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 policymakers 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 is 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.