The Linkage of Environmental Taxes and Tourism Toward Sustainable Development

Abstract

Tourism plays an important role in taxing the environment for sustainable development. International tourism has been the largest contributor to the growth of tourism and the economy. As a result, the emissions caused by tourists have increased, raising the issue of sustainable development. To improve environmental performance, environmental taxes play an important role. The aim of this paper is therefore to analyse the impact of environmental taxes, international tourist arrivals and environmental regulations on sustainable development in 19 EU countries in the period 2003-2020. A dynamic panel regression model was used to obtain empirical results in the short and long run, using estimators for the mean group and the pooled mean group. The empirical results show that environmental regulations and gross domestic product per capita have a negative long-term impact on CO2 emissions. However, environmental taxes have a positive effect on CO2 emissions in the long run. On the other hand, increasing gross domestic product and the number of tourists have a positive effect on CO2 emissions in the short run, implying that they are the cause of increasing pollution.