Tourism openness and circular economy adoption: Pathways to environmental sustainability

This study examines the effects of tourism openness on climate change and circular economy outcomes within a Waste Kuznets Curve framework. Drawing on a newly compiled global panel dataset of circular economy indicators covering 64 countries over the period 1995–2022, we employ seemingly unrelated regression and dynamic panel data models to account for cross-equation dependence, persistence, and potential endogeneity. The results show that tourism openness, measured by tourism receipts and expenditures as a share of GDP, significantly promotes circular economy practices, supporting environmental sustainability. We further uncover a nonlinear relationship between income and recycling performance, whereby recycling rates initially decline with economic growth but increase once GDP per capita surpasses a threshold. While tourism openness contributes to improved circularity and partially offsets tourism-related environmental pressures, the findings indicate that gains in recycling alone are insufficient to achieve substantial climate change mitigation without complementary decarbonisation policies.