Impacts of Climate Change and Air Pollution on the Tourism Industry: Evidence from Southeast Asia
Abstract
This paper examines the effects of climate change (greenhouse gas emissions) and air pollution (methane and nitrous oxide emissions) on the tourism industry in Southeast Asian (SEA) countries, using dynamic panel data for the period 1998-2012. A two-stage least squares (2SLS) method is applied by adding an instrumental variable and lagged variables to solve for endogeneity. 2SLS estimation shows that air pollution has a negative effect on total tourist arrivals but there was not enough evidence to reach a conclusion about the impact of climate change. Surprisingly, nitrous oxide emission was the key driver which negatively and significantly affected tourist demand. This emission is largely caused by high levels of fossil fuel consumption and motor vehicle traffic. These findings suggest that governments may need to make critical policy decisions about whether to give up short-term economic growth to pursue long-term environmental improvement, with a view to enhancing the quality of tourist destinations in Southeast Asia in the future.
References
[1] Admassu, M. and Wubeshet, M. 2006. Air Pollution. University of Gondar, Lecture notes for Environmental Health Science Students, Ethiopia.
[2] Akhmat, G., Zaman, K., Shukui, T., and Sajjad, F. 2014a. Does energy consumption contribute to climate change? Evidence from major regions of the world. Renewable and Sustainable Energy Reviews, 36: 123-134. DOI:https://doi.org/10.1016/j.rser.2014.04.044
[3] Akhmat, G., et al. 2014b. A contemporary landscape of air pollution and greenhouse gas emissions leads to inevitable phenomena of low birthweight. Environmental Science and Pollution Research, 21(15)> 9408-9414. DOI:https://doi.org/10.1007/s11356-014-2867-y
[4] Anderson, T.W. and Hsiao, C. 1981. Estimation of Dynamic Models with Error Components. Journal of the American Statistical Association, 76(375). DOI:https://doi.org/10.1080/01621459.1981.10477691
[5] Arah, O.A. 2008. The role of causal reasoning in understanding Simpson’s paradox, Lord’s paradox, and the suppression effect: covariate selection in the analysis of observational studies. Emerging Themes in Epidemiology, 5(1). DOI:https://doi.org/10.1186/1742-7622-5-5
[6] Australian Academy of Science 2015. The science of climate change: Questions and Answers. Australian Academy of Science, Canberra, ACT, Australia.
[7] Basmann, R.L. 1960. On finite sample distributions on generalized classical linear identifiability test statistics. Journal of the American Statistical Association, 55: 650-659. DOI:https://doi.org/10.2307/2281588
[8] Becken, S., Zammit, C., and Hendrikx, J. 2014. Developing climate change maps for tourism essential information or awareness rising. Journal of Travel Research, 54(4): 430-441. DOI:https://doi.org/10.1177/0047287514528286
[9] Blanco, G, et al. 2014. Chapter 5: Drivers, trends and mitigation’, In: Climate change 2014: Mitigation of Climate change, IPCC Working Group III Contribution to AR5. Cambridge University Press, Cambridge, UK and New York, NY, USA.
[10] Carey, K. 1991. Estimation of Caribbean Tourism Demand: Issuers and Methodology. Atlantic Economic Journal, 19(3): 32-40. DOI:https://doi.org/10.1007/BF02299101
[11] CEIC Data 2018. Coal consumption’, the Financial data and Economic Indicators, viewed 25 March 2019. Available at: https://www.ceicdata.com/en/indicator/coal-consumption.
[12] Crouch, G. 1994. The Study of International Tourism Demand: A Review of Findings. Journal of Travel Research, 33(1): 12-23. DOI:https://doi.org/10.1177/004728759403300102
[13] Deng, T., Li, X. and Ma, M. 2017. Evaluating impact of air pollution on China’s inbound tourism industry: a spatial econometric approach. Asia Pacific Journal of Tourism Research, 22(7): 771-780. DOI:https://doi.org/10.1080/10941665.2017.1331923
[14] Department for Transport 2003. The Future of Air Transport’, Department for Transport (DfT), viewed 12 May 2019, Available at: http://www.pleiade.org/projectzone/LOX/pdf/thefutureofairtransportwhite.pdf
[15] Environmental Protection Agency 2012. What are the six common air pollutants. United States Environmental Protection Agency (EPA), viewed 6th May 2019, Available at: https://www.epa.gov/criteria-air-pollutants
[16] Fereidouni, H.G., Al-Mulali, U. and Mohammed, M.A.H. 2014, ‘Wealth effect from real estate and outbound travel demand: the Malaysian case’, Current Issues in Tourism, 20(1): 68-79. DOI:https://doi.org/10.1080/13683500.2014.882886
[17] Gani, A. and Clements, M.D. 2016. The main determinants effecting international visitor arrivals in New Zealand: Some empirical evidence. Tourism Economics, 38(1): 1-20. DOI:https://doi.org/10.1177/1354816616656417
[18] Grey, P.H. 1996. The demand for international travel by the United States and Canada. International Economic Review, 7: 83-92. DOI:https://doi.org/10.2307/2525372
[19] Gunduz, L. and Hatemi-J, A. 2005. Is the tourism-led growth hypothesis valid for Turkey? Applied Economics Letters, 12: 499-504. DOI:https://doi.org/10.1080/13504850500109865
[20] Hausman, J.A. 1978. Specification Test in Econometrics. Econometrica, 46: 1251-1271. DOI:https://doi.org/10.2307/1913827
[21] Hoornweg, D. and Bhada-Tata, P. 2012, What a Waste: A Global Review of Solid Waste Management, Urban Development and Local Government Unit, The World Bank, no. 15.
[22] Howes, S. and Wyrwoll, P. 2012. Chapter 3 “Asia’s environmental problems: common features and possible solutions”, in Zhang, Y, Kimura, F and Oum, S (eds.), Moving toward a new development model for East Asia – the role of domestic policy and regional cooperation, ERIA Research Project Report 2011-10, Jakarta: ERIA, 55-120.
[23] International Energy Agency 2017. Southeast Asia Energy Outlook 2017. World Energy Outlook Special Report, IEA, viewed 6th May 2019. Available at: https://www.iea.org/publications/freepublications/publication/WEO2017SpecialReport_SoutheastAsiaEnergyOutlook.pdf.
[24] Law, R. and Cheung, C. 2007. Air quality in Hong Kong: A study of the perception of international visitors’, Journal of Sustainable Tourism, 15: 390-401. DOI: https://doi.org/10.2167/jost637.0
[25] Mervar, A. and Payne, J. 2007. An analysis of Foreign Tourism Demand for Croatian Destination: Long-run Elasticity Estimates. Working paper, 1-20. DOI: https://doi.org/10.5367/000000007781497764
[26] Min, C.K., Roh, T.S., and Bak, S. 2016. Growth effects of leisure tourism and the level of economic development. Applied Economics, 48: 7-17. DOI: https://doi.org/10.1080/00036846.2015.1073838
[27] Morley, C.L. 1994. The use of CPI for tourism prices in demand modeling. Tourism Management, 15(5): 342-346. DOI: https://doi.org/10.1016/0261-5177(94)90088-4
[28] Pang, S.F., McKercher, B., and Prideaux, B. 2013. Climate change and tourism: an overview. Asia Pacific Journal Tourism Research, 18(1-2): 4-20. DOI: https://doi.org/10.1080/10941665.2012.688509
[29] Pearl, J. 2014. Understanding Simpson’s Paradox. The American Statistician, Technical Report, 414. DOI: https://doi.org/10.1080/00031305.2014.876829
[30] Phakdisoth, L. and Kim, D. 2007. The Determinants of Inbound Tourism in Laos. ASEAN Economic Bulletin, 24(2): 225-237. DOI:https://doi.org/10.1353/ase.2007.0042
[31] Roodman, D. 2009. A Note on the Theme of Too Many Instruments. Oxford Bulletin of Economics and Statistics, 71(1): 135-158. DOI:https://doi.org/10.1111/j.1468-0084.2008.00542.x
[32] Sajjad, G., Noreen, U. and Zaman, K. 2014. Climate change and air pollution jointly creating nightmare for tourism industry’, Environmental Science and Pollution Research, 21(21): 12403 - 12418. DOI:https://doi.org/10.1007/s11356-014-3146-7
[33] Sargan, J.D. 1958. The estimation of economic relationships using instrumental variables. Econometrica, 26: 393-415. DOI:https://doi.org/10.2307/1907619
[34] Sinclair, M.T. 1998. Tourism and Economic Development: A Survey. Journal of Development Studies, 34(5): 1-51. DOI:https://doi.org/10.1080/00220389808422535
[35] Song, H., Dwyer, L. and Zheng Cao, G.L. 2012. Tourism economics research. Annals of Tourism Research, 39: 1653-1682. DOI:https://doi.org/10.1016/j.annals.2012.05.023
[36] The Association of Southeast Asian Nations 2015. the ASEAN Tourism Strategic Plan 2016-2025. The Philippine Department of Tourism, view 6th May 2019. Available at: https://www.asean.org/storage/2012/05/ATSP-2016-2025.pdf
[37] United Nations Children’s Fund 2016. Clear the air for children. United Nations Children’s Fund (UNICEF), New York, USA.
[38] United Nations Environment Programme 2011. Tourism: Investing in energy and resource efficiency’, United Nations Environment Programme (UNEP), viewed 12 May 2019, Available at: http://wedocs.unep.org/bitstream/handle/20.500.11822/22014/11.0_tourism.pdf?sequence=1&isAllowed=y
[39] United Nations Environment Programme 2019. Air Pollution in Asia and the Pacific: Science-based Solutions. United Nations Environment Programme (UNEP), Bangkok, Thailand.
[40] Wooldridge, J.M. 2012. Introductory Econometrics: A Modern Approach. Fifth Edition, Michigan State University, South Western, USA.
[41] World Bank 2013. World development indicators. The World Bank, Washington, DC, USA, viewed 20 March 2019. Available at: https://datacatalog.worldbank.org/
[42] World Tourism Organization 2018. International Tourism Highlights 2019 edition, World Tourism Organization (UNWTO), viewed 20th Nov 2019. Available at: https://www.e-unwto.org/doi/pdf/10.18111/9789284421152
[43] World Tourism Organization 2018. UNWTO Tourism Highlights. World Tourism Organization (UNWTO), viewed 12th May 2019. Available at: https://www.e-unwto.org/doi/pdf/10.18111/9789284419876
[44] World Travel and Tourism Council 2018. Travel & Tourism power and performance report. World Travel and Tourism Council (WTTC), viewed 12th May 2019. Available at: https://www.wttc.org/-/media/files/reports/2018/power-and-performance-rankings-2018.pdf
[45] World Travel and Tourism Council 2019. Travel & Tourism Economic Impacts 2019. World Travel and Tourism Council (WTTC), viewed 20th May 2019. Available at: https://www.wttc.org/-/media/files/reports/economic-impact-research/regions-2019/world2019.pdf
[46] Zellner, A. and Theil, H. 1962. Three-Stage Least Squares: Simultaneous Estimation of Simultaneous Equations. Econometrica, 30(1). DOI:https://doi.org/10.2307/1911287
[2] Akhmat, G., Zaman, K., Shukui, T., and Sajjad, F. 2014a. Does energy consumption contribute to climate change? Evidence from major regions of the world. Renewable and Sustainable Energy Reviews, 36: 123-134. DOI:https://doi.org/10.1016/j.rser.2014.04.044
[3] Akhmat, G., et al. 2014b. A contemporary landscape of air pollution and greenhouse gas emissions leads to inevitable phenomena of low birthweight. Environmental Science and Pollution Research, 21(15)> 9408-9414. DOI:https://doi.org/10.1007/s11356-014-2867-y
[4] Anderson, T.W. and Hsiao, C. 1981. Estimation of Dynamic Models with Error Components. Journal of the American Statistical Association, 76(375). DOI:https://doi.org/10.1080/01621459.1981.10477691
[5] Arah, O.A. 2008. The role of causal reasoning in understanding Simpson’s paradox, Lord’s paradox, and the suppression effect: covariate selection in the analysis of observational studies. Emerging Themes in Epidemiology, 5(1). DOI:https://doi.org/10.1186/1742-7622-5-5
[6] Australian Academy of Science 2015. The science of climate change: Questions and Answers. Australian Academy of Science, Canberra, ACT, Australia.
[7] Basmann, R.L. 1960. On finite sample distributions on generalized classical linear identifiability test statistics. Journal of the American Statistical Association, 55: 650-659. DOI:https://doi.org/10.2307/2281588
[8] Becken, S., Zammit, C., and Hendrikx, J. 2014. Developing climate change maps for tourism essential information or awareness rising. Journal of Travel Research, 54(4): 430-441. DOI:https://doi.org/10.1177/0047287514528286
[9] Blanco, G, et al. 2014. Chapter 5: Drivers, trends and mitigation’, In: Climate change 2014: Mitigation of Climate change, IPCC Working Group III Contribution to AR5. Cambridge University Press, Cambridge, UK and New York, NY, USA.
[10] Carey, K. 1991. Estimation of Caribbean Tourism Demand: Issuers and Methodology. Atlantic Economic Journal, 19(3): 32-40. DOI:https://doi.org/10.1007/BF02299101
[11] CEIC Data 2018. Coal consumption’, the Financial data and Economic Indicators, viewed 25 March 2019. Available at: https://www.ceicdata.com/en/indicator/coal-consumption.
[12] Crouch, G. 1994. The Study of International Tourism Demand: A Review of Findings. Journal of Travel Research, 33(1): 12-23. DOI:https://doi.org/10.1177/004728759403300102
[13] Deng, T., Li, X. and Ma, M. 2017. Evaluating impact of air pollution on China’s inbound tourism industry: a spatial econometric approach. Asia Pacific Journal of Tourism Research, 22(7): 771-780. DOI:https://doi.org/10.1080/10941665.2017.1331923
[14] Department for Transport 2003. The Future of Air Transport’, Department for Transport (DfT), viewed 12 May 2019, Available at: http://www.pleiade.org/projectzone/LOX/pdf/thefutureofairtransportwhite.pdf
[15] Environmental Protection Agency 2012. What are the six common air pollutants. United States Environmental Protection Agency (EPA), viewed 6th May 2019, Available at: https://www.epa.gov/criteria-air-pollutants
[16] Fereidouni, H.G., Al-Mulali, U. and Mohammed, M.A.H. 2014, ‘Wealth effect from real estate and outbound travel demand: the Malaysian case’, Current Issues in Tourism, 20(1): 68-79. DOI:https://doi.org/10.1080/13683500.2014.882886
[17] Gani, A. and Clements, M.D. 2016. The main determinants effecting international visitor arrivals in New Zealand: Some empirical evidence. Tourism Economics, 38(1): 1-20. DOI:https://doi.org/10.1177/1354816616656417
[18] Grey, P.H. 1996. The demand for international travel by the United States and Canada. International Economic Review, 7: 83-92. DOI:https://doi.org/10.2307/2525372
[19] Gunduz, L. and Hatemi-J, A. 2005. Is the tourism-led growth hypothesis valid for Turkey? Applied Economics Letters, 12: 499-504. DOI:https://doi.org/10.1080/13504850500109865
[20] Hausman, J.A. 1978. Specification Test in Econometrics. Econometrica, 46: 1251-1271. DOI:https://doi.org/10.2307/1913827
[21] Hoornweg, D. and Bhada-Tata, P. 2012, What a Waste: A Global Review of Solid Waste Management, Urban Development and Local Government Unit, The World Bank, no. 15.
[22] Howes, S. and Wyrwoll, P. 2012. Chapter 3 “Asia’s environmental problems: common features and possible solutions”, in Zhang, Y, Kimura, F and Oum, S (eds.), Moving toward a new development model for East Asia – the role of domestic policy and regional cooperation, ERIA Research Project Report 2011-10, Jakarta: ERIA, 55-120.
[23] International Energy Agency 2017. Southeast Asia Energy Outlook 2017. World Energy Outlook Special Report, IEA, viewed 6th May 2019. Available at: https://www.iea.org/publications/freepublications/publication/WEO2017SpecialReport_SoutheastAsiaEnergyOutlook.pdf.
[24] Law, R. and Cheung, C. 2007. Air quality in Hong Kong: A study of the perception of international visitors’, Journal of Sustainable Tourism, 15: 390-401. DOI: https://doi.org/10.2167/jost637.0
[25] Mervar, A. and Payne, J. 2007. An analysis of Foreign Tourism Demand for Croatian Destination: Long-run Elasticity Estimates. Working paper, 1-20. DOI: https://doi.org/10.5367/000000007781497764
[26] Min, C.K., Roh, T.S., and Bak, S. 2016. Growth effects of leisure tourism and the level of economic development. Applied Economics, 48: 7-17. DOI: https://doi.org/10.1080/00036846.2015.1073838
[27] Morley, C.L. 1994. The use of CPI for tourism prices in demand modeling. Tourism Management, 15(5): 342-346. DOI: https://doi.org/10.1016/0261-5177(94)90088-4
[28] Pang, S.F., McKercher, B., and Prideaux, B. 2013. Climate change and tourism: an overview. Asia Pacific Journal Tourism Research, 18(1-2): 4-20. DOI: https://doi.org/10.1080/10941665.2012.688509
[29] Pearl, J. 2014. Understanding Simpson’s Paradox. The American Statistician, Technical Report, 414. DOI: https://doi.org/10.1080/00031305.2014.876829
[30] Phakdisoth, L. and Kim, D. 2007. The Determinants of Inbound Tourism in Laos. ASEAN Economic Bulletin, 24(2): 225-237. DOI:https://doi.org/10.1353/ase.2007.0042
[31] Roodman, D. 2009. A Note on the Theme of Too Many Instruments. Oxford Bulletin of Economics and Statistics, 71(1): 135-158. DOI:https://doi.org/10.1111/j.1468-0084.2008.00542.x
[32] Sajjad, G., Noreen, U. and Zaman, K. 2014. Climate change and air pollution jointly creating nightmare for tourism industry’, Environmental Science and Pollution Research, 21(21): 12403 - 12418. DOI:https://doi.org/10.1007/s11356-014-3146-7
[33] Sargan, J.D. 1958. The estimation of economic relationships using instrumental variables. Econometrica, 26: 393-415. DOI:https://doi.org/10.2307/1907619
[34] Sinclair, M.T. 1998. Tourism and Economic Development: A Survey. Journal of Development Studies, 34(5): 1-51. DOI:https://doi.org/10.1080/00220389808422535
[35] Song, H., Dwyer, L. and Zheng Cao, G.L. 2012. Tourism economics research. Annals of Tourism Research, 39: 1653-1682. DOI:https://doi.org/10.1016/j.annals.2012.05.023
[36] The Association of Southeast Asian Nations 2015. the ASEAN Tourism Strategic Plan 2016-2025. The Philippine Department of Tourism, view 6th May 2019. Available at: https://www.asean.org/storage/2012/05/ATSP-2016-2025.pdf
[37] United Nations Children’s Fund 2016. Clear the air for children. United Nations Children’s Fund (UNICEF), New York, USA.
[38] United Nations Environment Programme 2011. Tourism: Investing in energy and resource efficiency’, United Nations Environment Programme (UNEP), viewed 12 May 2019, Available at: http://wedocs.unep.org/bitstream/handle/20.500.11822/22014/11.0_tourism.pdf?sequence=1&isAllowed=y
[39] United Nations Environment Programme 2019. Air Pollution in Asia and the Pacific: Science-based Solutions. United Nations Environment Programme (UNEP), Bangkok, Thailand.
[40] Wooldridge, J.M. 2012. Introductory Econometrics: A Modern Approach. Fifth Edition, Michigan State University, South Western, USA.
[41] World Bank 2013. World development indicators. The World Bank, Washington, DC, USA, viewed 20 March 2019. Available at: https://datacatalog.worldbank.org/
[42] World Tourism Organization 2018. International Tourism Highlights 2019 edition, World Tourism Organization (UNWTO), viewed 20th Nov 2019. Available at: https://www.e-unwto.org/doi/pdf/10.18111/9789284421152
[43] World Tourism Organization 2018. UNWTO Tourism Highlights. World Tourism Organization (UNWTO), viewed 12th May 2019. Available at: https://www.e-unwto.org/doi/pdf/10.18111/9789284419876
[44] World Travel and Tourism Council 2018. Travel & Tourism power and performance report. World Travel and Tourism Council (WTTC), viewed 12th May 2019. Available at: https://www.wttc.org/-/media/files/reports/2018/power-and-performance-rankings-2018.pdf
[45] World Travel and Tourism Council 2019. Travel & Tourism Economic Impacts 2019. World Travel and Tourism Council (WTTC), viewed 20th May 2019. Available at: https://www.wttc.org/-/media/files/reports/economic-impact-research/regions-2019/world2019.pdf
[46] Zellner, A. and Theil, H. 1962. Three-Stage Least Squares: Simultaneous Estimation of Simultaneous Equations. Econometrica, 30(1). DOI:https://doi.org/10.2307/1911287
Published
2020-02-21
How to Cite
NGUYEN, Thi Gam.
Impacts of Climate Change and Air Pollution on the Tourism Industry: Evidence from Southeast Asia.
Journal of Environmental Management and Tourism, [S.l.], v. 10, n. 8, p. 1711-1722, feb. 2020.
ISSN 2068-7729.
Available at: <https://journals.aserspublishing.eu/jemt/article/view/4381>. Date accessed: 04 nov. 2024.
doi: https://doi.org/10.14505//jemt.v10.8(40).01.
Section
Article
Copyright© 2024 The Author(s). Published by ASERS Publishing 2024. This is an open access article distributed under the terms of CC-BY 4.0 license.