The objective of this report is to explore the tourism industry, the effects it has on the natural environment and the ethics of the behaviour of tourism developers and operators with particular emphasis on the environmental aspects. The report uses the Porter Model as a framework of analysis of the forces driving the industry, and the natural environment is regarded as one of these forces. The industry is found to be a quickly growing industry; about 80% relies on the domestic market and this is at maturity, while the remaining 20% caters to the international market and this is the source of significant potential growth in the future. Australia's distance from the major tourism generating markets of North America, Europe and Japan is a major constraining factor in limiting further growth in international tourism. The beauty of Australia's natural environment is identified as a significant factor in attracting tourists. It is proposed that these two the constraint of distance and the attractiveness of the environment - factors combined should lead to a marketing strategy of identifying market niches that will respond to pristine environments and be prepared to pay extra for a premium product. The report describes some of the detrimental effects that tourism has had on the environment, and points out some of the potentials for degradation; but notes that these are less than that arising from other human activities notably agriculture and urbanization. A discussion of the philosophical and pragmatic aspects of ethics concludes that society is ready for an ethic on the use of the environment for the greater good of mankind, but is not yet ready for an environmental ethic that allocates the environment any intrinsic worth. The role of government is discussed and found to currently relate to three areas which could result in conflicting policies: regulating the industry; promoting the industry; and protecting the environment from the industry. It is proposed that government takes on a fourth role, coordinating the present,three, that of strategic planning for the industry. It is suggested that this would benefit the regulation, promotional and environmental aspects. The report acknowledges the difficulties in undertaking such long term and diverse planning implicit in Australia's three tier system of government, where each level has a role but none is clearly the lead role.