Hawaiʻi’s ‘green fee’ could become a global model for funding climate resilience and green technology — or a warning shot if courts strike it down.
Most visitors don’t see it, but every hotel night and cruise cabin in Hawaiʻi now carries a climate price tag: a 0.75% “green fee” that’s expected to raise around $100 million a year for climate and conservation projects. The money is supposed to restore coral reefs, harden infrastructure, and rebuild ecosystems battered by tourism and extreme weather.
Now that fee is under attack from both the cruise industry and the Trump Department of Justice.
This matters because Hawaiʻi is quietly testing a model that every tourism-heavy region will have to consider over the next decade: use visitor dollars to fund local climate solutions and green technology. If that model gets shut down in court, it won’t just be a loss for Hawaiʻi — it could chill similar efforts from the Caribbean to Mediterranean port cities.
In this post, I’ll break down what Hawaiʻi’s green fee actually does, why it’s being challenged, and how it fits into the bigger story of green technology, AI-powered planning, and climate-resilient tourism.
What Hawaiʻi’s green fee actually is — and why it’s a big deal
Hawaiʻi’s green fee is a modest tax increase with a huge strategic ambition.
Starting January 1, the state’s transient accommodations tax on hotel rooms and short-term rentals increases by 0.75 percentage points, bringing the combined state and county rate to about 14%. For cruise ships, the change is more dramatic: passengers will pay the full visitor tax on their time in port for the first time — effectively a 14% charge on cruise cabins while they’re in Hawaiʻi.
State officials estimate this will generate roughly $100 million per year for a dedicated fund to tackle climate change and environmental damage.
Here’s the thing about this fee: it’s not just another revenue stream. It’s a policy signal that says, “If you profit from Hawaiʻi’s natural beauty, you help pay to protect it.”
The Green Fee Advisory Council — chaired by Jeff Mikulina — is already reviewing 620 proposed projects totaling about $2 billion in potential investments. Those projects span:
- Reef and beach restoration and monitoring
- Wildfire prevention and watershed protection
- Climate-adaptive infrastructure
- Local conservation jobs and community-based stewardship
For a state that’s seen catastrophic wildfires, sea-level rise, coral bleaching, and overtourism all collide, this isn’t academic. It’s survival planning.
From a green technology perspective, this kind of earmarked funding is exactly what unlocks:
- Coastal resilience tech: smart sensors, early warning systems, digital twin models for flooding and erosion
- Ecosystem monitoring: AI models using satellite and drone imagery to track reef health or forest fires
- Energy and water efficiency upgrades in public facilities and tourism infrastructure
Tourism dollars become the bridge between climate risk and deployment of real solutions.
Why the cruise industry — and Trump’s DOJ — are fighting it
The cruise industry isn’t pretending this is about climate science. Their legal argument hinges on the U.S. Constitution and a 19th-century law.
Cruise Lines International Association (CLIA) claims that Hawaiʻi’s green fee, as applied to cruise cabins, violates:
- The Tonnage Clause, which limits states’ ability to tax vessels just for entering or using their ports
- The Rivers and Harbors Act, which restricts local charges on navigation and port use
Translated: they argue the state can’t treat a floating hotel like a land-based hotel when it’s sitting in the harbor.
The twist is the Trump Department of Justice jumping in on the industry’s side. Assistant Attorney General Stanley Woodward called the fee a “scheme to extort American citizens and businesses solely to benefit Hawaiʻi.” The DOJ wants the court to formally join the lawsuit, an unusual move in what is essentially a state tax and tourism policy dispute.
Legal experts in Hawaiʻi, like Richard Wallsgrove from the University of Hawaiʻi’s Environmental Law Program, see this as ideological, not technical. The same administration has already sued Hawaiʻi for trying to hold fossil fuel companies accountable for climate damage. Now it’s targeting a visitor tax that explicitly funds climate and environmental projects.
Wallsgrove’s blunt assessment: this is about the federal government “protecting” Americans from what Trump still brands a climate “hoax.”
Politically, that’s the story. Legally, the fight boils down to one question with national implications:
Can states treat high-impact industries — including cruise tourism — as climate cost centers and tax them accordingly to fund local green solutions?
If the answer is no, that narrows the tools available to states and cities that want tourists to help pay for climate resilience.
How green fees power climate tech on the ground
If you strip away the rhetoric, a green fee is basically a dedicated climate fund. And dedicated funds are what make serious green technology projects possible.
Think about what $100 million a year can realistically support in a place like Hawaiʻi:
1. Smart coastal protection
Coastal infrastructure can’t be designed on guesswork anymore. Cities and islands are already using AI and advanced modeling to plan where to build seawalls, restore dunes, or elevate roads.
A green fee can underwrite:
- High-resolution LiDAR and satellite mapping of coastlines
- AI-powered flood and erosion models that run thousands of climate scenarios
- Digital twins of ports and tourist zones to test different adaptation strategies before spending billions in concrete
That isn’t “nice-to-have” modeling. Done well, it’s the difference between spending $50 million wisely now or wasting $300 million on the wrong project in 10 years.
2. Reef and ocean health tech
Hawaiʻi’s economy is welded to its reefs. Lose them, and you lose tourism, coastal protection, and a huge amount of biodiversity.
Green fee dollars can support:
- Underwater sensor networks that track temperature, pH, and pollution in real time
- Machine learning tools that analyze drone and satellite imagery to monitor coral bleaching, algal blooms, and illegal dumping
- Data platforms that combine tourism activity, shipping routes, and environmental metrics to manage marine traffic more intelligently
That’s where AI and green technology stop being glossy buzzwords and become operational tools: closing the loop between human activity and ecosystem response.
3. Climate-smart tourism infrastructure
Tourism isn’t going away. The question is whether it can operate with a smaller footprint.
Dedicated visitor-fee funding can accelerate:
- Energy efficiency retrofits in airports, ports, and public buildings used heavily by visitors
- Smart grid and storage projects in resort-heavy regions to cut peak fossil fuel use
- AI-optimized transit systems that move visitors out of rental cars and into shuttles, micromobility, and shared rides
In other words, good policy here doesn’t just preserve landscapes — it lowers long-term operating costs and makes the destination more resilient and attractive.
Climate politics meets green technology: the bigger pattern
Hawaiʻi’s green fee fight isn’t happening in isolation. It’s part of a clear pattern in U.S. climate politics right now:
- States and cities are experimenting with practical funding tools for local climate resilience and green tech.
- The Trump administration is using federal power to block or chill those experiments — whether that’s climate accountability lawsuits, clean energy rules, or now visitor-based climate funding.
If you work in green technology, climate finance, or sustainability, this tension isn’t abstract. Your projects live or die on:
- Stable, predictable funding
- Regulatory clarity
- Political permission to treat climate risk as real
Hawaiʻi’s model is simple but powerful:
- Identify a high-impact sector (tourism).
- Apply a targeted fee that’s politically acceptable (fractional tax increase and parity for cruise passengers).
- Lock the revenue into climate and environmental projects.
- Use transparent governance (advisory council, public project lists) to maintain trust.
If courts uphold that approach, it becomes a template other regions can adapt. If courts knock it down, policymakers will think twice before tying their climate strategies to visitor or industry fees.
The reality? Markets and technology are moving faster than national politics. Local leaders are trying to catch up, and tools like green fees are one of the few ways to make that happen at the pace climate risk demands.
What this means for businesses, cities, and green tech teams
Most companies get this wrong. They treat climate policy fights as background noise instead of as direct signals about where opportunity is headed.
Here’s the more useful way to look at Hawaiʻi’s green fee battle.
If you’re in tourism, hospitality, or cruise
Expect more destinations to copy this model — especially after another hot year and a run of billion-dollar disasters.
Practical moves now:
- Plan for destination-specific climate fees as a standard cost of doing business.
- Use internal data and AI tools to quantify your own environmental footprint and identify where fee-funded projects could reduce your long-term risk.
- Partner with local governments to co-design projects (reef protection, port electrification, shore power) that align with your brand and operations.
If you’re a city, state, or regional planner
Hawaiʻi is doing the experiment for everyone else. Watch closely.
Ask yourself:
- What’s your equivalent of a visitor green fee — on tourists, high-emission industries, or luxury consumption?
- How could you earmark that revenue into a climate fund that accelerates green technology deployment rather than disappearing into a general budget?
- Do you have the data infrastructure to track impacts and prove value to residents and courts?
If you build or deploy green technology or AI solutions
A dedicated climate fund is exactly the environment where serious projects get traction.
You should be:
- Mapping where climate or green fees are in place or on the ballot, because those regions are your most likely early adopters.
- Packaging your solutions not as “cool tech” but as risk reduction tools that help justify the green fee politically: less flooding, better forecasting, lower energy bills, healthier reefs.
- Designing measurement and verification systems that can show, year over year, how each dollar of visitor-funded tech actually performs.
Why this green fee fight matters for the future of climate funding
Hawaiʻi isn’t trying to solve climate change on its own. It’s doing something more grounded: tying its biggest economic engine to the cost of staying livable.
If the green fee survives the legal assault, it will:
- Prove that tourism-backed climate funds are legally and politically viable in the U.S.
- Create a steady pipeline of capital for green technology and AI-powered resilience projects in one of the most climate-exposed places on Earth.
- Offer a practical template for other coastal and island destinations wrestling with similar pressures.
If it’s struck down or gutted, the message to other states will be clear: proceed cautiously, or not at all.
From where I sit, that would be a mistake. Climate risk isn’t waiting for perfect federal consensus. Local, dedicated climate funding — including green fees — is one of the few levers that can both protect communities and pull green technology into the mainstream at the speed we need.
For anyone building, funding, or adopting climate solutions, this is the moment to pay attention. The court’s decision in Hawaiʻi won’t just decide how cruise passengers are taxed. It’ll help decide whether visitor economies across the world can become engines for climate resilience instead of drivers of collapse.
The smarter question for 2026 and beyond isn’t “Should there be a green fee?” It’s “How fast can we turn green fees into real, measurable climate resilience — powered by the best green technology we’ve got?”