Sustainable Tourism

In the R&D-based location model, including emissions, global environmental quality is introduced along with the tourism sector and tourism mobility. In addition to pollution emissions, the environmental quality deteriorates due to the crowding effect at tourist destinations. Through externality effects, it deteriorates the productivity of the tourism sector. Reduced total emissions allowance brings economic growth and tourism mobility. It expands tourism consumption due to a pollution haven from the South to the North and the improvement of the global environmental quality. This environmental policy achieves tourism-led growth and sustainable tourism. Reduction in low airfares leads to decreased tourism consumption due to the rise in the price of tourism goods based on tourism pollution and externalities. Therefore, while it promotes industrialisation and economic growth in the North, it causes environmental degradation and tourism decline, hindering sustainable tourism. Reduction in high airfares brings about industrialisation and improved environmental quality in the South at the expense of low growth and reduced tourism. Therefore, it promoted industrialisation in developing countries that rely on tourism. The externality effects of tourism lead to a malfunctioning of environmental policy, as the high price of emission allowances undermine the incentive for manufacturing firms to reduce pollution.