Wait or Act? Fiscal Moderation and Spatial Spillovers in the Tourism Environmental Kuznets Curve: Evidence from China

Sustainable tourism development depends on decoupling tourism growth from carbon emissions, yet whether tourism specialization follows an Environmental Kuznets Curve (EKC) in carbon emission intensity, and whether environmental fiscal expenditure can reshape that relationship, remains unsettled. Drawing on panel data for 30 Chinese provinces over the period 2007–2022, this study estimates two-way fixed-effects and spatial Durbin models. An inverted U-shaped relationship emerges as a point estimate, but it is not statistically robust: a formal Lind–Mehlum test does not reject the absence of an inverted U, and the relationship is identifiable only in specific subsamples. This pattern is not driven by the COVID-19 period: excluding the pandemic years (2020–2022) preserves both the sign pattern and the location of the turning point. Its turning point lies far beyond the level of tourism specialization that most provinces actually reach, so a spontaneous green transition cannot be assumed. Environmental fiscal expenditure flattens rather than steepens the curve, and the inverted U remains identifiable only where expenditure is at or below its average; in provinces with large overnight-visitor volumes, expenditure renders an otherwise undetectable tourism–carbon relationship estimable, a pattern we term statistical activation. Spillover effects from neighbouring provinces are negative in sign under a contiguity matrix, but there they are imprecisely estimated and the total effect cannot be distinguished from zero, whereas under a dense economic-distance matrix both the indirect effect and the total effect become positive and statistically significant; the direction of the externality is therefore weight-matrix dependent rather than settled. Heterogeneity in the pattern of coefficients is evident across regional endowments and governance intensity. The findings reframe sustainable tourism policy: waiting for an endogenous turning point is not a viable decarbonization strategy, whereas proactive and spatially coordinated fiscal intervention is. Expressed as carbon intensity per unit of tourism output, environmental performance becomes a measurable, monitorable basis for setting destination-specific sustainability targets.