The Nexus Between Tourism, Environmental Degradation and Economic Growth

Abstract

This study analyzes the impact of tourism on environmental degradation for 32 OECD countries employing panel estimation techniques taking into consideration cross-sectional dependence. The test results demonstrate that tourism and economic growth enhance CO2 emissions in these countries. The Emirmahmutoglu-Kose panel Granger causality test show that unidirectional association running from tourism to CO2 emissions exists in OECD countries. For individual countries, bidirectional association between tourism and CO2 emissions for Canada, a unidirectional association from tourism to CO2 emissions for Chile, Germany, Ireland, Latvia, and United States exists. Bidirectional relationship is also confirmed between tourist arrivals and GDP for Austria, Germany, and Slovak Republic. Moreover, unidirectional causality is found from tourist arrivals to GDP for Colombia, Latvia, Netherlands, Poland, and Spain.