Policy & Regulation

Hawaii's New Climate Tax Funding Priorities Will Shape Resilience Investments and Business Opportunities

·5 min read·👀 Watch

Executive Summary

The initial $100 million annual allocation from Hawaii's new climate change tax, collected since January 1, will prioritize specific adaptation projects, directly impacting funding access for businesses and real estate owners. Investors and entrepreneurs should monitor the Green Fee Advisory Council's recommendations to align strategies with state priorities.

  • Investors: Funding focus will steer capital towards specific climate resilience sectors.
  • Entrepreneurs & Startups: Future funding rounds or grant opportunities will depend on alignment with council priorities.
  • Agriculture & Food Producers: Water management and land use adaptation projects may receive early funding.
  • Real Estate Owners: Development projects incorporating climate resilience might gain favor for funding or permitting.
  • Tourism Operators: Investments in coastal protection and sustainable infrastructure could influence long-term operational viability.
  • Action: Watch for official Green Fee Advisory Council funding recommendations to assess alignment with your business/investment strategy.
👀

Watch & Prepare

Medium Priority⏰ Ongoing, with initial recommendations expected soon

Businesses seeking funding for climate resilience projects or those whose operations are impacted by climate change need to understand the funding priorities to align their strategies.

Monitor official announcements from the Green Fee Advisory Council regarding their recommended funding allocations. If your business or investment strategy involves climate resilience, adapt your project proposals or investment targets to align with the identified priority areas. For entrepreneurs seeking funding, this information will be critical for refining grant applications and investor pitches. Real estate developers should track which infrastructure projects are prioritized, as this may influence future zoning or building code considerations.

Who's Affected
InvestorsEntrepreneurs & StartupsAgriculture & Food ProducersReal Estate OwnersTourism Operators
Ripple Effects
  • →Prioritized climate adaptation funding → shifts in development focus (e.g., coastal resilience) → potential new permitting requirements or land-use restrictions for real estate owners.
  • →State investment in water management for agriculture → stabilization of food supply → potential trickle-down effect on consumer prices and operational costs for tourism operators.
  • →Limited annual fund allocation ($100M) vs. high demand ($2B+) → increased competition for project funding → potential delays or unmet needs for less prioritized climate resilience initiatives.
Flooded coastal area with palm trees and an occluded path post-storm damage in Florida.
Photo by Connor Scott McManus

Hawaii's New Climate Tax Funding Priorities Will Shape Resilience Investments and Business Opportunities

The Green Fee Advisory Council is set to recommend the allocation of approximately $100 million annually from Hawaii's new statewide climate change tax. This fund, which has been collecting revenue since January 1, 2026, faces over $2 billion in project funding requests, indicating a significant gap between demand and available resources. The council's choices will signal the state's immediate climate adaptation priorities, influencing where capital, both public and private, is directed.

The Change

Hawaii's pioneering statewide tax on accommodations and car rentals, aimed at funding climate change adaptation and mitigation, began collecting revenue on January 1, 2026. The Green Fee Advisory Council, responsible for recommending how these funds are spent, has received proposals totaling more than $2 billion. The council will recommend an initial annual allocation of roughly $100 million, meaning only a fraction of the proposed projects will receive immediate support.

Who's Affected

  • Investors: Investors, particularly those focused on Environmental, Social, and Governance (ESG) criteria or climate-tech, should pay close attention to the Green Fee Advisory Council's funding recommendations. The chosen projects will indicate sectors the state deems critical for climate resilience, potentially signaling future regulatory support and market opportunities. Venture capital and angel investors might see a clearer pathway for climate-focused startups if their proposed solutions align with the council's priorities.
  • Entrepreneurs & Startups: Startups developing solutions for climate adaptation (e.g., water conservation technology, sustainable agriculture practices, coastal resilience engineering, renewable energy integration) will be directly affected. Understanding which projects receive funding will be crucial for refining business models and identifying potential grant or partnership opportunities. A lack of funding in a specific area could signal a need to pivot or highlight a gap in the market.
  • Agriculture & Food Producers: This sector faces significant impacts from climate change, including changing rainfall patterns, sea-level rise, and increased storm intensity. Projects related to water resource management, drought-resistant crops, and the protection of agricultural lands from coastal erosion will likely be high on the council's agenda. Producers may find opportunities for grants or support if their operational needs align with fundable adaptation strategies.
  • Real Estate Owners: Property owners and developers will be interested in which climate resilience projects receive funding. Investments in coastal protection, updated stormwater management, and resilient building infrastructure could shape future development regulations and property values. Projects that directly enhance or protect real estate assets from climate impacts may gain a competitive advantage in securing funding or expedited permitting if aligned with state priorities.
  • Tourism Operators: The long-term viability of Hawaii's tourism industry is intrinsically linked to its environmental resilience. Funding for initiatives that protect beaches, coral reefs, and coastal infrastructure will indirectly benefit hotels, tour operators, and vacation rental businesses by preserving the natural assets that attract visitors. Understanding where funds are directed can help operators anticipate future environmental conditions and potential infrastructure improvements in key tourist areas.

Second-Order Effects

  • The prioritized allocation of climate tax funds towards specific adaptation projects (e.g., coastal defense infrastructure) could necessitate new development or land-use requirements for real estate owners in adjacent areas, potentially increasing construction costs or limiting development scope. This, in turn, could affect housing availability and labor costs for local businesses.
  • Early investment in sustainable water management systems by the state may reduce operational risks for agriculture producers, potentially stabilizing food prices for consumers and tourism operators, but could also lead to stricter water usage regulations for non-priority sectors.

What to Do

This is a WATCH situation. The Green Fee Advisory Council's recommendations will soon clarify the state's immediate investment priorities for climate adaptation. Understanding these priorities is essential for aligning business strategies, identifying funding opportunities, and anticipating market shifts.

Action Details: Monitor official announcements from the Green Fee Advisory Council regarding their recommended funding allocations. If your business or investment strategy involves climate resilience, adapt your project proposals or investment targets to align with the identified priority areas. For entrepreneurs seeking funding, this information will be critical for refining grant applications and investor pitches. Real estate developers should track which infrastructure projects are prioritized, as this may influence future zoning or building code considerations.

Related Articles

Aerial shot of firefighting base with planes, trucks, and personnel in a rural area of Brazil.
Policy & Regulation

PUC Greenlights Hawaiian Electric's Wildfire Mitigation Plan, Paving the Way for Enhanced Grid Resilience

·5 min read
Close-up of a hand signing a legal document with a fountain pen, symbolizing signature and agreement.
Policy & Regulation

Hawaii's New Laws: Key Changes and Business Implications

·3 min read
A minimalist office setup featuring a planner, clipboard, card, and pen, perfect for planning and organization.
Policy & Regulation

Maui's $1.56B Budget: A New Direction for Business and Investment

·3 min read