A worldwide tourism-extended Environmental Kuznets Curve. New approaches in a comparative analysis

Abstract

This work aims to empirically study the exogenous impact of the tourism sector on the environment and the validity of the conventional and tourism-extended Environmental Kuznets Curve (EKC) in 69 countries from America, Europe, and Asia-Oceania between 1995 and 2016. We introduce several interesting approaches in our analysis: the consideration of three heterogeneous regions to isolate the relationship between tourism activity and environmental quality from local conditions, an environmental-legal index to consider the effect of environmental regulations on pollution, and an instrumental quantile regression methodology to avoid possible endogeneity problems. Our results show that tourism activity causes environmental damage, measured by per capita carbon dioxide emissions. We also find evidence suggesting the fulfillment of the conventional and tourism-extended EKC hypotheses for the full sample and American and Asia-Oceania countries, but not European ones. Lastly, an important policy implication emerging from our analysis refers to the importance of regulations in mitigating environmental degradation, especially in high-polluted countries, suggesting the need for governments to take an active role in this matter to ensure sustainable and responsible tourism.