In a bold step toward environmental protection, Hawaii’s governor Josh Green has signed a new legislation introducing a climate change tax on hotel rooms and vacation rentals. Effective from January 1, the additional tax aims to generate nearly $100 million annually to support efforts like shoreline protection, wildfire prevention, and reducing tourism’s impact on the environment.

This makes Hawaii the first U.S. state to implement a tax specifically for addressing the effects of climate change. The move follows the devastating Maui wildfire nearly two years ago that claimed 102 lives and destroyed most of Lahaina town.

The new law will add 0.75% to the existing 10.25% tax on short-term accommodations, bringing the total to 11%. Combined with other state and county taxes, tourists could pay up to 19% in accommodation taxes—among the highest in the country. Additionally, starting July 2026, cruise ships will face a new 11% tax, prorated by their stay in Hawaii ports.

Funds collected will be used for crucial projects such as replenishing Waikiki’s eroding beaches, promoting safer infrastructure with hurricane clips, and removing flammable invasive grasses. The money will also support protecting native forests and enhancing climate resilience.

Governor Green emphasized that more firebreaks and a newly created fire marshal position are needed as part of Hawaii’s climate response. “There will be no way to deal with these crises without some forward-thinking mechanism,” he said.

Though the original proposal sought a dedicated climate fund, lawmakers agreed to place the money in the state’s general fund, with a commitment that it will be allocated toward key environmental and tourism-related initiatives.

State Rep. Adrian Tam, chair of the House tourism committee, highlighted the urgency: “The visitor industry will struggle if we do not take action now. There will be nothing left for them to showcase to the rest of the world if our beaches are decimated, wildfires have taken over our towns and hikes left unmanaged.”

Despite the higher costs for travelers, Hawaii’s hotel industry supported the tax, recognizing its long-term value for both the environment and the overall visitor experience.