Role of energy utilization intensity, technical development, economic openness, and foreign tourism in environmental sustainability

Since intensive energy utilization in open macro economies has posed severe environmental challenges, mitigation of climatic adversities can be substantiated by advancing the technical development of those economies. We attempt to empirically analyze the varying effects of energy utilization intensity, technical development, economic openness, and foreign tourism industry on environmental degradation across the development levels of Chinese provinces. We extend the following cutting-edge contributions to the existing knowledge: First, the energy utilization intensity, technical development, economic openness, and foreign tourism industry are included in the statistical and conceptual “Stochastic Impacts by Regression on Population, Affluence and Technology (STIRPAT)” framework. Second, the principal component analysis is employed on 30 Chinese provinces' data to calculate the multidimensional environmental degradation index. The long-run estimates are obtained by employing an advanced continuously-updated-bias-corrected technique (CUBCT). The core results are as follows: Energy utilization intensity displayed a positive and statistically significant impact on environmental degradation, with the greatest degree of impact captured for the highest development level provinces. Technical development inhibited environmental degradation, with the most intensive influence in highly developed provinces and the least intensive one in the least developed provinces. Economic openness and the foreign tourism industry manifested homogeneous inverse U-shape links with environmental degradation across the aggregate panels. However, both variables showed a diversified range of varying results across provincial units. Based on our results, we suggest complementing the energy efficiency promotion with energy conservation to avoid the energy rebound effect of technical development. Also, adjusting the energy structure to increase the share of renewables and mitigate that of fossil fuels are recommendable options. Besides, we emphasize the strengthening of trade in green products and the proliferation of sustainable tourism activities to achieve the Sustainable Development Goals of the United Nations.