Environmental Kuznets curve hypothesis in the case of tourism island states: The moderating role of globalization

Abstract

AbstractThis article examines the relationship between carbon emissions and international tourism growth through the channels of globalization and real income via testing the Environmental Kuznets curve (EKC) over the periods of 1995 to 2016 for 16 selected tourism island states (TIS) that prioritized tourism as a means of maximizing economic growth. Using the dynamic panel‐based pooled mean group method of autoregressive distributed lag, results confirm globalization‐tourism‐induced EKC hypothesis for TIS. This implies international tourism growth and carbon emissions, through the channels of globalization and real income are in a long‐term equilibrium relationship. International tourism and squared term of real income have an inverse significant effect on carbon emission level, while globalization and real income without squared term exert positive and significant effects on carbon emissions level in the long run. Results of the direction of causality tests show that there is a two‐way causality between globalization and carbon emissions, while result also shows one‐way causality running from international tourism to carbon emissions level in the long‐run in the case of the TIS. Thus, globalization‐tourism‐induced EKC hypothesis is suggested in the case of TIS.