The Relationship between Tourism and Environmental Performance: The Case of Caspian Sea Nations

Transcription

1 Iranian Journal of Economic Studie Vol. 4, No. 2, Fall 2015, The Relationhip between Tourim and Environmental Performance: The Cae of Capian Sea Nation Saeed Raekhi Department of Economic, Faculty of Economic and Adminitrative Science, Univerity of Mazandaran, Babolar-Iran Soraya Mohammadi Department of Economic, Faculty of Economic and Adminitrative Science, Univerity of Mazandaran, Babolar-Iran Abtract Tourim i a multidimenional economic activity that ha an interaction with the environment. On one hand, environmental reource provide the raw material for tourim, while on the other, tourim impoe a variety of negative and poitive impact (wanted or unwanted) on the environment through the creation of variou by-product. The main purpoe of the current tudy i to invetigate the relationhip between tourim and environmental performance in the Capian Sea nation during A panel data vector autoregreive (P-VAR) method ha been employed to etimate the model. Finding from the impule-repone function analyi and variance decompoition how that the reaction of international tourim to environmental performance, human development index, gro dometic product (GDP) per capita, and the degree of trade openne in the Capian Sea nation are poitive. Moreover, the reaction of environmental performance to tourim and GDP per capita hock i negative. The reult alo how that the repone of environmental performance to human capital index, the degree of trade openne and the quare of GDP per capita hock are poitive. According to the finding, it i uggeted that countrie in the Capian Sea region hould pay a pecial attention to environmental iue in the development of tourim. Keyword: Tourim, Environmental Performance, The Capian Sea, Panel VAR. JEL Claification: F64, Q56, F18. Received: 21/1/2016 Accepted: 26/10/2016 The Correponding Author

2 Iranian Journal of Economic Studie, 4(2), Fall Introduction The diolution of former USSR in early 1990 and the end of the Cold War caued major development in geolocation of the world, epecially the Capian Sea nation. The Capian Sea ha a trategic importance becaue of it geographical location, rich upplie of oil and ga, and the newly independent tate. The five countrie located in thi region, having an overall population more than 245 million people, having acce to enormou reervoir of oil and ga, and benefitting from a privileged geographical location, are the center of global attention and a competing field for regional and world power. Such pecial tatu for the region ha provided uitable international potential. The Capian Sea bridge Iran and Ruia with Central Aia and Caucau; conequently, countrie located in the Perian Gulf, the Mediterranean Sea, and the Black Sea region, in addition to Pakitan and Afghanitan, could connect with each other and Europe more eaily. The Capian Sea i alo called the Pearl of Euraia becaue of it connecting function between Aia and Europe (Zeinolabedin et al., 2009). The combination of uch geographical factor ha provided an appropriate ground for invetment. The pecific condition of The Capian Sea, a the larget body of water in the world, ha alway been a challenge among cientit and technician. For decade, oil and ga indutrie have been involved in dicovering and drilling; food expert have praied caviar and it propertie, and thoe involved in ecological reource have valued the biological diverity in the ea and conidered it potential for continental tranportation and creation of job opportunitie with regard to marine food and tourim. Therefore, the Capian Sea i a ymbol of combined opportunitie in the regional and global level. Certainly, the Capian Sea i important and attractive not only for the regional countrie, but alo for many nation around the world (National Geological Databae 1, 2015). A multitude of factor target the environment urrounding the Capian Sea, each of which could lead to eroion. Thi might deprive nation to benefit from it reource or make uch a proce very expenive. Some of thee factor are generated from each other and might lead to conflict with goal and interet of countrie in the region and prevent them from being fulfilled. Although tourim could be conidered a the key or ecret for economy in the developed and the developing countrie, it impoe a great and immediate threat to the ecoytem of the Capian Sea. Therefore, though environment could defend itelf againt a certain level of pollution,

3 53 The Relationhip between Tourim and Environmental environmental diater tart when human being increae the amount of pollutant and overwhelm natural cleaning procee. Some expert believe that the major caue of marine pollution include lad-baed facilitie, drilling in the ea, dumping poionou wate, dumping atomic wate, hip, atmophere, and deep-ea drilling and dicovery. They alo believe that fluctuation in the ea level, biological iue (biological damage caued by the eroion of land and air pollution), ecological problem (change in land ue, epecially that of agricultural area or depreciation of aethetic and architecture), activitie related to oil drilling and indutry, watewater (agricultural or urban and dometic ewage near eahore), and the wate made by tourit are the major threatening factor againt the Capian Sea environment (Mola et al., 2012). Since long-term environmental problem could not be olved by the rapid application of technologie, permanent growth would be focued on by having an undertanding of the correlation between protecting the environment and economic growth. Tourim i defined a an indutry that i involved in leiure and travel (Cunha and Cunha, 2005) and ha turned into one of the fatet-growing ector of economy within the pat few year. Thi increae ha been o much that tourim ha been of great help to the economic growth of countrie and economic advantage of local communitie (Oman and Sentoa, 2013). According to the annual report iued by the World Tourim Organization (WTO, 2015), the number of traveler in 1980 wa only 227 million that reached 677 million in 2000 and 1133 million in In addition, international earning of tourim have increaed to $1245 billion. Such a number contitute 30 percent of global export and 6 percent of the overall global trade, reulting in a 9 percent growth in gro dometic production in the world. All thee tatitic and figure indicate the growing and fat trend in tourim indutry. Invetigation in the current tudy on the Capian Sea nation 2 during confirm thi trend, too. In thi regard, the report iued by WTTC 3 in 2015 indicate that the hare of tourim on etablihing new job opportunitie i 7.6 percent for Azerbaijan 4, 5.3 percent for Iran, 5.6 percent for Ruia, and 5.3 percent for Kazakhtan. In addition, the hare of tourim on gro dometic product of the Capian Sea nation ha been found a quite differing (8.4 percent for Azerbaijan, 6.3 percent for Iran, 6.0 percent for Ruia, and 5.6 percent for Kazakhtan) 5. Long-term economic ucce in tourim often require the maintenance of natural quality of the

4 Iranian Journal of Economic Studie, 4(2), Fall environment in order to fulfill tourit need (Holden, 2007). Since tourim ha been recognized a a very promiing financial upport in protected area, it could be concluded that earning made by it in uch area could change the perception of local communitie with regard to the environment (Sirivong and Tuchiya, 2012; Coad et al., 2008) and increae protection on the environment (Imran et al., 2014). The introduction of thi conception of tourim a a ytem etablihe a connection between the environment of target for tourim and local communitie. In thi manner, the unique environment of the Capian Sea ha etablihed appropriate condition for tourit, epecially eco-tourit. However, environmental and land-ue change in the Capian Sea for the purpoe of expanding tourim ha (directly and indirectly) detroyed natural habitat and degraded coatal area. In addition, unique ecological capabilitie together with it international pond, foret, river, animal, and plant have diminihed gradually. The population of ome pecie i decreaing fat and ome of them face the danger of extinction. Furthermore, deforetation, deertification, and reduction of fih reource becaue of illegal fihing practice are among the major problem in the region. Normally, expanion of tourim i accompanied by invetment, contruction, and etablihment of infratructure uch a hotel, accommodation center, villa, and road. However, unplanned contruction along the coatal line ha made detrimental impact uch a the lo of attractive natural cenerie, oil degradation, and environmental damage (Mola, et al., 2012). Countrie in the Capian Sea region are among the richet area with regard to energy reource and depend largely on the oil export. The region ha a particular geographical location (properou foret, rich agricultural land, and huge ubterranean and ea reource) and benefit from a high potential to attract tourit that could reduce vulnerabilitie caued by fluctuation in the price of oil and the ubequent problem ariing from a ingle-product economy. Nonethele, the region ha witneed horrible conequence of pollution in the coat and the environment during the pat few year in a way that according to the data provided by Yale Univerity, the index of environmental performance in the region ha been reported a 50 or lower, which could be attributed to tourim to ome extent. In addition, becaue of the importance of variety in the rich ecoytem of the Capian Sea including pond, foret, river, vat plain and prairie, and beautiful ea hore and river etuarie ha

5 55 The Relationhip between Tourim and Environmental created a great potential for ecotourim. Such ecotourim, if planned and managed meticulouly, would provide potentially ignificant ource of revenue and would be a proper tool for educating and raiing the concioune of intereted people, both within and outide the country. In pite of the preence of thi huge potential, tourim in the region i not properly planned yet and thee area are left without any proper ue ince there are no due plan and ervice. The mutual relation between environment and tourim i a reaon to invetigate the iue here and in thi regard, the et of elected countrie ha been choen meticulouly. In o doing, countrie located in the Capian Sea region have been choen to be invetigated in the current tudy. The current tudy attempted to anwer the following quetion: 1. I the reaction of tourim toward environmental performance poitive? 2. I the reaction of environment toward impule reulting from tourim indutry negative? It hould be mentioned that variou tudie have been conducted on the relationhip between tourim and environment; the mot notable one could be Raekhi et al. (2016) that ha attempted to invetigate the impact of tourim on environment for 55 developing and developed countrie by making ue of panel data. In that tudy, it wa found that the impact of tourim on the environment of developed and developing countrie were poitive and negative, repectively. Nonethele, the current tudy ha ome ditinguihing characteritic from the other tudie. Firt, baed on the literature in the economic and ocial tudie, it tudied the mutual interaction between tourim and environment imultaneouly. Second, it ha ued the auto regreion model in the form of panel data (P-VAR). In addition, none of the previou tudie ha invetigated the Capian Sea region, while the current tudy ha invetigated the relationhip between tourim and environmental performance in The Capian Sea nation during Specifically, the hypothee in the current tudy included the following: 1. Tourim ha poitive a reaction toward the environment. 2. The environment ha a negative reaction toward tourim. Table 1 ummarized the related experimental tudie.

6 Iranian Journal of Economic Studie, 4(2), Fall Table 1. Summary of Experimental Studie on the Relationhip Between Tourim and the Environment Title Authreor Etimation Study Method Area Major Finding By uing a multivariate vector Jatuporn Thailand autogreive and (January (VAR) model Chien 1986 to and generalized (2011) May 2010) variance decompoition (VDC) Tourim Development V CO 2 Emiion in Thailand Co 2 emiion and international tourim in ome developed countrie Exploring the relationhip between tourim development indicator and carbon emiion A tudy of the relationhip between carbon emiion and tourim development in Maldive. The Dynamic Linkage between CO 2 emiion, Economic Growth, Nademi (2011) Zaman et al. (2011) Amzath and Zhao (2014) Ben Jebli et al. (2014) By uing panel data analyi ( ) By employing co-integration and Granger Cauality tet By uing Ordinary Leat quare Method By uing cointegration tet and Granger cauality panel on panel data Selected developed countrie Pakitan ( ) Maldive ( ) South America ( ) Tourim development increae the conumption of energy and CO 2 emiion through tranportation and economic activitie. The reult alo howed that tranport ector ha a trong relative hock on CO 2 emiion through the time prediction. The impact of CO 2 emiion toward international tourim in a few Developed Countrie are ignificantly negative uggeting that policymaking i crucial in order to reduce the pollution level. The reult indicated a bi-directional relationhip between tourim indicator and Carbon emiion. Regreion reult howed a very ignificant poitive correlation between tourim development indicator and carbon emiion. The relationhip between carbon emiion and tourim development how very directional poitive relationhip In the long term, a mutual caual relationhip exit between the number of tourim, conumption of renewable energie, and CO 2 emiion. In other word, tourim and conumption of renewable

7 57 The Relationhip between Tourim and Environmental Title Renewable Energy Conumption, Number of Tourit Arrival and Trade International tourim, energy conumption, and environmental pollution: The cae of Turkey Etimating touriminduced energy conumption and CO 2 emiion Tourim Expenditure and Environment in Thailand Tourit arrival and macroeconomi c determinant of CO2 emiion Authreor Katircioğ lu (2014) Katircioğ lu et al. (2014) Somphol krang (2014) Solarin (2014) Etimation Method By uing the Model (ARDL-ECM) By uing Error Correction Model (ECM) and Granger cauality by the ue of VAR model and Granger cauality tet Uing panel cointegration and cauality tet Study Area Turkey ( ) Cypru ( ) Thailand ( ) Malayia ( ) Major Finding energie lead to reduction in CO 2 emiion, while economic growth and trade caue it increae. The reaction of energy conumption, and CO 2 emiion, to tourim development i poitive. Thi implie that tourim development ha reulted not only in coniderable increae in energy ue but alo increae in climate change, a demontrated by the econometric analyi. Reult revealed that international tourim i in a long-run equilibrium relationhip with energy conumption and CO 2 emiion. International tourim wa found to be a catalyt for energy conumption and for an increae in the level of CO 2. A direct, mutual, and caual relationhip exit between major apect of the environment (CO 2 emiion reulting from tranportation, need for energy, and water conumption) and cot of tourim. Long-term, poitive, and one-way relationhip exit between environmental pollution on one hand and tourim, gro dometic production, energy conumption, urbanization and financial growth on the other.

8 Iranian Journal of Economic Studie, 4(2), Fall Title Caual Interaction Between Co 2 Emiion, Financial Development, Energy and Tourim Environmental Impact of Tourim Tourim and CO 2 emiion nexu in Southeat Aia: new evidence from panel etimation Authreor Başarir and Çakir (2015) Raekhi et al. (2016) Sherafati an- Jahromi et al. (2016) Etimation Method Uing unit root tet, cointegration and cauality panel Uing panel data Method Uing the panel cointegration and pooled mean group technique Study Area Turkey and four European Union countrie ( ) Selected Developing and Developed Countrie ( ) the five mot important countrie located in Southeat Aia ( ) Major Finding There were tatitically ignificant feedback effect between the variable. The cauality analyi how uni-directional caual relationhip between the tourit arrival and financial development. Alo there wa a bi-directional cauality relationhip between CO 2 emiion, financial development, and energy and tourit arrival. The reult indicate that the impact of tourim on the environmental performance i poitive for developed countrie, while the effect i negative in developing countrie. The other reult of thi tudy how that energy intenity, the urban population, the Indutry, value added and the Population denity have a negative and ignificant effect on the environment while the human development index and the degree of trade openne have a poitive impact on environmental performance. The reult indicate that the nonlinear relationhip between tourim and emiion a well a economic activitie and CO 2 emiion. Accordingly, an inverted U-haped relationhip exit between tourim and emiion confirming the exitence of an Environmental Kuznet Curve in the Southeat Aian tourim indutry.

9 59 The Relationhip between Tourim and Environmental Title Tourim development, energy conumption and Environmental Kuznet Curve: Trivariate analyi in the panel of developed and developing countrie. Authreor Zaman et al. (2016) Etimation Method The tudy ued the principal component Analyi (PCA) to contruct tourim development index and twotage leat quare panel Study Area Eat Aia & Pacific, European Union and High income OECD and Non- OECD countrie ( ) Major Finding The reult validated the inverted U- haped relationhip between carbon emiion and per capita income in the region. The reult further ubtantiated the following caual relationhip tourim-induced carbon emiion, energy-induced emiion, invetment e induced emiion, growth led tourim, invetment led tourim and health led tourim development in the region. The tudy ha been organized in the following manner: Firt, an introduction ha been preented. Then, the theoretical foundation of the tudy have been dealt with, while the third ection involve an etimation of the model and data analyi. Preentation of the experimental reult, concluion and uggetion for policy-maker have been made at ection four and five. Reference have been preented at the end of the article. 2. Review of Literature Expanion of tourim and the arrival of tourit have caued numerou economic, ocio-cultural, and environmental impact on the target area. Therefore, within the pat few decade, the number of tudie on tourim ha been increaed. Depite thi, it eem that a comprehenive and coherent theoretical foundation doe not exit for the relationhip between expanion of tourim and the environment (epecially with regard to economic), though variou viewpoint on the relationhip between tourim and environment could be mentioned within the framework of contemporary theorie. Attention to the importance of tourim and environmental quality could be traced back to the tudy publihed in 2002 by Kort, et al. (Zaman et al., 2016). No matter what form of indutrial development occur, it would definitely have impact upon the phyical environment where it ha happened. Regarding the fact that tourit mut ee the production place to

10 Iranian Journal of Economic Studie, 4(2), Fall make ue of the output, it i an inevitable point that tourim i related to the environmental impact (Cooper et al., 1998). The relationhip between environment and tourim implicate complex interaction and could be decribed a a mutual relationhip. Tang (2015) argue that undertanding the relationhip between tourim and the environment i important becaue of the complex interaction of the environmental impact ariing from tourim. Holden (2007) believe that tourim would not be attained without having an undertanding of the natural attraction in the detination environment. Brida and Pereyra (2009) argue that a mutual dependency exit between higher hare of tourim and the environmental quality. In other word, on one hand tourim indutry and all other economic practice impact the environment directly, leading to the invetment of thoe intereted in tourim in the quality of the environment and utainable ue of local reource. On the other hand, tourim i dependent on the natural environment o much that the quality of environment in the target area i one the major factor for demand of tourim. Finding of many tudie (e.g., Clewer et al., 1992; Sinclair and Stabler, 1997; Huyber and Bennett, 2000) how that the quality of environment i important for tourit in a way that they are willing to pay more money to viit a high-quality environment. Studie uch a Sekhar (2003), Novelli and Scarth (2007) and Campbell et al. (2013) indicate that economic motive increae people motivation in order to protect the environment, epecially in remote area. In addition, McKercher (1993) argue that the environment i a fundamental element of the tourim experience. Tourit eek out attractive, different, or ditinctive environment that might upport pecific touritic activitie. At the ame time, however, tourim i reource-hungry; the development and practice of tourim conume reource, create wate, and require ignificant infratructural development (Sharpley, 2009). Lee and Brahmaerene (2013) argue that the tourim indutry i no longer regarded a a mokele indutry accompanying the improvement of environmental concioune. Tourim often involve travel and accommodation, which rely on foil fuel for the tranportation of tourit to and from a well a within detination and for hoting tourit. Depite thi impact, climate change ignificantly affect the tourim indutry, mot importantly due to it effect on the attractivene of tourim detination and tourit flow (Amelung, et al. 2007; Lie and Tol, 2002).

11 61 The Relationhip between Tourim and Environmental In addition, tourim depend on natural reource uch a water, coatline, landcape, and biodiverity which influence the potential attraction of tourim detination (Yazdanpanah, et al., 2016). Goudie and Vile (1997) argue that tourim could drive the detruction of environment. Therefore, ome cholar (e.g., Hall, 1998; Boyra, 2009; Dodd and Butler, 2009; Zhong et al., 2011) point out that environmental degradation generated by tourim development along with a lack of pecialized and integrated management for the preervation of natural reource bring about economic decline to many tourim detination. A mentioned in Ryan (2003), the environment i uually conidered a a major element of tourim. Fundamentally, all apect of tourim involve thi. Nonethele, the natural environment i quite delicate and require pecial care, while in fact, it help tourim through it natural feature firthand. A a reult, tourim itelf ha become an increaingly complex phenomenon on one hand, having political, economic, ocial, cultural, educational, bio-phyical, ecological and aethetic dimenion while on the other, natural environment, cultural heritage, and their diveritie are major attraction that tourim could offer. The attainment of proper and deirable correlation between tourim and environment or between the potentially conflicting expectation and apiration of viitor and hot or local communitie could create many challenge and opportunitie (Farajirad and Aghajan, 2010). Law (1991) theorize that the advantage of interpreting tourim a a ytem i that it avoid a one-dimenional thinking tyle and facilitate a multidiciplinary perpective. In addition, Urry (1995) argue that a tourit goal i viiting a pecial environment, one that ha a ocial tructure and cultural attraction. Urry believe that ocial, cultural, and environmental change could alter the perception of what i conidered the favorable cenery. Göling (2002) believe that tourim act a a major player in global change of the environment and i affected itelf. According to Sompholkrang (2014), tourim affect and i affected by the environment both directly and indirectly. Firt (and pecifically), environment i conidered a an attraction and a product of tourim. If the detination i crowded becaue of increaed number of dometic and international tourit, the environment i at rik and tourit might chooe other mode of travel. In addition, tourim expanion lead to increaed demand on

12 Iranian Journal of Economic Studie, 4(2), Fall water and ewage facilitie. Furthermore, tourit ruh lead to noie pollution, eroion of river bank, crowdedne, heavy traffic and the related type of pollution, etc. Therefore, tourim could play a major role in the protection of natural habitat and wildlife againt variou detructive form of development (e.g., mining) or prevent other damaging form of human activitie (e.g., illegal hunting) through the earning made by tourit viit. 3. Model Specification and Data Decription Becaue of it multiple advantage and with regard to the limitation inherent in time-erie model to be applied for hort-term period (uch a tatitical limitation and uncertainty on whether a variable i endogenou or exogenou), the panel-var data method could eliminate thee concern by implementing an auto-regreion model. The panel- VAR data method include the traditional VAR approach, though here, panel data are being ued. Uing thi method, the relationhip between the dependent variable and the previou value of other variable could be explained and evaluation of the impact of hock on endogenou variable could be invetigated. Thi method ha been implemented in the current tudy in congruence with the topic being invetigated and the literature (e.g., Gromann et al., 2014; Jawadi et al., 2016). In addition, the above ytem ha been tructured in a way that each one of the two variable could influence the other. In it general form, the model i illutrated a follow: Y Γ Γ L Y ϑ d ε i 1,,N t 1,, T 1 where Y, i a vector of endogenou variable, Γ i a vector of contant, Γ L i a matrix polynomial in the lag operator, ϑ are country pecific fixed effect, d are country pecific time effect, and ε i a vector of error term. Y include everal variable uch a Tourim (the number of arrival tourit), EPI (Environmental Performance Index), HDI (Human Development Index), GDP (Gro Dometic Production per capita), GDP (quare of GDP per capita), and OPEN (the degree of trade openne). The election of variable in the model ha been baed on the theoretical foundation propoed in the tudie conducted by ome reearcher uch a Lee and Brahmaerene (2013), Katirciog lu (2014), and Alam et al. (2011). Since the mixed environmental index of the Yale intitute of environmental policie and regulation ummarize environmental

13 63 The Relationhip between Tourim and Environmental condition and according to it invetigation, the mentioned index ha coniderable advantage compared with the ingular indice of pollution, the environmental performance index (EPI) ha been invetigated a the dependent variable in the current tudy. It hould be mentioned that according to the theoretical foundation preented in the tudy, the relationhip between tourim and environment i complex and i baed on a mutual coexitence. Particularly, thi relationhip uch that in it, the reearcher benefit from the high-quality environment and in repone, ha a reponibility toward the environment and hould conduct action in order to protect and maintain environmental value. Neverthele, if tourim i not accompanied by proper planning and execution, detruction of natural reource and attraction would happen. One of the influential factor on tourim and environmental performance i human development index (HDI). Through economic, ocial, and cultural (education, health, and ecurity) development, human development index attract and increae the number of tourit (Croe, 2012; Mehrgan et al., 2012; Muai et al., 2011). In addition, thi index, a one of the indice of development, could lead to the protection of the environment through enhancing the quality of life (Samimi et al., 2011; Gürlük, 2009; Alam et al., 2011). Furthermore, economic growth caue the expanion of tourim through the development of facilitie and infratructure for tourim uch a accommodation center, tranportation ytem and road, and development of facilitie for entertainment and welfare (Katircioğlu, 2009; Payne and Mervar, 2010; Corté-Jiménez et al., 2011; Bouzahzah and Menyari, 2013). In 1955, Kuznet proved that a Downward U-haped relationhip exit between income per capita and inequality in income. The equation between economic growth and indice related to pollution and quality of environment i well known a Environmental Kuznet Curve (EKC). What i meant by thi equation i that in the earlier year of economic growth, the amount of environmental degradation increae, though the environmental condition improve after a certain level of growth i attained. In other word, the rate of detruction impoed on the environment decreae at higher level of economic growth (Stern et al., 1996; Cole, 2004; Peng and Bao, 2006; Awan and Awan, 2013; Tugcu, 2014; Conrad and Caar, 2014; Wolde, 2015). Therefore, although the economic growth i the main objective of many economic policie in government, rapid economic growth impoe eriou harm againt the

14 Iranian Journal of Economic Studie, 4(2), Fall environment (becaue of the increaed ue of natural reource and emiion of greater volume of pollutant) (Salahuddin et al., 2015; Zhang and Gao, 2016). Therefore, a potential contrat exit between policie of economic growth and environmental condition. Some other reearcher (e.g., Beckerman, 1992; Zhang et al., 2008; Yang et al., 2012), on the other hand, believe that economic growth i eential in order to have a healthier environment and eradicate poverty. Furthermore, open trade could be conidered an important catalyt for the development of tourim indutry, in a way that high level of open trade could increae acce to market and ervice in area uch a tourim. In addition, open trade ha poitive impact on international activitie and trade corporation (Keintz, 1968; Turner and Witt, 2001). Furthermore, making trade free through increaing competition accompanied by the reduction of price for dometic product, increaed quality, and higher variability could lead to development and growth in the tourim indutry within the detination countrie (Summer and Heton, 1991; Dwyer, et al., 2000; Gooroochurn and Sugiyarto, 2004). With regard to the impact of trade openne on the environment, two differing viewpoint exit. The firt i that trade openne ha a negative impact on the environment through the tranfer of pollutant indutrie to countrie that have le trict environmental regulation (Talberth and Bohara, 2006; Halicioglu, 2009; Tamazian and Rao, 2010). According to the econd viewpoint, with regard to the reaction made by countrie to the competitive force ariing from open trade and the availability of relative advantage, they attempt to make ue of efficient reource; therefore, wate of reource and energy, together with their reulting pollution, i reduced (Munainghe, 1993; Zhang, 2007; Alam et al., 2011; Shahbaz et al., 2013). Definition and manner of meauring variable in the current tudy have been ummarized in Table 2. Table 2. Definition and Meaurement of Variable Ued in the Current Study Variable Symbol Decription Data Source Tourim TOUR The number of arrival World Bank tourit (2015) Environment EPI Environmental Yale Center performance index (2015) HDI HDI Human Development UNDP 6 Index (2015)

15 65 The Relationhip between Tourim and Environmental Variable GDP GDP^2 Degree of economic openne Symbol GDP GDP2 OPEN Decription GDP per capita The econd potential GDP per capita The overall export and import on GDP Data Source UNCTAD (2015) UNCTAD (2015) World Bank (2015) Decriptive tatitic related to the reearch variable have been preented in Table 3. Table 3. Decriptive Statitic of the Major Variable in the Current Study for the Capian Sea Nation During TOUR Country Mean (number of EPI HDI GDP (Dollar) OPEN tourit) Ruian E+08 Azerbaijan Iran E+10 Kazakhtan E+08 Turkmenitan Mean E+10 Median E+08 Maximum E+10 Minimum Std. Dev E+10 It i dicernible in Table 3 that on average, countrie with the greatet number of tourit have experienced the leat quality of the environment. Neverthele, by having a federal plan titled the development of dometic and inbound tourim, Ruia ha witneed the highet number of tourit and the highet indice of environmental performance, human development, and income per capita.

16 Iranian Journal of Economic Studie, 4(2), Fall EPI Capian Sea TOUR Growth Epi Growth Tour Figure 1. Development of Tourim and Environmental Performance Index for the Capian Sea Nation During The intuitive relationhip between growth in tourim and growth in environmental performance index ha been illutrated in Figure 1. According to thi figure, growth in tourim index of countrie invetigated in the tudy i not congruent with their environmental performance index. Although no clear and particularly ignificant relationhip could be oberved between tourim and environmental performance index in thee countrie, careful examination of the reearch hypothee require the evaluation of the reearch model (conducted in the next ection). 4. Empirical Reult In order to tart etimating the model, firt it i neceary to examine the tationarity of all variable in the model of panel data. Non-tationarity of variable, whether in time-erie or in panel data, would reult in problem uch a puriou regreion. Finding of the unit root tet obtained by the application of LLC method are preented in Table 3. According to Baltagi (2005), LLC tet ha a comparative advantage in limited time-erie data over other imilar method with regard to examining the tationarity of panel data. Table 4. Unit Root Tet Uing the LLC Method Variable Tet Statitic P-Value TOUR EPI HDI GDP GDP OPEN Source: Author calculation

17 67 The Relationhip between Tourim and Environmental According to Table 4, P value have been etimated le than 5 percent. Therefore, null hypothei of the tudy (tating that a unit root exit for the variable) i rejected and all the variable conidered in the tudy are tationary according to LLC tet (I(0)). After the tationarity of the variable i confirmed, Panel VAR ha been etimated for The Capian Sea nation. In addition, dynamic mutual influence reulting from the created hock have been tudied by the application of impule repone function and the variance decompoition. In the variance decompoition, the hare of hocked impoed againt the variou variable within the model i pecified in the forecat error variance of a variable. The impule repone function how the dynamic behavior of variable in the time of impoing a hock equal to one tandard deviation. In addition, by the ue of impule repone function, dynamic repone of the model againt the hock impoed from each one of the variable could be calculated. By applying a program deigned by Love and Zicchino (2006) in Stata, the auto-regreion model of panel ha been etimated through the application of fixed effect. Impule repone function for the Capian Sea nation have been hown in Figure 2. Impule-repone for 1 lag VAR of tour epi hdi gdp gdp2 open 1.2e+06 (p 5) tour tour (p 95) tour 5.7e+05 (p 5) epi epi (p 95) epi 3.3e+05 (p 5) hdi hdi (p 95) hdi 1.4e+05 (p 5) gdp gdp (p 95) gdp 2.9e+05 (p 5) gdp2 gdp2 (p 95) gdp2 4.8e+05 (p 5) open open (p 95) open -2.0e e e e e+04 repone of tour to tour hock repone of tour to epi hock repone of tour to hdi hock repone of tour to gdp hock repone of tour to gdp2 hock (p 5) tour tour (p 5) epi epi (p 5) hdi hdi (p 5) gdp gdp (p 5) gdp2 gdp2 (p 95) tour (p 95) epi (p 95) hdi (p 95) gdp (p 95) gdp repone of tour to open hock (p 5) open open (p 95) open repone of epi to tour hock repone of epi to epi hock repone of epi to hdi hock repone of epi to gdp hock repone of epi to gdp2 hock repone of epi to open hock (p 5) tour tour (p 95) tour (p 5) epi epi (p 95) epi (p 5) hdi hdi (p 95) hdi (p 5) gdp gdp (p 95) gdp (p 5) gdp2 gdp2 (p 95) gdp2 (p 5) open open (p 95) open repone of hdi to tour hock repone of hdi to epi hock (p 5) tour tour (p 5) epi epi (p 95) tour (p 95) epi repone of hdi to hdi hock repone of hdi to gdp hock (p 5) hdi hdi (p 5) gdp gdp (p 95) hdi (p 95) gdp repone of hdi to gdp2 hock repone of hdi to open hock (p 5) gdp2 gdp2 (p 5) open open (p 95) gdp2 (p 95) open e+02 repone of gdp to tour hock (p 5) tour tour (p 95) tour 1.8e repone of gdp to epi hock repone of gdp to hdi hock (p 5) epi epi (p 5) hdi hdi (p 95) epi (p 95) hdi 3.3e e repone of gdp to gdp hock repone of gdp to gdp2 hock repone of gdp to open hock (p 5) gdp gdp (p 5) gdp2 gdp2 (p 5) open open (p 95) gdp (p 95) gdp2 (p 95) open 1.4e e e e+06 repone of gdp2 to tour hock (p 5) tour tour (p 95) tour 7.1e e+05 repone of gdp2 to epi hock repone of gdp2 to hdi hock (p 5) epi epi (p 5) hdi hdi (p 95) epi (p 95) hdi 2.9e e e e+05 repone of gdp2 to gdp hock repone of gdp2 to gdp2 hock repone of gdp2 to open hock (p 5) gdp gdp (p 5) gdp2 gdp2 (p 5) open open (p 95) gdp (p 95) gdp2 (p 95) open 8.0e e e e+08 repone of open to tour hock -1.0e+09 repone of open to epi hock -6.2e+08 repone of open to hdi hock repone of open to gdp hock -6.4e+08 repone of open to gdp2 hock Error are 5% on each ide generated by Monte-Carlo with 500 rep repone of open to open hock Figure 2. Impule Repone Function for the Capian Sea Nation Source: Author calculation

18 Iranian Journal of Economic Studie, 4(2), Fall From the Figure 2, it could be concluded that the tourim ha a poitive reaction toward environment in the Capian Sea countrie, thi poitive reaction indicate that the higher the quality of environment within a country, the more it would be attractive for the tourit and thi would reult in more developed tourim indutry. Thi finding for the cae of the Capian Sea nation i in line with finding of Urry (1995), Law (1991), and Holden (2007) on the poitive impact of environmental performance on tourim. Specifically, tourit deire to be in a clean nature and environment. Therefore, it could be predicted that environment of higher quality would bring about the tourim indutry expanion. The reaction of tourim to human development index wa found to be poitive; in a way that the higher the level of human development in a country, the more tourit could be attracted. The literature in the field confirm the poitive impact of human development index on tourim (e.g., Mehrgan et al., 2012; Muai et al., 2011). The reaction of tourim to the impule ariing from gro dometic product per capita wa found to be poitive, too; thi ha been confirmed in tudie conducted by Katircioglu (2009), Payne and Mervar (2010), Corté-Jiménez et al. (2011), and Bouzahzah and Menyari (2013). Thi mean that gro dometic product ha been able to act a a force in the development of tourim and intigate the development of other ervice ection through the development of facilitie and infratructure. Figure 2 how that the reaction of tourim againt trade openne within the Capian Sea countrie i poitive. Thi mean that trade openne could potentially caue the arrival of a flow of international tourit through the buine of travel (an integral part of tourim), reduction in price, improvement in quality, and the creation of variety in product. The poitive impact of trade openne on tourim i in line with tudie performed by Summer and Heton (1991), Dwyer et al. (2000), and Gooroochurn and Sugiyarto (2004). Reult with regard to the negative impact of tourim on environmental performance are in line with tudie uch a Law (1991), Goudie and Vile (1997). Specifically, in the Capian Sea nation, tourim ha had negative impact on the environment becaue of uch reaon a the lack of a comprehenive and agreed-upon legal regime, lack of eriou determination with regard to the environmental iue, addreing private matter intead of public one, lack of environmental awarene, and improper management of reource. Therefore, the environment would face eriou damage without proper

19 69 The Relationhip between Tourim and Environmental planning for tourim (e.g. dumping wate related to the development of tourim). A the Helingborg tatement on utainable tourim (2007) indicate, unplanned and uncontrolled tourim lead to the detruction of tourim (Göling et al., 2008). It i further mentioned that the key goal in planning for tourim i the control over model of phyical development and protection of environmental reource. The reaction of tourim to human development index wa found to be poitive; ince education and awarene are two of the major indicator of human development, ignificant improvement in public awarene regarding the conequence of environmental damage could enhance the improvement of environmental performance index. A could be een in the Capian Sea nation, the reaction of environmental performance index to GDP per capita (a a criterion to indicate economic growth) i negative, while thi reaction to the quare of GDP per capita i poitive. For thi reaon, in it initial tep toward development, an economy make huge ue of environmental privilege; conequently, increae in production lead to the deterioration of environmental performance index. However, after a proper level of welfare ha been attained, environmental product turn into luxurie becaue of being carce and increae in income per capita. Therefore, the exitence of a U-haped Kuznet environmental curve between GDP per capita and environmental performance i confirmed. The reaction of environmental performance index to the impule ariing from the degree of trade openne in the cae of the Capian Sea nation wa found to be poitive ince advocate of free trade believe it allow countrie to pecialize in the production of good and ervice in which they have a relative advantage and maximize their production according to pecific level of energy and material through the allocation and conumption of reource in a more proper way. Thi argument emphaized the potential of trade openne to increae financial reource acceible to protect the environment through preenting motive to enhance production capacity. The poitive impact of trade openne on the environment i in line with the finding of the tudie uch a Munainghe (1993), Zhang (2007), Alam et al. (2011), and Shahbaz et al. (2013). Here, the hare and relative importance of the impact related to the impule of a variable on change in other variable ha been etimated by the ue of Variance Decompoition. Impule within the auto-regreion model, being organized by the application of Choleky Decompoition,

20 Iranian Journal of Economic Studie, 4(2), Fall indicate that the variable that appear ooner would be exogenou. Finding for the analyi of variance over the variable in the Capian Sea nation are preented in Table 5. Table 5. Analyi of Variance for the Selected Countrie in the Capian Sea During Variable S TOUR EPI HDI GDP GDP2 OPEN TOURE EPI HDI GDP GDP2 OPEN TOUR EPI HDI GDP GDP2 OPEN TOURE EPI HDI GDP GDP OPEN Source: Author calculation According to the Table 5, it could be oberved that in the long-term period (10 year), the highet hare of fluctuation in the tourim ector could be accounted for by the hock ariing from the tourim itelf, while hock ariing from the index of trade openne are in the econd place in thi regard. In other word, the econd mot important influence on tourim come from trade openne index. In addition, finding in Table 5 indicate

21 71 The Relationhip between Tourim and Environmental that, in the long-term bai, the majority of the fluctuation in environmental performance index could be accounted for by hock in the variable itelf. Next to that, the highet hare of environmental performance index could be accounted for by tourim. Thu, environment in the Capian Sea region i influenced a lot by tourim, in a way that the rapid and unplanned development in tourim ector caue evere degradation in the environment. Therefore, lack of proper planning, mimanagement of tourim activitie, and lack of environmental awarene lead to the detruction of environment in the region. Finding preented in Table 5 for the econd and third 10-year period how a imilar trend. Therefore, with regard to the impule repone function and the analyi of variance, the firt and the econd hypothee in the tudy (the poitive reaction of tourim toward the environment and the negative reaction of environmental performance index to tourim in the Capian Sea nation) are confirmed. 5. Summary and Concluion The current tudy aimed at invetigating the relationhip between tourim and environment performance. For thi purpoe, five the Capian Sea nation were conidered for invetigation during and were tudied by the application of vector auto-regreive model in the form of panel data. Then, hypothee 1 and 2, related to the poitive reaction of tourim toward environmental performance and the negative reaction of environment toward tourim were examined. According to the obtained reult, the reaction of tourim and environment to human development index wa found to be poitive. Thu, countrie can develop their tourim indutry and heighten the quality of their environment through the enhancement of human development index a an indicator of development (of any kind) in human affair. The effect of GDP per capita and it quare on tourim wa found to be poitive. Thu, tourim indutry could be aited through the application of GDP per capita a a criterion of economic growth. The negative impact of GDP per capita and the poitive impact of it quare on the environmental performance in the Capian Sea nation indicate that in the initial tage of production, increaed production ha led to the deterioration of environmental performance becaue of low awarene with regard to environmental problem and lack of acce to environment-friendly technologie. However, after a certain level of production wa achieved,

22 Iranian Journal of Economic Studie, 4(2), Fall countrie have enhanced the tatu of the environment through executing environmental policie in order to upport green technologie. Thu, Kuznet environmental hypothei regarding the preence of a U-haped relationhip between the environmental performance index and income product per capita i confirmed. In addition, the reaction of tourim and environmental performance index to the degree of trade openne wa found to be poitive. In thi regard, the countrie invetigated in thi tudy could enhance their tourim indutry and the quality of environment through etablihing trade openne policie. In addition, the reaction of tourim to environmental performance wa found to be poitive, while the reaction of environmental performance in the Capian Sea nation to tourim wa found to be negative. Nonethele, the approach taken by the World Tourim Organization put emphai on the maintenance of environmental diverity and integrity, fulfillment of baic human need, protection of reource to be ued by future generation, and reduction of injutice. If utainable development i one of the objective goal in the current era of tourim, it i of great importance, then, to evaluate the economic, cultural, and environmental performance and impact of tourim in tourim detination. Neverthele, no comprehenive tudy ha been conducted on the relationhip between tourim and environment and no ecotourim management ha been implemented, conequently. Within the framework of the finding of thi tudy, it i uggeted that regional environmental policie be taken into pecial conideration a plan for the development of phyical attraction are deigned and executed. Endnote The name of the elected countrie are preented in the Appendix1. 3. World Travel and Tourim Council (WTTC) 4. All value are in contant 2014 price and exchange rate 5. No figure have been mentioned for Turkmenitan and Tajikitan in the report. 6. United Nation Development Program (UNDP) Reference Alam, S., Rehman, S., & Butt, M. S. (2011). Trade liberalization, environmental degradation and utainable development in Pakitan. European Journal of Social Science, 19(1), Amelung, B., Nicholl, S., & Viner, D. (2007). Implication of global climate change for tourim flow and eaonality. Journal of Travel

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