Ecotourism or ecological concerns? Tracing the impact of economic policy uncertainty and natural resources on tourism-driven ecological footprints.

Abstract

The influence of tourism development and economic policy uncertainties on environmental sustainability is substantial. Promoting responsible tourism and using sustainable tourism practises, like offering eco-friendly lodging, is a key part of protecting natural habitats and lowering carbon footprints. Hence, this study tries to examine the relationship between tourism development, economic policy uncertainty, renewable energy, and natural resources on the ecological footprint of India during 1990-2022. This study applies a novel dynamic ARDL simulation approach for long-run and short-run analyses. The study also employs frequency-domain causality to check the causal relationship between the variables. The result reveals that tourism has a positive effect on the ecological footprint. Similarly, economic policy uncertainty has a positive and significant effect on the ecological footprint in India during the sample period. Additionally, natural resource rent shows a positive effect on the ecological footprint or deteriorating environmental quality in the short and long run in the sample period. However, renewable energy consumption indicates a negative effect on the ecological footprint. The results reveal that TDI and EPU have rejected the null hypothesis of no Granger cause in the long, medium, and short term. While renewable energy has a causal relationship with ecological footprints in both the long run and medium run, it is imperative for India to adopt measures that facilitate the advancement of sustainable tourism, with a particular focus on promoting environmentally friendly lodging options, enhancing public transportation systems, and implementing effective waste management strategies.