| Summary: | National parks in Iceland are currently faced with an increasing number of visitors, straining the sustainability and natural quality of the parks; and calling for significant investments in park infrastructure and human resources to handle the environmental pressures from booming tourism. However, for the state which funds such investments from tax revenues, national parks and other protected areas are often seen as costs with no economic returns. This study aimed to develop and test a methodology for determining the economic impact of visitor spending in the Icelandic national parks on regional and national economies and subsequently, to calculate the economic impact to cost ratio for taxes invested in the national parks. The outcomes of this study will provide a foundation for informed discussion between stakeholders and other interested parties, e.g. authorities, managing institutions, NGOs, researchers and local communities about the costs and economic impacts of national parks. A case study of Snæfellsjökull National Park was used to develop the methodology which then later can be applied to other national parks and protected areas as well. The results also provide a reference for interesting comparisons between the economic impacts of developing protected areas for tourism vs. energy production in the 3rd phase of the Master Plan framework. The Money Generation Model 2 methodology was adapted and used for the Icelandic context to calculate the economic impact of Snæfellsjökull National Park, which proved to be very high at 3.9 billion ISK annually. Visitor spending in connection to park visits generates over 700 indicative full-time and part-time jobs, and over 900 million ISK in direct taxes. Overall economic impact to cost ratio is 58:1, and generated tax revenue is 14 times the budget of the national park. The results indicate that nature protection and nature-based tourism are economically strong alternatives to natural resource utilization, and there is a clear opportunity to develop the park ...
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