Impact of Climate Change on International Tourism Evidence from Baltic Sea Countries

Abstract

The societal consequences of climate change are still hard to measure, mostly because it is difficult to connect the physical effects of climate change to economic processes and because future climate change and economic estimates are unpredictable. The tourism industry is one of the areas where evaluating the effects of climate change has proven to be especially challenging. The primary influencing environmental elements in the coastal waters of the Baltic Sea are expected to alter as a result of climate change. This study investigates the impact of climate change on the growth of tourism in the Baltic Sea Region, focusing on international tourism. To analyze the possible short-run and long-run impact of climate change on international tourism, a dynamic panel model is used, with data for the period 2005–2022. International tourism is measured through the inbound travel expenditure and the number of overnight visitors. The effect of climate change is captured through the variables of temperature and precipitation, with real GDP and government effectiveness as control variables. Results show a significant negative impact of climate change variables on international tourism in the Baltic Sea countries. There are relatively few studies on the impact of climate change on the tourism industry in the Baltic region; this article complements the existing literature on this very important issue.