This study investigates the mediating role of environmental taxes in the relationship between climate change and international tourism, while examining heterogeneity across global income groups. Using a balanced panel of 214 countries from 2015 to 2024, the analysis applies a Generalized Structural Equation Model (GSEM) and validates findings through a Praise–Winsten regression as a robustness check. Results indicate that climate change negatively impacts global tourism performance (international arrivals and receipts), though the magnitude of impact varies by income groups: highest in low-income economies and lowest in high-income countries. Also, environmental tax mediates the climate change-tourism relationship, channelling the negative impact in low-income economies, and yielding positive adaptive effects in high-income countries. The findings highlight the policy imperative of aligning environmental taxes with countries’ income level to curb the negative impact of climate change on tourism performance.
Danquah et al. (Wed,) studied this question.