Abstract. Tourism is often cited as an important driver of environmental degradation worldwide by previous literature. Butler (2000) alleges that tourists will not travel back to polluted and dirty destinations if they have alternative destinations available at comparable prices. It is thus likely that carbon emissions affect tourism industry as well. The goal of this paper is therefore to investigate the impact of carbon emissions on tourism receipts in the top ten country destinations around the world. We employ panel ARDL approach using the annual data for the period 1995-2010. Findings show that emissions from gaseous fuel have a positive impact whereas total emissions, emissions from solid fuel (only in the short-run) and liquid fuel have negative impact on tourism receipts. Policy implications depending on these results are also discussed.

Keywords: environmental degradation; tourism; carbon dioxide emission; panel ARDL.