Impact of eco-innovation and sustainable tourism growth on the environmental degradation: the case of China

Abstract

Climate complexities and global warming have made sustainable development a customary topic in environmental literature. Since then, various diggings have been happening in academia. Amongst them tourism and eco-innovation receives the heap due to its contribution to economic development. The study, thereby, examines the impact of tourism, economic growth and eco-innovation on environmental degradation in China. The secondary data has been extracted from World Development Indicators (WDI) database from 1988 to 2020. The nexus among the variables have been examined using Nonlinear Autoregressive Distributed Lagged (NARDL) model. Findings reveal that international tourism receipts, expenditures and number of tourist arrival, GDP, national income and inflation are positively correlated with environmental degradation, while sustainability-oriented eco-innovation is related negatively in case of China. This study has provided help to the regulators while developing new policies regarding environmental degradation by controlling emissions from economic and tourism development and using sustainability-oriented eco-innovation.

Keywords:

• International tourism receipts
• tourism growth
• national income
• economic growth
• sustainability-oriented eco-innovation
• tourist arrivals

JEL CODES:

• B41; O31; L83

1. Introduction

The environment is inextricably linked to the country’s survival, development, prosperity, and country’s future. The public personal lives, their social well-being, the country’s financial development, and its economic progress are all influenced by the country’s environmental quality (Sadiq, Ngo, et al., 2022; U. Shahzad, 2020). The environment in which human beings live, operate social activities and perform their jobs for livelihood has an impact on their physical and mental health, the quality of natural resources like water, soil, and minerals, and the health of living creatures on land, in the air, and underwater. When the living or work environment is free from pollution, it is clean and healthy; it maintains the people’s health, keeps them fresh and energetic and assists them to lead a tranquil, quality life and be efficient in their social functions (Khattak et al., 2021; Lan et al., 2022; Umar et al., 2021). Economic development of any nation is supported by healthy and fresh persons who supply efficient labor, high intellect and effective management, as well as living and non-living natural resources and the nature of the work context. The quality environment assists in attaining a higher country’s development not only in the present but also achieves the sustainable development for which it is required to assure the continued availability of energy and physical resources that are naturally found are created with the help of natural resources as well as efficient human resources (Liu, Yin, et al., 2022; Liu, Lan, et al., 2022; Mujan et al., 2019). If the natural environment is not clean and healthy, it becomes impossible to secure the natural resources and human capital for the future. A polluted environment not only affects the quality of resources but can diminish them completely, and it can also become a cause of many diseases among humans. There are many contaminating factors that come into existence naturally or as a result of human activities that can degrade environmental conditions (Kamarudin et al., 2021; Sarkodie & Strezov, 2018).

It has the belief of many that high emission of hazardous gases is responsible for increased global temperature. These anthropogenic emissions are not only hurting humans but also causing harm to ecosystem. The recent reports also illustrates that emissions cause by human activities such as deforestation activities, tourism, gas flaring are responsible for 95% global warming (Altıntaş & Kassouri, 2020; Chien, Hsu et al., 2022). Consequently, global temperatures are expected to climb dramatically. CO2 emissions and their repercussions, such as global warming, affect the ecosystem, weather system, quality of natural resources like foods, water, soil, minerals, and life on the earth (Avom et al., 2020; Haroon et al., 2021). As a result, a country’s sustainable development becomes unlikely to achieve because a comfortable work context, fertile land, high-quality and abundant minerals, bio-productivity, pure water, and human resources are all necessary for sustainable economic development. Minimizing CO2 emissions can help to mitigate environmental degradation (Chien, 2022b; Mardani et al., 2019).

Tourism is one of the fast growing sectors in recent times, hence, considered a significant part of world economy. However, like others, it too has an adverse consequences when it comes to climate and environment. It is argued that tourism activities such as transportation and accommodation damages the environment drastically (Bhat, 2018; Ehsanullah et al., 2021). According to researchers, tourism collectively contributes 8% to GHG emissions and when it is not planned properly, it may cause huge and stubborn strain on environment in a longer run (Chien, Chau, et al., 2022; Wang & Wang, 2018). It is argued that there are countless reasons due to which tourism could impact environment negatively. This might cover no of tourists, different tourism activities, specific logistic services that are being offered during travelling etc. All in all, we can say that tourism growth and economic growth are two major causes of CO2 emissions and, consequently, the cause of environmental degradation for they cause an increase in economic human behaviors, as well as a variety of social and domestic activities that make use of various technology and energy sources (Appiah, 2018; Chien, 2022a; Chien, Zhang, et al., 2022). However, economic factors such as sustainability-oriented eco-innovation can help to mitigate the detrimental effects of other economic activities such as CO2 emissions management.

Eco-innovation refers to a type of innovation that helps to achieve sustainable development with the reduction in the environmental impacts of our manufacturing processes, enhancing resistance to environmental challenges on the part of the change in nature, enhancing nature’s ability to recover from environmental disasters, or ensuring optimal and responsible use of natural resources. Business processes, resources, technologies, and instruments are acquired, invented, and used in sustainability-oriented eco-innovation to reduce environmental pollution like CO emissions by employing renewable resources, reducing the fossil fuel and nuclear power consumption, or assuring energy sources’ efficient use, or effective use of the things that are the source of CO2 emissions (Bai et al., 2022; Sun et al., 2021). That is why, in the economies where the businesses encourage the adoption of sustainability-oriented innovation, CO2 emissions are minimal.

The main focus of the study is on the impacts of tourism growth and economic growth factors like on environmental degradation in China. China is a fast-growing upper-middle-income economy that is newly industrialized. As per 2021 statistics, the country’s nominal GDP is $16.6420 trillion, which accounts for an 8.5 per cent GDP growth rate. As per the nominal GDP, the country is the second-largest world economy (B. Wang & Wang, 2018). Whereas, as the GDP (PPP) puts it is the largest world economy. Agriculture among these economic sectors has the least negative environmental impacts. Rather, this sector is effective to protect environmental protection. However, industry and service based organization consume major chunk of energy and other resources which becomes the ultimate reason of polluted emissions (M. Ahmad et al., 2019).

In China, the major cause of environmental degradation is the country’s population strength and dramatic expansion in the country’s economy. The increasing population emits CO2 through respiration processes and their conduct regarding the domestic and economic decisions (Liu & Bae, 2018; Ojogiwa, 2021). Besides all other sectors, the rapid development in the tourism industry is increasing many environmental issues like declining air quality, increasing water pollution, increasing noise, and increasing biodiversity loss. Tourism not only causes pollution emissions but also makes other sectors to be a great source of pollution emissions (Jermsittiparsert, 2021; Ulucak, 2020). Among the world economies, China is considered the largest emitter of CO2 in the air, which represents it as the largest emitter of greenhouse gases. Because of this comparison, most people considers that the country is a major contribute carbon emissions. However, the situation is quite complicated if one ponders on the situation. According to deep observation, China alone has the capacity to destroy the globe. It has also revealed that the environmental condition of China is the worst ever been. The empirical analysis of M. Ahmad et al., (2018) proves that in terms of the overall greenhouse gas emission, China ranks first.

Well, the country has 48 places among the world economies in terms of per capita emissions, as it releases 7.10 tons of CO2. In this lieu, China is the 14^th largest country among the worst countries that are responsible for higher carbon emissions (Abdul Hamid et al., 2020; Ainou et al., 2022; Shahbaz et al., 2020). The environmental statistics have made it clear that China’s CO2 emissions are 10.21 billion metric tons and the US CO2 emissions are 5.30 billion metric tons, which is about half of China’s CO2 emissions. These environmental statistics also reveal that the country’s emissions cover 28% of world CO2 emissions. This sets the position of the country as the greatest greenhouse gas emitter (Aslam et al., 2021; Ali et al., 2022). Because of the ongoing rise in CO2 emissions and their negative effects on environmental quality and economic development, it is critical to focus on and address this problem. China has producing CO2 emission more than the United States, India, Japan and Germany. Figure 1 illustrates the clear picture.

Figure 1. CO2 emission in China, US, India, Japan and Germany.

Source: WDI.

Thus, the present study is aimed at analyzing the impacts of tourism and economic growth on environmental degradation. In previous studies, the impacts of tourism and economic growth on environmental degradation have been examined, but it has been done separately. For example, Lei et al. (2022) has examined only the impacts of tourism growth on environmental quality and pays no attention to overall economic growth in their investigation. The present article accumulates the effect of tourism growth and economic growth on environmental degradation. 2) CO2 emissions are the most dangerous greenhouse gas emission, and that is why they could be the most appropriate indicator of environmental degradation. The study considers CO2 emissions as a proxy of environmental degradation for analyzing the impacts of tourism and economic growth on environmental degradation is a great addition to environment-related literature. 3) This study examines how much the selected factors contribute to CO2 emissions and environmental degradation for an extended period of time in China, while in the previous literature, a little attention has been given to impacts of these variables on environmental degradation in China and in a limited period of time. So, the present study is a great contribution to the literature.

This paper is comprised of give parts: After the introductory part, the later part deals with the literature review where the theme of study is discussed in the light of past studies arguments. The next part explains the methodology part. After finding the results are compared with outcomes of past studies, and thereby, the study is supported. Near the end, the study implications are explained and followed by the study conclusion and implications.

2. Literature review

The air, water, soil, minerals, energy sources, food and non-food crops, woods, and living resources which all are elements of the environment, are necessary for the country’s overall development. A clean and healthy environment enhances the quality of these resources and triggers the country’s development. Contrary to this, the environment, which is facing pollution in large amounts, has low quality of natural resources, both living and non-living and damages the health of humans. Thus, environmental degradation becomes a hurdle to the country’s development (Hartani et al., 2021; Rehman et al., 2021). CO2 emissions are one of the most dangerous factors that could destroy the environment. Tourism and economic growth cause an increase in human-based activities that releases CO2 emissions and environmental degradation. However, if economic growth is driven by sustainability-oriented eco-innovation, it has a little negative impact on the environment because CO2 emissions are low. Many authors have investigated the relationship between tourism and economic growth with environmental degradation in the previous literature. In the following, the present article looks at the past author’s views about the relation of economic and tourism growth with environmental degradation (Tan et al., 2021; Zhao et al., 2021; Zhao et al., 2022).

Sarpong et al. (2020), investigates the relation between international tourism receipts, tourism arrivals, energy consumption, environmental quality, and quality of life. Employing a panel of eight Southern African countries for the time period of 1995–to 2017, the authors made a debate about the relationship between international tourism receipts, tourism arrivals, energy consumption, environmental quality, and quality of life. The results showed that the nature of the relationship between international tourism receipts and environmental quality depends on the use of those receipts. If the receipts from international tourism are utilized to use non-renewable energy, keeping under consideration the need for agility and responsiveness in the tourism practices, the CO2 emissions are high and environmental quality degrades. While the use of those receipts in applying renewable energy and the technologies specific to renewable energy reduces CO2 emissions and environmental degradation (Sadiq, Amayri, et al., 2022; Wirsbinna & Grega, 2021). The study by Wu and Wu (2018) identifies the relationship between international tourism receipts with economic development and environmental degradation. The data from 31 major regions in China for the time of 1995-to 2015 and a bootstrap panel Granger causality test were applied to examine the relationship between international tourism receipts with economic development and environmental degradation. The results reveal that the said constructs enhances the earnings of both the government and private entities. They can take the initiatives for economic development, and the practices for the economic development result in greenhouse gas like CO2 emissions and become a major cause of environmental degradation.

In a study about tourism development and CO2 emission, Koçak et al. (2020) examines the impacts of international tourism expenditures on CO2 emissions. The panel data about the factors and their relationships were taken from the most visited countries over the period 1995-2014. The continuously updated fully modified (CUP-FM) and the continuously updated bias-corrected (CUP-BC) estimators were conducted for analysis. When the tourism firms make expenditures for excessive transportation, information, and communication system in order to facilitate international tours, it increases the CO2 emissions from the tourism industry and degrades the environmental quality. Haseeb and Azam (2021), also examines the international tourism expenditures on environmental degradation. Authors have examined that international tourism expenditures, both inbound and outbound, are a way of maintaining tourism practices both within and beyond the country. Consistent use of transportation technology for international tourism results in smoke and heat in the atmosphere, lowering environmental quality. As a result, the available environment makes it difficult for natural resources to thrive and living beings to breathe. Anser et al. (2021), present their views about the nexus between international tourism expenditures and environmental degradation with the mediator of ICTs with the evidence from Saudi Arabia. The study implies that tourism includes the activities like use of infrastructure, other electric or mechanical appliances, technologies used for information and communication, the use of recreational technologies, and transportation. The increased international tourism expenditures increase these tourism practices and result in large CO2 emissions and environmental degradation (Sadiq, Ou, et al., 2022; Shibli et al., 2021).

The study conducted by Ali et al. (2020) analyzes the relation of structural change, international tourists’ arrivals, economic growth, and energy use to CO2 emissions. Authors collected information for the empirical analysis of structural change, international tourists’ arrivals, economic growth, and energy use impacts on CO2 emissions from Pakistan during the time 1981–to 2017. For analysis, ARDL and VECM based Granger causality tests were applied. The study posits that the increase in the number of international tourists’ arrivals gives rise to tourism growth and the growth of other industries as well. Consequently, when the energy consumption rises in the country, there is a large volume of CO2 in the air, and the environment loses its stability. Gyamfi et al. (2022), determine the extent to which the international tourists’ arrivals intensify CO2 emissions into the air. The data for the relation between tourists’ arrivals, economic growth, energy use and CO2 emissions were acquired from G7 countries spanning the period from 1995 to 2018. The authors employed dynamic panel estimations like DOLS, FMOLS, and PMG-ARDL estimation techniques for establishing the relationship between the variables of study interest. The study posits that CO2 is linked to economic activities and energy consumption. When in a result of increasing international tourists’ arrivals, economic activities and energy consumption increases CO2 emissions and causes environmental degradation.

A study was initiated by Magazzino et al. (2021) to analyze the impacts of renewable energy, coal consumption, and GDP on CO2 emissions. The three countries, China, India, and the USA, were the focal center of that study for an investigation into the relationship between GDP, renewable energy, coal consumption, and CO2 emissions. With the machine learning approach and Direction from the Dependency algorithm, the dependent and independent variables were selected, and the nature of relationships among these variables was predicted. The results revealed that GDP has both positive and negative impacts on CO2 emissions. GDP positively contributes to CO2 emissions if non-renewable energy is applied for agility in the production processes. GDP prove to be a factor helpful in reducing CO2 emissions whenever GDP growth enables to produce and utilize renewable and clean energy. In a literary article, Ameyaw and Yao (2018) identifies the nexus between GDP, CO2 emissions and environmental degradation. Through a panel data model, the evidence was collected from five West African countries for the time 2007-to 2014. The increased resources consumption for the production of goods and services at a higher level enhances the amount of CO2 emissions; thus, it degrades the environment. Gong et al. (2019), sorted out the data from the last 4 Five Year Plans during the time 1995-to 2015 for the analysis of GDP on CO2 emissions and environmental degradation. The study reveals that With rising GDP and technical breakthroughs, the use of technology and energy sources expands, resulting in a potentially dangerous increase in CO2 emissions that could cause environmental degradation.

Through empirical research, Barra and Zotti (2018) integrate the relationship between national income and environmental degradation. The GDP and CO2 emissions were used as the proxies of national income and environmental degradation, respectively. For the research sample, 120 countries were surveyed for the period 2000–2009. For the identification of the relationship between national income and environmental degradation through a panel unit root test and two-step generalized method of moments (GMM) estimator. According to the study, when a country’s national income is high, the country’s production of products and services rises. When technologies that demand a lot of potential energy are employed to create quick and creative products or services that suit the needs of customers, environmental degradation is considerably high due to large CO2 emissions. The global empirical research, Zhang et al. (2019) examined the influences of national income on CO2 emissions from manufacturing and construction industries and environmental degradation. The 121 countries across the world serve as the sample for the research and provide information regarding the relation among under research variables for the period of 1960-to 2014. The research highlights that when the NNI is high, the construction and developmental practices are at their peak. Construction and manufacturing methods have been proven to enhance CO2 emissions into the atmosphere and degrade the environmental situation. In a literary article, Dong et al. (2020) announces that when there is high NNI, the increased employment and incomes enhance the purchasing power of the general people. Thus, they are able to improve their living style by adopting innovative mechanical appliances, machines, and transport modes that rely on fuel from renewable and non-renewable energy sources. These adoptions cause the release of harmful substances, including CO2 emissions and in this way, degrades the environmental conditions.

Through deep research, Musarat et al. (2021) integrate the relation of inflation rate with CO2 emissions and the environment in a country with reference to the construction industry. The authors acquired data for research from the Government Department of Malaysia. The SPSS was applied for correlation coefficient performance so that the impacts of inflation on CO2 emissions can be acquired. The research revealed that in the economy facing high inflation, the construction works are going on at the peak both at the private and state level, the use of the technologies during construction and the use of production technologies for the preparation of construction material emit harmful gases like CO2. This harmful gas disturbs the quality of the atmosphere and causes environmental degradation. A study was made by Ullah et al. (2020) analyzes the impacts of GDP growth and inflation instability on environmental degradation. ARDL methodological approach was applied, and a quantitative research survey was conducted on the Pakistani economy over the time 1975 to 2018 so that the information for the GDP growth, inflation instability impacts on environmental degradation. The research says that the positive inflation shocks are helpful to control CO2 and N2O and protect the environment. But, the negative shocks of inflation instability positively influence CO2 and N2O and thus, deteriorates the environment. According to proclaim Shahbaz et al. (2021), the investment in developmental activities increases during inflation, boosts the productivity of many other industries and degrades the environment with CO2 emissions.

A study was presented by L. Wang et al. (2020) to identify the relation of innovation in renewable energy consumption and environmental context and export diversification to CO2 emissions and environmental quality. The study chose G7 economies like Germany, Italy, France, Japan, the United States, the United Kingdom, and Canada. The data regarding the association of eco-innovation and export diversification with CO2 emissions and environmental degradation were collected from these economies for the 28 years spanning stretching from 1990 to 2017. An analytical technique like a CS-ARDL was employed in this research to analyze the required relationship among the under-research factors for both the long and short-run. The results found a negative relationship between sustainability-oriented eco-innovation and environmental degradation. As the economy’s predisposition to adopt eco-innovation grows, the amount of CO2 emissions can be more effective, and thus, environmental degradation can be minimized. Ding et al. (2021), wrote about the impacts of energy production and eco-innovation on consumption-based CO2 emissions. G7 countries for the period of 1990-2018, were the focal center for the collection of data regarding. Different econometric techniques like Westerlund panel co-integration test, slope homogeneity and cross-section dependence test, augmented mean group, cross-sectional autoregressive distributed lag, panel causality test, were employed for nexus analysis. As per the study findings eco-innovation has a negative relation with CO2 emissions for the use of unclean energy decreases leading to the ability to overcome CO2 emissions.

3. Research methodology

The paper examines the effect of tourism and economic growth, and sustainability-oriented eco-innovation on environmental degradation in China. The study has taken the international tourism receipts, expenditures and number of tourist arrival to measure tourism growth, while GDP, national income and inflation have been taken to measure economic growth, and high technology exports (% of manufactured exports) is the measurement of sustainability-oriented eco-innovation. The secondary data has been extracted from the WDI database from 1988 to 2020. The study used NARDL technique to assess the relationship. equation for the current article is given as under: (1) $${CO2}_t=\mathrm{ }{\alpha }_0+\mathrm{ }{\beta }_1{\mathit{ITR}}_t+\mathrm{ }{\beta }_2{\mathit{ITE}}_t+\mathrm{ }{\beta }_3{\mathit{ITA}}_t+\mathrm{ }{\beta }_4{\mathit{GDP}}_t+\mathrm{ }{\beta }_5{\mathit{INF}}_t+{\beta }_6{\mathit{NNI}}_t+{\beta }_7{\mathit{EIN}}_t+\mathrm{ }{e}_t$$(1)

Where;

CO2 = Carbon Emissiont = Time Period

ITR = International Tourism Receipts

ITE = International Tourism Expenditures

ITA = International number of Tourist Arrivals

GDP = Gross Domestic Product

INF = Inflation

NNI = Net National Income

EIN = Eco-innovation

The current study has investigated environmental degradation, which is measured as Carbon dioxide damage (% of GNI). Moreover, tourism and economic growth and sustainability-oriented eco-innovation have been taken as the independent variables. Table 1 provides the detailed of each variable sources and how they are measured in present study.

Table 1. Variables with measurements.

S#	Variables	Measurement	Sources
01	Carbon Emission	CO2 damages (% of GNI)	WDI
02	International Tourism Receipts	IT receipts (% of total exports)	WDI
03	International Tourism Expenditures	IT expenditures (% of total imports)	WDI
04	International number of Tourist Arrivals	International tourism, number of arrivals	WDI
05	Gross Domestic Product	GDP growth (annual %)	WDI
06	Inflation	Inflation, consumer price (% annual)	WDI
07	National Income	Adjusted net national income (annual % growth)	WDI
08	Eco-innovation	High technology exports (% of manufactured exports)	WDI

Source: Author’s estimation.

The current paper has run the descriptive statistics that provide the mean, minimum, number of observations used, maximum, and standard deviation. Moreover, the current paper has also run the year-wise descriptive statistics that show the details of all the constructs from 1988 to 2020. The study also applied the correlation matrix to test the directional linkage among constructs. The study also employed the PP and ADF tests for examined the unit root. The equation for the test is given as under: (2) $${d(Y}_t)={{{\alpha }_0+\mathrm{ }\beta t+\mathrm{ }{\rm Y}Y}_{t-1}}_{\mathrm{ }}+\mathrm{ }d(Y_t\left(-1\right))+\mathrm{ }{\mathrm{Ɛ}}_t$$(2)

The results of ADF and PP provide the justification for the application of the ARDL model in the study. The ARDL approach has four advantages. Firstly, the ARDL model could be applicable when the variables are stationary at I(0) and I(1)(1) $${CO2}_t=\mathrm{ }{\alpha }_0+\mathrm{ }{\beta }_1{\mathit{ITR}}_t+\mathrm{ }{\beta }_2{\mathit{ITE}}_t+\mathrm{ }{\beta }_3{\mathit{ITA}}_t+\mathrm{ }{\beta }_4{\mathit{GDP}}_t+\mathrm{ }{\beta }_5{\mathit{INF}}_t+{\beta }_6{\mathit{NNI}}_t+{\beta }_7{\mathit{EIN}}_t+\mathrm{ }{e}_t$$(1) (M. Ahmad et al., 2018). Secondly, this approach is more straightforward as opposed to other co-integration approaches. This ARDL approach facilitates, once the lag order is identified, to inspect the association through the OLS method. Third, unlike other approaches for the co-integration test, the ARDL procedures do not necessarily need the pre-testing, such as the unit root test (S. J. H. Shahzad et al., 2017). Fourth, the ARDL approach is more efficient than other methods when the span of the sample period is smaller (Hoang, 2021). The ARDL equation is given below: (3) $${\Delta CO2}_t={{{\alpha }_0+\mathrm{ }\sum \delta }_1\Delta CO2}_{t-1\mathrm{ }}+\mathrm{ }{\sum \delta }_2\Delta {\mathit{ITR}}_{t-1}+\mathrm{ }{\sum \delta }_3\Delta {\mathit{ITE}}_{t-1}+\mathrm{ }{\sum \delta }_4\Delta {\mathit{LITA}}_{t-1}+{\sum \delta }_5\Delta {\mathit{GDP}}_{t-1}+{\sum \delta }_6\Delta {\mathit{INF}}_{t-1}+{\sum \delta }_7\Delta {\mathit{NNI}}_{t-1}+{\sum \delta }_8\Delta {\mathit{EIN}}_{t-1}+{{\phi }_{1}CO2}_{t-1\mathrm{ }}+\mathrm{ }{\phi }_2{\mathit{ITR}}_{t-1}+\mathrm{ }{\phi }_3{\mathit{ITE}}_{t-1}+\mathrm{ }{\phi }_4{\mathit{LITA}}_{t-1}+{{\phi }_5{\mathit{GDP}}_{t-1}+\phi }_6{\mathit{INF}}_{t-1}+{\phi }_7{\mathit{NNI}}_{t-1}+{\phi }_8{\mathit{EIN}}_{t-1}+\mathrm{ }{\mathrm{Ɛ}}_t$$(3)

The current study has also examined the asymmetric nexus between inflation, national income and environmental degradation. Thus, the current study has developed the equation using these asymmetric nexuses as under: (4) $${CO2}_t=\mathrm{ }{\alpha }_0+\mathrm{ }{\beta }_1{\mathit{ITR}}_t+\mathrm{ }{\beta }_2{\mathit{ITE}}_t+\mathrm{ }{\beta }_3{\mathit{LITA}}_t+\mathrm{ }{\beta }_4{\mathit{GDP}}_t+{{\beta }_5{\mathit{INF}}_t}^{+}\mathrm{ }+{{\beta }_6{\mathit{INF}}_t}^{-}+{{\beta }_7{\mathit{NNI}}_t}^{+}+\mathrm{ }{{\beta }_8{\mathit{NNI}}_t}^{-}+e_t$$(4)

The current study has also provided the individual equations for the asymmetric association among inflation, national income and environmental degradation given below: (5) $${\mathit{INF}}^{+}=\sum _{i=1}^t{\Delta \mathit{INF}}_i^{+}=\sum _{i=1}^t{\max (\Delta \mathit{INF}}_{i}0)$$(5) (6) $${\mathit{INF}}^{-}=\sum _{i=1}^t{\Delta \mathit{INF}}_i^{-}=\sum _{i=1}^t{\min (\Delta \mathit{INF}}_{i}0)$$(6) (7) $${\mathit{NNI}}^{+}=\sum _{i=1}^t{\Delta \mathit{NNI}}_i^{+}=\sum _{i=1}^t{\max (\Delta \mathit{NNI}}_{i}0)$$(7) (8) $${\mathit{NNI}}^{-}=\sum _{i=1}^t{\Delta \mathit{NNI}}_i^{-}=\sum _{i=1}^t{\min (\Delta \mathit{NNI}}_{i}0)$$(8)

Finally, the present article joined the ARDL model and asymmetric association among the variables and developed the NARDL equation as under: (9) $${\Delta CO2}_t={{{\alpha }_0+\mathrm{ }\sum \delta }_1\Delta CO2}_{t-1\mathrm{ }}+\mathrm{ }{\sum \delta }_2\Delta {\mathit{ITR}}_{t-1}+\mathrm{ }{\sum \delta }_3\Delta {\mathit{ITE}}_{t-1}+\mathrm{ }{\sum \delta }_4\Delta {\mathit{LITA}}_{t-1}+\mathrm{ }{\sum \delta }_5\Delta {\mathit{GDP}}_{t-1}+\mathrm{ }{\sum \delta }_6\Delta {\mathit{EIN}}_{t-1}+{\sum \delta }_7{\Delta \mathit{INF}}_{t-1}^{+}+{\sum \delta }_8{\Delta \mathit{INF}}_{t-1}^{-}+{\sum \delta }_9{\Delta \mathit{NNI}}_{t-1}^{+}+{\sum \delta }_{10}{\Delta \mathit{NNI}}_{t-1}^{-}+{{\phi }_{1}CO2}_{t-1\mathrm{ }}+\mathrm{ }{\phi }_2{\mathit{ITR}}_{t-1}+\mathrm{ }{\phi }_3{\mathit{ITE}}_{t-1}+\mathrm{ }{\phi }_4{\mathit{LITA}}_{t-1}+{{\phi }_5{\mathit{GDP}}_{t-1}+{\phi }_6{\mathit{EIN}}_{t-1}+\phi }_7{\mathit{INF}}_{t-1}^{+}+{\phi }_8{\mathit{INF}}_{t-1}^{-}+{\phi }_9{\mathit{NNI}}_{t-1}^{+}+\mathrm{ }{\phi }_{10}{\mathit{NNI}}_{t-1}^{-}+\mathrm{ }{\mathrm{Ɛ}}_t$$(9)

4. Results of the study

Descriptives were applied to examine the mean values of variables along with minimum, maximum and standard deviation values. The study has used a total 33 observations because the data was collected from 1988 to 2020. As we can see in Table 2 that average value of carbon dioxide is 5.412% followed by ITR 9.563%, ITE 9.633%, ITA 9.53%, GDP, 9.031%, INF 4.89%, NNI 10.560%, EIN 30.53%.

Table 2. Descriptive statistics.

Variable	Obs	Mean	Std. Dev.	Min	Max
CO2	33	5.412	1.904	2.984	9.097
ITR	33	9.563	4.947	2.901	17.610
ITE	33	9.633	5.751	1.909	19.028
ITA	33	95387978	42584841	28672775	1.625e + 08
GDP	33	9.031	2.846	2.348	14.231
INF	33	4.898	6.344	−1.401	24.257
NNI	33	10.560	3.145	4.631	15.513
EIN	33	30.532	0.583	29.364	32.124

Source: Author’s estimation.

Year-wise descriptives were also done in order to showcase the yearly details of each variable. Results reveal that in 1990, CO2 was around 2.98%. According to results ITR was its at lowest in 1988 and highest in 2020 with 17.61% value. Also, in case of ITE, it was highest in 2020 and low in 1989. ITA had maximum value in 1989 which was 1.62 e + 08 and minimum in 2013. Furthermore, GDP’s maximum value happened to occur in 2016 and minimum in 1988. In case of INF, the highest value was 24.25% in 2008 and −14% in the year 2002. In case of NNI and EIN, maximum values were observed in 2016 and 2010 respectively. Figure 2 and Table 3 provides detailed picture of descriptives.

Figure 2. Descriptive statistics.

Source: Author’s estimation.

Table 3. Descriptive statistics by years.

Years	CO2	ITR	ITE	ITA	GDP	INF	NNI	EIN
1988	3.073	2.901	1.909	30402000	2.348	2.419	5.073	30.071
1989	3.086	3.009	2.030	1.625e + 08	5.950	2.899	5.082	30.100
1990	2.984	3.119	2.150	1.586e + 08	6.750	2.075	5.200	30.129
1991	3.107	3.228	2.271	1.533e + 08	6.947	1.593	7.927	30.157
1992	3.176	3.337	2.391	1.418e + 08	6.849	2.000	8.538	30.186
1993	3.201	3.447	2.512	1.338e + 08	7.041	1.437	7.958	30.215
1994	3.302	3.556	2.632	1.285e + 08	7.426	1.922	8.849	30.244
1995	3.492	3.665	2.753	1.291e + 08	7.766	2.621	6.788	30.273
1996	3.659	3.774	2.873	1.324e + 08	7.864	2.620	10.661	30.301
1997	5.914	4.589	3.858	1.090e + 08	10.114	3.825	11.376	30.330
1998	5.775	4.195	4.076	91662000	10.038	1.128	11.938	30.359
1999	5.330	8.780	7.971	97908000	9.134	−0.732	12.239	30.388
2000	5.125	9.112	8.306	89013000	8.336	0.719	11.651	30.417
2001	5.283	9.113	8.792	83444000	8.490	0.348	9.591	30.445
2002	5.459	10.012	9.746	72796000	7.662	−1.401	9.559	30.474
2003	5.622	9.358	10.195	63478000	7.846	−0.773	8.751	30.503
2004	6.044	8.984	9.436	57588000	9.237	2.786	9.520	30.532
2005	6.476	10.066	10.220	51128000	9.923	8.313	12.66	30.561
2006	8.160	10.569	10.807	60970046	11.223	18.812	12.292	30.589
2007	7.024	11.072	11.395	56356150	10.954	16.791	12.631	30.151
2008	7.952	11.575	11.982	51742254	13.037	24.257	12.970	29.364
2009	9.097	12.078	12.569	47128358	13.884	14.610	13.308	31.938
2010	8.428	12.581	13.156	42514463	14.225	6.354	13.647	32.124
2011	8.554	13.084	13.743	37900567	9.263	3.557	13.985	30.484
2012	8.183	13.587	14.331	33286671	3.920	3.052	14.324	30.849
2013	7.909	14.090	14.918	28672775	4.206	18.246	14.663	31.574
2014	6.036	14.593	15.505	1.203e + 08	11.395	1.776	13.030	29.695
2015	5.818	15.095	16.092	1.249e + 08	12.721	1.649	14.456	30.422
2016	4.837	15.598	16.679	1.319e + 08	14.231	4.817	15.513	30.243
2017	4.377	16.101	17.267	1.300e + 08	9.651	5.925	7.195	30.907
2018	4.096	16.604	17.854	1.265e + 08	9.399	−0.728	13.385	31.467
2019	4.134	17.107	18.441	1.338e + 08	10.636	3.175	9.088	30.783
2020	3.877	17.610	19.028	1.354e + 08	9.551	5.554	4.631	31.274

Source: Author’s estimation.

The study also applied the correlation matrix to test the directional linkage among constructs. The results revealed that international tourism receipts, expenditures and number of tourist arrival, GDP, national income and inflation have a significant and positive relationship with environmental degradation while EIN has a negative association with environmental degradation in China. These outcomes are mentioned in Table 4 and Figure 3.

Figure 3. Correlation matrix.

Source: Author’s estimation.

Table 4. Matrix of correlations.

Variables	CO2	ITR	ITE	GDP	INF	NNI	LITA	EIN
CO2	1.000
ITR	0.480	1.000
ITE	0.484	0.999	1.000
GDP	0.436	0.484	0.486	1.000
INF	0.595	0.260	0.263	0.319	1.000
NNI	0.749	0.497	0.494	0.502	0.337	1.000
LITA	0.750	−0.216	−0.220	0.095	−0.467	−0.427	1.000
EIN	−0.352	−0.477	0.411	0.637	−0.712	0.553	0.328	1.00

Source: Author’s estimation.

The study also employed the PP and ADF tests for examined the unit root. The results exposed that the CO2, ITR, and LITA have been stationary at the level. On the other hand, ITE, GDP, INF, NNI and EIN have been stationary at the first difference. These findings are given in Table 5.

Table 5. Unit root test.

ADF PP
Series	Level	First difference	Level	First difference
CO2	−2.092***	−4.011***	−2.099***	−5.001***
ITR	−3.020***	−5.904***	−4.018	−7.091***
ITE	−1.219	−4.520***	−1.123	−5.073***
GDP	−1.882	−5.762***	−1.152	−4.099***
INF	−1.019	−5.901***	−1.460	−4.925***
NNI	−1.088	−5.099***	−3.092***	−7.214***
LITA	−3.100***	−5.410***	−4.662***	−8.091***
EIN	−0.281	−5.812***	−0.527	−5.627***

Source: Author’s estimation.

The co-integration has been examined using the ARDL bound test, an essential part for applying the ARDL model. The results indicated that the 4.992 calculated f-statistics value is higher than the upper and lower bound values. This is the indication that co-integration exists. These outputs are mentioned in Table 6.

Table 6. Bound test of nonlinear ARDL.

	F-statistics	Lower bound	Upper bound	Decision
Linear ARDL	0.77	3.09	3.98	No Co-integration
Asymmetric ARDL	4.992	3.21	3.99	Co-integration

Source: Author’s estimation.

The NARDL results revealed that ‘international tourism receipts, expenditures and number of tourist arrival, GDP, national income and inflation’ have a significant and positive relationship with environmental degradation while EIN has a negative relationship with environmental degradation in China. In addition, the results also investigated that asymmetric relationships exist between inflation, national income and environmental degradation. These findings are given in Table 7.

Table 7. Nonlinear ARDL Results.

Variables	Coefficients	Std. Err.	t-statistics
C	2.982	1.109	2.689
CO2 (-1)	2.028	0.876	2.315
ITR (-1)	0.294	0.093	3.161
ITE (-1)	0.557	0.199	2.799
LITA (-1)	1.934	0.923	2.095
GDP (-1)	0.855	0.391	2.187
EIN (-1)	−1.721	0.528	−3.259
INF-P (-1)	1.767	0.532	3.321
INF-N (-1)	0.775	0.210	3.690
NNI-P (-1)	0.202	0.099	2.040
NNI-N (-1)	0.902	0.291	3.099
Adj. R Square	0.543
F-statistics	51.098
Prob.(F-statistics)	0.002

Source: Author’s estimation.

5. Discussions

The results stated that international tourism receipts have a positive link to environmental degradation. These results are supported by Nathaniel et al. (2021), which shows that when the tourism industry is making progress and successfully achieving receipts from international sources through selling tourism tickets, their financial capacity increases, and they can spend on increasing tourism practices. The increase in tourism practices which include the use of energy for operating different small or large machines and technologies causes environmental degradation with an increase in the abominating gases. These results agree with Danish and Wang (2018), which examines the association between tourism receipts and environmental degradation. This study reveals that with the increase in the number of receipts from carrying on the tourism projects for international tourists, the firms can have the receipts with increased value. In this case, they become able to apply innovation in the tourism services they are providing. This innovation in the form of new technologies adoption, though it gives rise to the tourism industry, also causes harmful gases which can destroy the ozone layer, overly warm up the earth, and thereby degrades the environmental situation.

The study results indicated that international tourism expenditures have a positive link to environmental degradation. These results match with Balsalobre-Lorente et al. (2020), which shows that the expenditures on international tourism, both inbound and outbound tourism, are the way of continuing the tourism practices both within and outside the country. The consistent use of transportation technologies for international tourism purposes causes smoke and heat in the atmosphere and degrades the environmental quality. So, the environment available is of the kind that it becomes difficult for the natural resources to flourish and living creatures to breathe. These results also agree with Gulistan et al. (2020), which highlights that the international tourism firms make expenditures on the infrastructure like buildings or road construction and the adoption of tourism information and communication system which assist in remaining in contact with stakeholders, advertise tourism practices, attract the tourists, and provide them with a plate-form to get together. These expenditures increase the use of construction or ICT technologies and cause greenhouse gas emissions to destroy the environment. These results are supported by Katircioglu et al. (2018), which highlights that the increase in the expenditures on international tourism, like the adoption of swift and comfortable modes of transportation, enhances the use of energy and leads the industry to environmental pollution.

The results stated that international tourist arrivals have a positive impact linked to environmental degradation. These results agree with F. Ahmad et al. (2019), which states that one of the great sources of environmental pollution is the existence of human beings as the respiration in the living beings emits harmful gases in the air. So, when the international tourists’ arrivals become more frequent than earlier, the population number increases in the country, and a large amount of CO2 emissions distracts the environmental elements from performing their functions duly. That is why an increasing number of foreign tourists enhances the environmental degradation in one region. These results relate to Sharif et al. (2020), whose focus is on the relation of global tourists arrivals with environmental degradation. The study posits that there is a need to create accommodation facilities, transportation facilities, food, and entertainment activities, whenever there is an increase in the number of tourists from other neighboring countries. The expansion of technological practices in order to meet the demands of foreign tourists cause greenhouse gas emissions. This disturbs the weather pattern and geographical characteristics, and as a result, the environmental degradation puts the country on trial.

The results revealed that GDP and environmental degradation share positive connection. Results support the evidences of Mardones and del Rio (2019) . In this study, the authors are of the view that the increase in the country’s growth with the high GDP growth enhances the production in all the economic sectors. The production of the goods and services on one side is essential to the country’s well-being, while on the other hand, it is a threat to public well-being and the country’s sustainable development for it causes greenhouse gas emissions, chemicals creation, and creation of harmful substances through wastes. The results are also in line with Pandey and Rastogi (2019), which states that in the case of high GDP, the production level in the economy is high. In production processes, different manual and electronic machines are used. The nature of the machines is dependent on the nature of goods and services being produced; the nature of the machines determines the use of energy and emissions of pollution. The heavy machines cause much environmental degradation. These results are also supported by Ergun and Rivas (2020), which analyzes how much environmental degradation is caused by GDP growth. The study implies that the use of plants and different technologies that are based on fuel consumption is the biggest source of greenhouse gas emissions. So, the increased production, which requires technologies and energy, enhances environmental degradation.

The results stated that inflation has a positive link to environmental degradation. These results are in line with Baloch et al. (2020), which shows that it is commonly known that when there is an upward movement in the prices of different commodities, the production of those commodities increases in the economy as they could bring more profits and the increased production with high technology and mechanical processes adversely affect the environmental quality. Hence, inflation in the country deteriorates the environment. Results agree with Deka et al. (2022), which shows that the increase in financial resources with the government as a result of inflation in the country strengthens the government’s position to set the future economic plans and make them implemented. In this process, many resources produced and provided by the firms are utilized. When the increased demands of resources end with the greater production level, the environmental condition degrades due to increased greenhouse gas emissions. These results are also in line with Islam et al. (2021), which posits that when there is high inflation in the country, the production level goes high, and the use of any source of energy degrades the environment.

Similarly, NNI and environmental degradation also share positive connection. Hence supports Ozcan et al. (2020) study, which highlights that in countries with high NNI, the direct and indirect revenues of the government are high, and this provides financial power to the government. When the government having high financial power takes steps for the development of the country, like development in education, medical, and city infrastructure, the production of relevant goods and services increases. When there is an addition in the production practices, the emissions of wastes and other harmful substances are also at a larger scale, and eventually, the environmental condition degrades. These results are in line with Raza et al. (2019), which examines the influences of NNI impacts on environmental quality. The increased NNI, with an increase in the employment ratio and promotion in the income level, enhances the procurement and use of mechanical home appliances and social technologies for facilitating their personal lives. The increased use of mechanical appliances and technologies creates CO2 emissions and roadblocks to environmental quality. Hence, the increased NNI causes environmental degradation.

Eco-innovation was found to be negative when it comes to environmental degradation. These results agree with Fethi and Rahuma (2019), which examines the role of sustainability-oriented eco-innovation in environmental degradation. This study posits that the usage of energy-efficient technologies stems from the embrace of eco-innovation. When businesses use energy-efficient technologies, they minimize their energy consumption to the greatest extent possible while simultaneously reducing their negative environmental implications. Reduced energy consumption ends in reducing CO2 emissions and saves the environment from getting degraded. Eco-innovation, therefore, has a negative relationship with environmental degradation. These results are also supported by Tao, Umar et al. (2021), according to which When it comes to corporate operations like production, communication, and marketing, eco-innovation uses resources (physical and technological resources) and processes that use less energy than traditionally utilized resources and procedures. The energy used in less amount allows a decrease in CO2 emissions, resulting in a cleaner environment and a more sustainable economy.

6. Conclusions

It has been the general problem for all the countries that as the economies have been making progress in technologies, mechanical processes, and other resources, and globalization has become common, the environmental issues have been getting increased. The environment that is important to human survival and economic progress in the future, needs protection from degradation. The authors of the present study considered this issue and took a step to investigate the causes of environmental degradation. They were to throw light on tourism and economic growth as the causes of environmental degradation and analyze the impacts various factors of tourism growth such as international tourism receipts, international tourism expenditures, arrivals of international tourists along with economic growth factors such as GDP, inflation, NNI, and sustainability-oriented eco-innovation on environmental degradation. The evidence for the variables and their relationship were collected in quantitative form from China. The results based on the empirical investigation showed a positive among variables except eco-innovation. The results indicated that the increase in the receipts from international tourism practices improves the financial position of state-owned and private authorities within the country and, when directly or indirectly leads to an increase in production level, causes CO2 emissions and environmental degradation. The results denoted that international tourism expenditures increase the tourism practices that are linked to many economic sectors. Increased use of technologies, energy, chemical, medicines enhance the CO2 emissions and degrades the environmental quality. When tourists from foreign countries make their arrival frequent, they exist by themselves, and the increase in the use of basic or recreational needs enhances CO2 emissions and environmental degradation. The results also revealed that the increase in the GDP and NNI stimulate economic activities like manufacturing, trading, aid to trade activities, and services production. This results in environmental deterioration. The inflation also, with the increase in production and consumption level, generates higher carbon emissions. The results showed that eco-innovation has a negative relationship with environmental degradation. The innovation in the different business areas for the purpose of reducing environmental impacts of the business practices, reduces the CO2 and environmental degradation.

7. Implications

Both sort of implications can be drawn from the present article. First and foremost, it is a great addition to the environmental literature as it purely focuses on the environment related activities. On the basis of conclusion, multiple policies can be proposed in order to reduce carbon emission. Under the evidences, China should enhance its real income so that its environmental standards can be improved. In this regard, green energy policy could be a great initiative as it has a potential to create environmental sustainability. Furthermore, increasing technological service to facilitate international tourist could also be an excellent approach to mitigate carbon emissions

The present study is also unique in a way that it examined the collective analysis of tourism and economic growth impacts on environmental degradation. The present study, which initiates in this regard, is a great extension of the theory on environmental quality. This study guides many responsible entities, the state authorities, environmental regulators, and economists, on how they can control CO2 emissions and environmental quality. This study has provided help to the regulators while developing new policies regarding environmental degradation by controlling emissions from economic and tourism development. The study provides a guideline that the tourism industry must be grown, but through effective policies, the negative environmental impacts of international tourism receipts, international tourism expenditures, arrivals of international tourists can be minimized. Similarly, the present article also suggests that with effective economic management, the adverse environmental impacts of increasing GDP, inflation, and NNI can be controlled. The study suggested that the government and environmental regulators should implement the policies for encouraging eco-innovation so that CO2 emissions can be reduced, and environmental conditions do not degrade.

8. Limitations

The present study has many limitations despite the theoretical contributions. These limitations must be removed with some suitable additions. The present study examines the impacts of only tourism and economic growth on CO2 emissions and environmental degradation. Some of the major causes of CO2 emissions and environmental degradation are population growth, energy production and consumption, technological advancements etc., but there is no attention to these essential sources of carbon emissions. This confines the scope of the study and raises the need for investigation of the impacts of these factors on CO2 emissions and environmental degradation. In this study, CO2 emissions have been used as the predictor of environmental degradation, but it is admissible that all the greenhouse gases are environmentally deteriorating and require discussion. So, it is also the duty of other authors to pay focus on all the greenhouse gases while analyzing the impact of study variables on environmental degradation.

Additional information

Funding

This research is partly funded by Van Lang University, Vietnam. This research is also partly funded by University of Economics Ho Chi Minh City, Vietnam.