities in the CFZ
Name of Institution Specialty
1. Arjan Duty Free Various
2. Liberty Duty Free Home Furniture
3. Parkson Duty Free Various
4. Clark Interiors Household lighting equipment
5. Puregold Duty Free Various
6. SM City Clark Various Mall outlets
Source: CDC Tourism and Promotions Office
Table 8. Dining Spots Inside the CFZ
Name of Establishment Specialty
1. Café Mesa Coffee Shop/ UCC Coffee
2. Red Crab Seafood
3. Mequeni Café (Holiday Inn) International Buffet
4. Rodizio (Holiday Inn) Brazilian
5. Copas (Holiday Inn) Night Bar
6. Salt (Hotel Vida) Fine Dining/ International Buffet
7. Yats International Wine Club
8. London Pub Bar with game room
9. Zen Japanese Food
10. The Korean Restaurant Korean Food
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11. S Bar (Hotel Stotsenberg) Night Bar
12. Bleu (Hotel Stotsenberg) International Buffet
14. Verandah Casual Dining
15. Royal Dining Seafood (Oxford Hotel) Chinese Cuisine
16. Mimosa Café Coffee Shop
17. Golden Pavillion (Fontana) Chinese Restaurant
18. Red 8 (Fontana) Noodle and Dimsun House
19. Mc Donald’s Fast Food
20. Chowking Fast Food
21. Lomi House (Air Force City) Filipino Food
22. Hacienda (Hotel Stotsenberg) Cakes and Pastries
23. Twist (Hotel Stotsenberg) Fine Dining
24. Jollibee Food Corp Fastfood
25. Razon’s Halo Halo Native Dessert
26. Koko Buri Casual Dining
27. White House Fine Dining
28. Mang Inasal Fast Food
29. Binulo Restaurant Fine Dining
30. Café Tre Coffee Shop
31. C Italian Café Pizza House
Source: CDC Tourism and Promotions Office
As developing sustainable tourism requires the collaboration of the community (Billington, Carter, & Kayamba, 2008), it is necessary to cite some of the more important stakeholders of the CFZ tourism sector (Table 9).
(...Table 8 continuation)
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Climate Change’s Effect on Tourism
Table 9. Partial List of Stakeholders for CFZ’s Tourism Sector
Group Represented by Classification
CFZ Administration Clark Development Corp GOCC
Clark Airport Administration Clark International Airport, Inc. GOCC
Clark Locators Clark Investors and Locators Association Business Group/NGO
Metro Angeles Businessmen
Metro Angeles Chamber of Comm. and Ind., Inc
Business Group/NGO
Hoteliers and Restaurant owners
Hotel and Restaurant Assoc. of Pampanga Business Group/NGO
Travel Agencies/Tour Oper. Assoc. of Travel Agents of Pampanga Business Group/NGO
Travel Agencies/Tour Oper. Pampanga Agents Travel Society Business Group/NGO
SCAD Corridor Dev. Champion
Subic Clark Alliance for Development Council
GOCC
LGU Units LGU Heads, Legislators and Tourism Officers
LGU
Indigenous People Mabalacat Tribal Asso./Bamban Tribal Assoc.
People’s Org.
Public Transport Operators PASADA PO
Tourism Administrators Dept. of Tourism, Region 3 GA
Infrastructure Builder
Dept. of Public Works and Highway, Region 3
GA
Peacekeepers
PNP and CDC Public Safety Department
AFP and GOCC
Academe Top Five Universities and Voc Tech Schools HEIs and TVETs
Private Transport Providers Company Owners/reps
Utilities Providers Clark Electic Dist. Co./Clark Water Inc. Private Companies
Gov’t. Environment Expert DENR GAs
Private Environment Group
Environmental Practitioners Assoc. NGO
Women’s Rights Advocates LACEM, ACWCC, IMA NGO
Funding Agencies The Asia Foundation, USAID, AUSAID, GIZ
Funders
Foreign Residents Reps VFW, RUMPA, KC, KBA, Nihon Kaisha, Associations
Church Groups Curia Sancti Rosaii, Inc., PPCRP NGO
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Technology Experts DOST GA
Public Info Partners Pampanga Press Club, Media Friends
Media
Tourism Advocate Metro Clark Visitor’s Bureau NGO
Heritage Advocates Kuliat Foundation, Kapampangan Center NGO
Source: Various
With the advent of pocket open skies in early 2006 and the entry of low-cost carrier, passenger arrival at the Clark International Airport (CIA) rose from about 49,500 in 2004 to about 225,000 in 2005, and about 471,000 in 2006 (Rodolfo, 2007). This year, the airport is serving at least 297 flights/week and is projected to hit 1.4 million passengers by the end of the year (N. B. Garcia, personal communication, November 5, 2012). Table 10 shows the CFZ’s historic and projected tourist arrivals for 2012.
Table 10. CFZ Historic and Projected Tourist Arrivals for 2012
Type of Tourist Jan Feb Mar Apr May June July Aug Sep Oct* Nov* Dec* Total
Educational Tours 27,090 21,320 7,814 5,899 2,512 2,259 3,589 10,896 10,172 20,345 20,345 3,052 135,293
Events/Open Spaces 200 124,600 4,119 5,750 5,284 250 180 21,500 20,235 20,235 20,235 20,235 242,825
Clark Airport Arrivals
Domestic 1,943 1,967 2,935 19,065 22,056 14,481 12,971 16,230 13,546 11,688 14,026 17,532 148,440
International 40,595 35,725 38,940 38,457 39,115 35,557 36,324 40,226 38,437 38,153 45,783 57,229 484,542
Total Airport Arrival 42,538 37,692 41,875 57,522 61,171 50,038 49,295 56,456 51,983 49,841 59,809 74,762 632,982
GRAND TOTAL 104,577 226,824 86,987 113,266 114,407 90,008 93,339 126,126 126,320 136,372 146,340 143,999 1,508,565
Based on both their reported occupancy to CDC until September 2012 and on the projections of CDC, hotels inside the zone are expected to register about 497,466 room nights for 2012 (Table 11) — or an average of 1,363 rooms occupied per day. Considering that there are
(...Table 9 continuation)
Source: CDC Tourism and Promotions Office * Projected values for Oct-Dec
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Climate Change’s Effect on Tourism
Table 11. CFZ Historic and Projected Hotel Occupancy Levels for 2012
Hotel Jan Feb Mar Apr May June July Aug Sep Oct* Nov* Dec* Total
Asian Greenville 1,526 1,668 1,223 1,156 995 1,026 1,596 1,526 1,026 1,500 1,500 1,500 16,243
Clark Hostel 350 382 305 445 305 216 355 389 448 408 408 408 4,420
Clear Water Country 744 1,526 562 1,296 663 987 1,026 1,585 996 1,199 1,199 1,199 12,983
Eagle’s Inn 135 301 166 336 125 203 151 112 95 208 208 208 2,247
Fontana Leisure Park 7,889 11,599 9,556 10,689 18,559 12,456 13,577 11,562 15,627 14,249 14,249 14,249 154,261
Holiday Inn Resort 10,787 10,833 10,265 13,690 12,876 10,030 10,327 8,398 10,702 12,510 12,510 12,510 135,439
Hotel Stotsenberg 2,566 4,596 2,006 3,324 3,459 5,012 3,315 3,658 3,681 4,040 4,040 4,040 43,737
Hotel Vida 3,139 3,152 3,145 3,988 2,573 2,352 2,555 2,459 3,012 3,370 3,370 3,370 36,485
Montevista Villas 2,962 2,240 2,001 1,950 1,935 1,432 1,455 1,245 1,665 2,158 2,158 2,158 23,358
Lohas Hotel 3,125 4,226 2,596 3,325 3,024 2,215 3,359 3,451 3,352 3,664 3,664 3,664 39,664
Oxford Hotel 1,526 2,689 1,354 3,896 926 1,532 2,559 2,889 3,325 2,644 2,644 2,644 28,629
Total Occupancy 34,749 43,212 33,179 44,095 45,440 37,461 40,275 37,274 43,929 45,951 45,951 45,951 497,466
Source: CDC Tourism and Promotions Office * Projected values for Oct-Dec
currently 1,934 rooms and villas inside the zone, average occupancy rate is about 70.5 percent of the theoretical capacity.
Judging from the reported occupancy rates of hotels inside the CFZ and the expected increase in arrivals at the Clark International Airport, the zone’s tourism sector, from the short-term economic point of view, appears to be bullish.
Estimation of CFZ’s Carbon Footprint
Since it may be difficult to employ the more sophisticated ecological footprint developed by Wackernagel and Rees (1996), this study could adopt a simple estimation of the carbon footprint based on statistics on flights, land transport, and power consumption.
Based on estimates prepared by DEFRA, a short-haul international air passenger is typically responsible for the emission of about 130 grams of carbon dioxide per kilometer traveled, assuming an average load factor of 0.65 (Department for Environment, Food and Rural Affairs
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[DEFRA], 2007). By multiplying said factor by the established air distances between origin cities of arriving passengers, an estimate of the carbon footprint per arriving passenger is derived. Using the projected total arrival of international passengers that was presented earlier and distributing them among the routes based on the frequency of flight (Table 12).
Table 12. Estimate of Carbon Footprint of International Arrivals at CFZ
Origin DistanceCO2/pax
(kilos) Frequency PassengersCO2/route
(tons)
Hong Kong 1,069 138.97 7 82,727 11,496.57
Macau 1,079 140.27 7 82,727 11,604.12
Singapore 2,399 311.87 5 59,090 18,428.40
Kuala Lumpur 2,462 320.06 5 59,090 18,912.35
Inchon 2,571 334.23 7 82,727 27,649.85
Kota Kinabalu 1,133 147.29 5 59,090 8,703.37
Bangkok 2,167 281.71 5 59,090 16,646.24
TOTAL 484,542 113,440.89
Sources: CDC Tourism and Promotions Office; DEFRA, 2007; Author’s computations
Applying the same method for domestic arrivals, an estimate of the carbon footprint is likewise arrived at (Table 13).
Table 13. Estimate of Carbon Footprint of Domestic Arrivals at CFZ
Origin DistanceCO2/pax
(kilos) Frequency PassengersCO2/route
(tons)
Cebu 648 84.24 7 51,954 4,376.60
Davao 1053 136.89 5 37,110 5,079.99
Kalibo 430 55.90 3 22,266 1,244.67
Puerto Princesa 635 82.55 5 37,110 3,063.43
TOTAL 20 148,440 13,764.69
Sources: CDC Tourism and Promotions Office; DEFRA, 2007; Author’s computations
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Climate Change’s Effect on Tourism
For land transport, an estimate is made on how much fuel a vehicle consumes coming to and leaving the CFZ. Such estimate is then divided by the expected number of passengers per trip. A bus, for example, with a capacity of 50 and an average load factor of 80 percent would have, on average, about 40 passengers. As most field trips to Clark come from Metro Manila, a trip would typically consume 40 liters of fuel. Then, each passenger is estimated to account for 1 liter of fuel. By multiplying that number by the conversion factor from fuel to CO2 of 0.002734, as given by the Philippine Greenhouse Gas Accounting and Reporting Program---or PhilGARP (J. M. B. Fuentes, personal communication, November 26, 2012), one can arrive at a rough estimate of the carbon footprint of each participant of an educational tour. The same procedure can be used to get rough approximations for participants of events or open space activities who normally arrive by cars (Table 14).
Table 14. Estimated Carbon Footprints of Events and Tours Participants
CO2 Source Total CO2/pax CO2 Footprint
Educational Tours 135,293 0.002734037 370
Events/Open Spaces 242,825 0.005468073 1,328
Sources: CDC Tourism and Promotions Office; PhilGARP estimates; J. M. B. Fuentes, personal communication, 2012; Author’s computation
All told, tourists visiting the CFZ produce carbon footprints weighting 128,903 (Table 15) tons just from travel alone. Other consumptions such as accommodations and food have not yet been included.
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Table 15. Summary of Carbon Footprints of Tourists Based on Transport Cost
Source of CO2 CO2 Footprint (tons) % to Total
International Arrivals 113,440.89 88%
Domestic Arrivals 13,764.69 11%
Educational Tours 369.89 0%
Events/Open Spaces 1,327.78 1%
TOTAL 128,903.26 100%
Source: CO2 footprint values were adopted from Tables 12, 13, and 14
As energy accounts for 80 percent of the anthropogenic greenhouse gases of Annex 1 countries (International Energy Agency, 2011), a reasonable estimate of the footprint of the entire CFZ can be derived from its energy consumption. In this case, this includes electricity for the offices, plants and homes, and fuel for transport vehicles. While it is not possible to segregate the carbon footprint of tourism from the rest, estimates on such will at least provide a picture of the entire CFZ community’s carbon footprint.
Electricity, as it is monitored closely at all points for billing purposes, lends itself well to this type of calculation. Using another conversion factor also prescribed by PhilGARPS to the Environmental Management Office of CDC (i.e., 1 MW of power translates to 0.548 tons of CO2 emission), the carbon footprint due to energy used by establishments inside CFZ are readily estimated (Table 16).
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Climate Change’s Effect on Tourism
Table 16. Estimated Carbon Footprint from Consumption of Electricity
Year MegaWatts Consumed
CO2 Footprint(tons)
2005 153,325 84,022
2010 266,151 145,851
2011 276,145 151,328
2012 292,051 160,044
2013 309,575 169,647
2014 330,507 181,118
2015 353,643 193,796
Sources: Energy Regulatory Commission, 2011; PhilGARP estimates; J. M. B. Fuentes, personal communication, 2012
The CDC recently commissioned a Transport and Traffic Management Study for the Clark Freeport. Based on traffic counts and interviews conducted by the study team, they were able to ascertain then that about 205,000 people travel to and from the zone daily: about 66,000 by car; 97,000 by public utility jeepneys (PUJs); and another 41,000 by shuttle services (Clark Development Corporation [CDC], 2009). While these figures are about three years old and vehicular traffic at the zone increases by about 5 percent per annum, the figures will not be inflated to keep the estimate conservative. Applying the same process that was used earlier, there is an estimated 46,000 tons of carbon footprint for 2012 just from transport to and from the zone. Table 17 summarizes the carbon footprint from fuel consumption inside the CFZ.
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Table 17. Estimated Carbon Footprint from Fuel Consumption Inside the CFZ
Vehicle CapacityLoad Fac. Passengers Trips Ltr/trip liters C.F.
Cars 5 40% 66,446 33,223 1 33,223 91
PUJs 20 70% 96,992 6,928 2 10,392 28
Shuttles 20 80% 41,267 2,579 1 2,579 7
TOTAL DAILY 204,705 46,194 126
liter – C.F. Ratio 0.002734 Annual CO2Footprint 46,098
Sources: Based on traffic counts and interviews conducted by the study team commissioned by CDC Tourism and Promotions Office; Author’s computation
Putting together all the estimations made so far, it is clear that the estimated carbon footprint for the CFZ, even with very conservative assumptions, is about 335,000 tons for 2012, with electricity accounting for about 48 percent of the total; and air travel, 38 percent (Table 18). While an economic zone with an international airport is expected to have a high carbon footprint, a per-capita footprint of about 4.8 tons still looks forbidding considering that the per-capita footprint for this country is about 0.9 tons (World Bank, 2012) and said national consumption level is already twice the bio-capacity within its boundary. (Agence fracaise de Development [AFD], Global Footprint Network [GFN], & CLimate Change Commission of the Philippines [CCCP], 2012).
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Climate Change’s Effect on Tourism
Table 18. Summary of CFZ’s Estimated Carbon Footprint for 2012
Source of CO2 CO2 Footprint (tons) % to Total
International Arrivals 113,440.89 33.86%
Domestic Arrivals 13,764.69 4.11%
Educational Tours 369.89 0.11%
Events/Open Spaces 1,327.78 0.40%
SUB TOTAL 128,903.26 38.47%
CFZ Fuel Consumption 46,098.26 13.76%
CFZ Power Consumption 160,044.00 47.77%
SUB TOTAL 206,142.26 61.53%
GRAND TOTAL 335,045.51 100.00%
Sources: Values adopted from Tables 12, 13, and 14; Author’s computation
CFZ Initiatives on Climate Change
During the ECOP Roundtable Discussion held at the Oasis Hotel, Angeles City on October 27, 2012 entitled, “Strengthening the Philippine Institution Capacity to Adapt to Climate Change,” Mr. Juan Miguel B. Fuentes, manager of the CDC Environmental Management Department, outlined the two-pronged approach to address climate change: namely, mitigation and adaptation. The summary on these are shown in Tables 19 and 20.
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Table 19. Summary of Mitigation Measures Taken
Initiative Initiator(s) Performance Indicator(s)
Trees for CO2 sequestration
•Planting EPA and CDC 12,000 – 15,000 planted annually
•Maintenance/Surgery of trees EPA and CDC – 12 operations per annum
•Protecting(priorityin land use) CDC and DENR Strict enforcement on land use reg.
Proper Waste Management
•Disposalatsanitarylandfill MCWMC, CDC 600 MT/day
•Methanegascapture MCWMC 275 cu.m/hr. harvested. Carbon credits
•Reduceandrecyclecampaigns CDC, EPA Quantity of
•Noburningofgarbage CDC Strict compliance
•Bustedfluorescentlamps disposal
CDC, EPA, DoloMatrix 6,000 BFL disposed properly yearly
Inventory of CO2
•Carbonfootprintmonitoring
CDC, PhilGARP Baseline data, prescriptive measures
•GreenPhilippines(GPIOS)
EPA, MACCII and EU Partners
20 enrolled companies, actual savings from interventions. Replication of program for 500 firms in the country.
•Powerconservationprograms
EPA and CDC Use of LEDs and other alt. Technologies
Source: Fuentes, 2012
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Climate Change’s Effect on Tourism
Table 20. Summary of Adaptation Measures Taken
Initiative Initiator(s) Performance Indicator(s)
Occurrence of flooding
•Comprehensivedrainage study CDC Completed and update study
•Rehabilitationofstormdrains, canals and waterways
CDC Percent of water channels fully functional
•Slopeprotectionofriverbanks CDC Percent of slope vulnerable to erosion
•Proposed“catchbasin” CDC FS, then funding and completion
Water Resource Management
•Comp.hydro-geological study CDC, DENR Completed and updated study
•Waterresourcespolicies
o Golf courseso Industrial use
CDC, Clark Water
Actual water consumption of parties concerned
•Waterconservationprograms
CDC, Clark Water Per capita water usage
•Rainwaterharvesting CDC Absorptive capacity of tanks Companies in the program
Source: Fuentes, 2012
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Figure 1. Determinants of Systemic CompetitivenessSource: Allenburg et al., 1998
Discussion
Being the head of the CDC Environmental Management Department, a perennial officer of the Environmental Practitioners Association (EPA), and a noted figure in the industry, Mr. Fuentes was in a unique position to leverage his network to initiate and deliver sustainability projects with minimal resources. In addition to the measures he described above, he, together with his core group in the EPA, were able to launch a number of capacity building programs catering to his peers in the profession, to local government unit heads, and even to students.
Considering, however, the humungous per-capita carbon footprint of the CFZ and the country’s alarming ecological footprint; and the complexity of tourism systems (Baggio & Sainaghi, 2011), what is suggested foremost is to establish a multi-sector super body that will be able to develop systemic competitiveness by capturing both political and economic determinants of a successful industrial development
© GDI
Determinants of Systemic Competitiveness
Meso level
Macro level
Meta level
Micro level
Efficient firms Collective efficiency andinnovation networks
Technological
Organizational
Social
Simultaneous engineering
import / export
regional
environmentalindustrial structure
technology
education
infrastructure
trade policy
fiscal policy
budgetary policy
curre
ncy p
olicy
moneta
ry po
licy
compe
tition
polic
y
Stable macroeconomic, politicaland juridical framework
Inno-vations
Targeted policies to strengthenthe competitiveness of certain
sectors
labor
learni
ng- a
nd
chan
ge-fri
endly
value
attitud
es
competitive pattern of
economic organization ability to formulate
strategies and policies
socialcohesion
Developmentorientation of society
33
Climate Change’s Effect on Tourism
(Allenburg, Hillebrand, & Meyer-Stamer, 1998). Figure 1 shows the determinants of systemic competitiveness.
The model calls for the fulfillment of the success factors at various levels ranging from the micro, to the meso, to the macro, and finally to the meta level as presented in the figure below. The same model has been recently employed successfully in a project of GIZ, BMZ, and DTI for the greening of the tourism value chain of Bohol (Finkel, 2012) and supports the axiom for strong linkages between all sectors of tourism (Welford, Ytterhus, & Eligh, 1999). Such coalition, furthermore, could harness the collective knowledge of its members and allow them to develop sustainable, resilient destinations and breakthrough ideas (Robert, Carter, & Kayamba,2008; Farley, Batker, & Hudspeth, 2010).In defining the overall sustainability strategy of CFZ’s tourism sector, it should consider certain issues:
1) Promotion of eco-accreditation and eco-labeling for tourism-related products, services, and establishments so as to instill a culture of and awareness for sustainability (Burgin & Hardiman, 2010)
2) Development of more detailed baseline data through the cooperation between government, industry, and the academe;
3) Continued push for the development of more tourism-related infrastructure as they do have strong causality to tourism receipts (Assaker, Vincenzo, & O’Connor, 2011) and are more sustainable than air travel;
4) Employment of social marketing for sustainability. This will help modify customer behavior and attitude toward sustainability and promote transfer of knowledge (Peattie, Peattie, & Ponint, C., 2009);
5) Search for opportunities to bring “consumption into the population” (Curan & Sherbinin, 2004) or promote urban-agriculture (Mason & Knowd, 2010) to help minimize logistics costs;
6) Need to work with CDC to explore the rationalization of the public transport system and to lessen carbon footprint while improving service levels;
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7) Need to work with planners to study how the ecological footprint for CFZ and CSEZ may be improved by amending the land-use plan (Zhou & Liu, 2009);
8) Application of life cycle analysis to assess environmental impacts of tourist services and products and (De Camillis, Raggi, & Petti, 2010);
9) Continued advocacy for the development of the railway system to connect CFZ with Metro Manila.
As a closing note, it is hoped that the gathering of more precise data will be undertaken soon. Such will help develop a more precise model for estimating the carbon as well as the ecological footprint of the Clark Free Port Zone.
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