Palau Charts New Course with Climate Action and Sustainable Tourism Leadership

A Pacific Nation’s Bold Vision

Palau, highly vulnerable to climate change, has developed an ambitious national Climate Change Policy with aims to reach Net Zero by 2032. The nation is working towards low carbon emission development while maximizing energy efficiency and has announced plans to become the world’s first carbon neutral tourism destination.

Economic Recovery and Reform

The economy is showing promising signs of improvement in 2024 and 2025, according to the Asian Development Bank. The nation has implemented significant domestic resource mobilization measures, including a new package of tax reforms featuring a business profits tax and adjusted wage taxes. These reforms are designed to broaden the revenue base and promote equity, with inflation expected to ease to 3.7% in 2025.

Sustainable Tourism Innovation

The Ministry of Human Resources, Culture, Tourism and Development has launched a new Sustainable Tourism Strategy for 2025-2028. This strategy establishes a clear national direction for building a tourism sector that protects Palau’s unique environment, strengthens communities, and delivers long-term economic value. President Surangel S. Whipps, Jr. has emphasized that the strategy reflects ‘a shared vision to build a tourism industry that fosters pride among our people, earns respect from visitors, and inspires neighbors to do the same.’

Environmental Leadership

The government has demonstrated its commitment to environmental protection by safeguarding 80 percent of its maritime exclusive economic zone, exceeding the global 30 by 30 pledge. This initiative established the world’s sixth largest marine sanctuary, restricting fishing and drilling in tuna-rich waters, and created the world’s first shark sanctuary to protect endangered species.

Future Outlook

While the nation faces challenges, including risks to coral bleaching affecting biodiversity, fisheries, and tourism, Palau is actively addressing these through various initiatives. The country is expanding its solar farm infrastructure and implementing complementary policies, including feebates in the transport sector and green public procurement strategies to drive its sustainable transition.