Environmental assessment of externalities associated with tourist property development projects in coastal areas

Purpose – Coastal areas in the Republic of Croatia are the object of increasing interest of property developers in tourism and leisure sector. The paper is focused on the analysis of environmental and social impacts of such projects in local communities. Methodology – As the problem must be observed in depth and with holistic focus, the authors applied qualitative research based on observations, authors’ own experiences and the reports on previous research. Findings – Considering the fact that the sea and the coast are assets of particular interest for the Republic of Croatia, its citizens should be accorded particular legal protection, meaning that the aspects of public interest should be reviewed while considering the requirements of individual investors. Contribution – The research provides the framework for holistic analysis of the impacts of projects in tourism from the standpoint of their various externalities detrimental for public funds, taxpayers, environment and local communities and proposes a model for conducting integrated cost-benefit analysis of such projects taking into account economic development, well-being and health of local population, preservation of natural beauty, of natural assets and of sound environment. Apart from the need to facilitate economic activities in the area of maritime demesne, all citizens should be granted in an equal and equitable way the use of coastal area, provided its designated purpose is respected. It is improper to grant all benefits to the potential investor and transfer all costs, disadvantages and externalities to local communities and the state.