Economic Growth, Tourism Arrivals and Climate Change

This paper investigates the link between economic growth, tourism arrivals and climate change. In this research, we formulate three equations. The first equation evaluates the correlation between economic growth and tourism arrivals. The second model considers carbon dioxide emissions and tourism arrivals. Finally, we consider the determinants of tourism arrivals. We selected the period 1990-2009 for European economy using the panel data. The equation that evaluates economic growth demonstrates that tourist arrivals, energy consumption, carbon dioxide emissions and openness trade are positively correlated with economic growth. A large number of studies consider that there is a positive correlation between tourism and climate change. However, some studies show that there is an alternative hypothesis i.e. a negative association between tourist arrivals and climate change. Our results are in this direction. When we apply the fixed effects and GMM-system, the results show that income per capita, and energy consumption present a positive impact on CO2 emissions. The econometric results also demonstrate that tourism arrivals and squared income per capita are negatively correlated with CO2 emissions. The equation that analyses the determinants of tourism arrivals demonstrates that income per capita, openness trade and energy consumption present a positive effect on tourism arrivals.