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The Linkage of Environmental Taxes and Tourism Toward Sustainable Development

Author

Listed:
  • Tanja Fatur Sikic
  • Sabina Hodzic
  • Franko Majdak

Abstract

Tourism plays an important role in taxing the environment for sustainable development. International tourism has been the largest contributor to the growth of tourism and the economy. As a result, the emissions caused by tourists have increased, raising the issue of sustainable development. To improve environmental performance, environmental taxes play an important role. The aim of this paper is therefore to analyse the impact of environmental taxes, international tourist arrivals and environmental regulations on sustainable development in 19 EU countries in the period 2003-2020. A dynamic panel regression model was used to obtain empirical results in the short and long run, using estimators for the mean group and the pooled mean group. The empirical results show that environmental regulations and gross domestic product per capita have a negative long-term impact on CO2 emissions. However, environmental taxes have a positive effect on CO2 emissions in the long run. On the other hand, increasing gross domestic product and the number of tourists have a positive effect on CO2 emissions in the short run, implying that they are the cause of increasing pollution.

Suggested Citation

  • Tanja Fatur Sikic & Sabina Hodzic & Franko Majdak, 2026. "The Linkage of Environmental Taxes and Tourism Toward Sustainable Development," Economic Alternatives, University of National and World Economy, Sofia, Bulgaria, issue 1, pages 333-348, March.
    • Handle: RePEc:nwe:eajour:y:2026:i:1:p:333-348
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    References listed on IDEAS

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    1. Pinglin He & Jing Ning & Zhongfu Yu & Hao Xiong & Huayu Shen & Hui Jin, 2019. "Can Environmental Tax Policy Really Help to Reduce Pollutant Emissions? An Empirical Study of a Panel ARDL Model Based on OECD Countries and China," Sustainability, MDPI, vol. 11(16), pages 1-32, August.
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    Keywords

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    JEL classification:

    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • Z30 - Other Special Topics - - Tourism Economics - - - General

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