Environmental degradation, economic growth and tourism development in Chinese regions

Tourism development is recognised as an essential tool in promoting economic growth; however, it may also contribute to environmental degradation. Increased pressure for reducing CO₂ emissions poses new challenges to policy-makers who try to promote economic growth and environmental protection in tandem. Since 2010, 19 scenic areas in China have been declared as low-carbon tourism demonstration zones. It follows that investigating whether CO₂ emissions originating in the tourism industry could, in fact, compromise sustainable development in China becomes an essential area of study. Whilst this is a key concern to society, there are only a limited number of studies that analyse the environmental impact of tourism and the validity of the tourism-led-growth hypothesis. This study considers both domestic and international tourism and explicitly tests the relationship among tourism development, economic growth and CO₂ emissions in China, employing a panel vector autoregressive model and utilising regional data between 2006 and 2017. Results show that the development of either international or domestic tourism contributes to economic growth, however, at the expense of the environment.