Yes!
By removing the bark and the cambium layer directly inside the bark you remove the vessels that transport water up the tree.
The process of removing bark and the cambium layer is reffered to as bark-ringing.
The thickness of the bark strip you remove will depend on the age and size of tree.
This is a VERY dangerous thing to do. Trees tend to die slowly and a good wind storm or a lot of rain can bring the weakend tree down on a person or structure. If you don't want the tree, have a professional remove it.
Newt