Dirty dance: tourism and environment

ABSTRACT

Tourism was one of the fastest-growing sectors of the global economy before the COVID-19 pandemic, accounting for around 10% of global GDP. This has created a number of challenges including environmental degradation, especially in small island countries where the carbon footprint of tourism constitute a substantial share of carbon dioxide (CO2) emissions. This study investigates the impact of tourism on CO2 emissions in a relatively homogenous panel of 15 Caribbean countries over the period 1960–2019. The results show that international tourist arrivals have a statistically and economically significant effect on CO2 emissions, after controlling for other economic, institutional and social factors. Managing tourism sustainably requires a comprehensive set of policies and reforms aimed at reducing its environmental impact, and curbing excessive dependency on fossil fuel-based energy consumption. © 2022 International Monetary Fund.