Historic Green Fee Launched to Combat Climate Change in Hawaiʻi

In a groundbreaking move for climate action, Governor Josh Green, M.D., has signed Senate Bill 1396 into law as Act 96, establishing the nation’s first climate impact fee, known as the “Green Fee.” The bill addresses 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.

“Today Hawaiʻi ushers in the first Green Fee in the nation. 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,” said Governor Green.

The legislation comes after the realization of the impacts that hosting 10 million visitors a year were having on our islands, and follows the devastating August 2023 wildfires on Maui. It reflects a broader strategy to respond to the growing frequency of natural disasters.

Governor Green established the Climate Advisory Team (CAT) in 2024, led by Chris Benjamin, to develop policies aimed at climate change mitigation and disaster resilience. A key recommendation of the CAT was to establish a dedicated source of funding to achieve the state’s goals. The CAT recommended the transient accommodations tax (TAT) as a potential revenue source.

Beginning in 2026, the Green Fee will increase the TAT rate by 0.75%. This move promotes equity in the tourism industry, ensuring that all visitors contribute to the sustainability of the islands.

“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. We thank the Legislature, industry, and countless community groups and individuals who advocated tirelessly for this bill.”

Expected to generate around $100 million annually, the Green Fee will fund diverse projects focusing on environmental stewardship, climate resilience and sustainable tourism.