Unleashing the dynamic impact of tourism industry on energy consumption, economic output, and environmental quality in China: A way forward towards environmental sustainability

Abstract

Tourism industry significantly enhances consumption, creates employment, and becomes a new engine of economic growth worldwide. However, tourism-led growth is attained at the cost of environmental damages, as tourism-related activities require higher energy consumption. We also included globalization, energy consumption, and economic growth to normalize the tourism industry sub-sectors environmental impacts. The ARDL bound testing and Gradual shift causality methods are used to analyze the environmental impacts of the tourism industry for the data spanning from 2001Q1 to 2019Q4. The outcomes indicate that tourism-related food and beverage services contribute to higher greenhouse gas emissions, especially N2O and CH4. However, compared with other sub-sectors, CO2 is primarily contributed by the tourism-traveling sector in the long run. Similarly, the food and beverages services also contribute highly to all air pollutants except PM2.5, while shopping and entertainment is the most significant sector contributing to N2O, CH4, and all other air pollutants in the long run. Moreover, all tourism industry sub-sectors have a significant and favorable impact on energy consumption and economic growth, whereas tourism-linked traveling consumes higher energy. Likewise, shopping and entertainment contribute more to economic growth than other sub-sectors. Interestingly, greenhouse gas emissions and air pollutants are adversely affected by globalization in the long run. Causality results reveal that all the tourism industry sub-sectors Granger cause most of the greenhouse gasses and air pollutants. The key initiatives are also provided for policy implications.