Assessing environmental sustainability and tourism revenue dynamics in BRICS economies

Environmental sustainability with tourism-led development has become a major challenge for the BRICS economies, where rapid economic growth and tourism expansion have put significant pressure on ecological resources. Despite the growing importance of sustainable tourism, empirical evidence on the relationship between environmental sustainability and tourism revenue in the BRICS economies remains limited. This study examines the effects of environmental sustainability, international tourist arrivals, and inflation on tourism revenue in the BRICS economies. The study used a balanced panel dataset from 2000 to 2020 and second-generation panel econometric techniques, such as the Cross-sectionally Augmented Im, Pesaran and Shin (CIPS) unit root test, Panel Autoregressive Distributed Lag (Panel ARDL) estimation, Cross-Sectionally Augmented Autoregressive Distributed Lag (CS-ARDL) estimation, and the Dumitrescu–Hurlin panel causality test to investigate the relationship among the variables. Environmental sustainability was measured using the Load Capacity Factor (LCF), which integrates ecological footprint and biocapacity into a comprehensive sustainability indicator. The findings reveal that environmental sustainability has a significant negative long-run association with tourism revenue (β = − 1.46, p = 0.04), suggesting that tourism expansion in the BRICS economies has historically been accompanied by increasing ecological pressure rather than improvements in environmental sustainability. Inflation exhibits a negative and statistically significant long run association with tourism revenue in the PMG–ARDL estimation (β = −0.294, p = 0.01), although this relationship is not statistically significant in the CS-ARDL robustness analysis. International tourist arrivals are not statistically significant in the long run but have a significant short run association with tourism revenue. The error correction term (ECT = − 0.24, p < 0.01) indicates a stable long-run equilibrium, with approximately 24% of the short-run disequilibrium corrected annually. The findings highlight the need to balance tourism growth with environmental sustainability in line with SDG 8 (Decent Work and Economic Growth), SDG 12 (Responsible Consumption and Production), and SDG 13 (Climate Action).