The Relationship between CO2 Emissions, Air Pollution, and Tourism Flows in China: A Panel Data Analysis of Chinese Provinces

Abstract

This study quantitatively investigated the relationship between climate change (proxied by CO2 emissions), air pollution (proxied by PM2.5 concentration levels and PM10 and SO2 emissions), and tourism flows (proxied by inbound and domestic tourist arrivals) using panel data for 30 Chinese provinces from 2010 to 2017. The results demonstrate a long-term equilibrium relationship between CO2 emissions, air pollution variables, and tourism flows (including the number of inbound and domestic tourists). The panel data model results show that CO2 emissions have an opposite effect on inbound and domestic tourist arrivals, while domestic and inbound tourists positively affect CO2 emissions. PM2.5 level and PM10 and SO2 emissions all have a negative effect on the number of tourists. There is bidirectional causality between CO2 emissions and domestic tourist arrivals, which means CO2 emissions and domestic tourist arrivals have a two-way effect. A one-way causality running from PM2.5 to inbound tourist arrivals and SO2 emissions to domestic tourist arrivals was found. Moreover, we also found bidirectional causality between PM10 and inbound tourist arrivals and PM10 and domestic tourist arrivals. Variance decomposition function results suggest that PM10 and SO2 emissions have stronger effects on inbound tourist arrivals in the long term, while CO2 emissions and PM10 have stronger power in explaining innovations in domestic tourist arrivals. The movements in the domestic tourist arrivals do significantly affect CO2 emissions in the long run. The study provides theoretical implications and guidance for achieving a healthy and sustainable tourism industry.