New law aims to protect the environment and build climate resilience using revenue from tourism
In a historic step toward climate action, Hawaii has become the first U.S. state to introduce a dedicated climate impact fee for tourists. Signed into law on Tuesday, May 27, 2025, by Governor Josh Green, the new “Green Fee” raises taxes on hotel stays and short-term accommodations to fund environmental protection and climate resilience initiatives.
During the signing ceremony in Honolulu, Governor Green was joined by lawmakers and supporters to unveil the measure, which adds 0.75% to the state’s transient accommodations tax (TAT). The total tax on nightly lodging will now stand at 11%, and the law is set to take effect on January 1, 2026.
What is the Green Fee?
According to the governor’s office, the Green Fee—officially Act 96—is a first-of-its-kind climate tax targeting the tourism sector. It applies not only to hotel and short-term rental stays but also to cruise ship passengers, who were previously exempt from the TAT.
For example, travelers paying $300 per night at a hotel will now incur an additional $2.25 per night under the new tax. Though relatively modest per night, the cumulative revenue is expected to be significant.
What will it fund?
Revenue from the Green Fee is projected to bring in around $100 million annually. While the full list of funded projects will be determined in the upcoming legislative session, the fee is intended to support:
- Climate change mitigation
- Environmental stewardship
- Sustainable tourism initiatives
- Hazard and disaster resilience
- Invasive species control
- Wildlife conservation
- Beach restoration
- A youth Green Jobs Corps
Why now?
Governor Green emphasized the urgency behind the initiative, saying: “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.”
The law marks a major shift in how tourism-dependent regions can use visitor revenue to combat environmental threats and ensure sustainable growth directly.
