The dynamic relationship between international tourism and CO2 emissions: An empirical analysis

Abstract

This paper scrutinizes the dynamic relationship between international tourism and CO₂ emissions for the global countries spanning over the period 1990-2018. The study used panel econometric techniques as it accounts for heteroskedasticity and first order autocorrelation problem. Results from fixed effects (FE) and random effects (RE) model describe that international tourism significantly contributes to the level of CO₂ emissions and energy consumption, urbanization, trade and foreign direct investment have long run relationship with CO₂ emissions. This study uses energy consumption, urbanization, trade and foreign direct investment as control explanatory variables. The long run association between economic growth and CO₂ emissions has been examined through using Environmental Kuznets Curve (EKC) hypothesis. The long run estimates support EKC hypothesis. The study examined the impacts of international tourism on CO₂ emissions across developed and developing countries. However, the empirical findings document that, for developed countries tourism leads to increase in carbon emissions while for developing countries tourism leads to reduction in carbon emissions. Finding of the study are important for policy makers and suggest that sustainable tourism management policies, environmental protection policies and lower emissions technology should be promoted in international tourism.