Oil depletion: What does this mean for Scottish tourism?

Over the next 10 years, Scottish tourism is expected to grow by 50%. One of the keys to that growth is transport which is a sector that is dependent upon oil. This paper considers oil and the global economy and its relationship to Scottish tourism. Consideration is given to the key variables such as oil forecasts, security of supply, cost of production, world demand, alternative forms of energy including renewables and nuclear power. The combination of these facts means that high oil prices are here to stay. Two scenarios are constructed called Energy Inflation and Paying for Climate Change. These were developed using a triangulation of methods including the use of systems thinking models to construct the scenarios to computable general equilibrium modelling to analyse the impact of oil and energy price rises on Scottish tourism. The Energy Inflation scenario presumes mass belief in the plenitude of available oil reserves and the failure to respond quickly enough to alter demand. This triggers a sudden and prolonged period of economic shocks, political instability and environmental disasters. The Paying for Climate Change scenario assumes rising energy prices, combined with conservation measures such as carbon taxes. Both scenarios raise a number of policy issues for the future including oil and fossil fuels being the main sources of energy as there is no real alternative. Renewables and nuclear power will continue to grow and countries will try to reduce further their reliance on oil. Rising oil prices are also noted as a positive feature, driving innovation and new technologies, which will become more economic as oil prices rise. For Scottish tourism, the impact of rising oil prices could mean a bumpy ride with carbon taxes, more wind farms and the possible end of the low cost carrier. (c) 2006 Published by Elsevier Ltd.