Environmental impacts of international tourism: examining the role of policy uncertainty, renewable energy, and service sector output.

Abstract

The contributions of the tourism sector and its development to economic growth are widely recognized across the economies. However, development in this sector also has its impacts on environmental quality and sustainability. In addition, elevated economic policy uncertainty also has repercussions on the environment. The objective of this study is to examine the impact of international tourism on environmental sustainability while considering EPU, renewable energy consumption (REC), and service sector output (SSO) in the model estimated based on panel data from 17 economies. Having the heteroskedasticity and autocorrelation issues in the panel data, the author used multiple econometric methods (pooled OLS with Drisk/Kraay standard errors (DKSEs), GLS, PCSE, and quantile regressions) to examine the relationship between international tourism and environmental sustainability. DKSEs address the common issue of heteroskedasticity and GLS also accounts for both heteroskedasticity and autocorrelation. PCSE method corrects these errors. Finally, quantile regression estimates the relationships between variables at different points of the distribution. The results show that international tourism and EPU adversely impact environmental quality and sustainability by increasing GHG emissions. The findings show that increased GHG emissions from international tourism and EPU harm environmental sustainability. Furthermore, SSO and REC significantly reduce GHG emissions and enhance sustainability. Nevertheless, the tourism sector should adopt sustainable practices like using eco-friendly lodging, conserving energy and water, and utilizing renewable energy (RE) to reduce negative environmental impacts. Conserving biodiversity and regional cultures while minimizing waste and resource use is also essential. Tourists should embrace eco-friendly practices such as choosing green hotels, conserving energy and water, and supporting environmental causes while adhering to regulations to reduce emissions. The study recommends establishing uniform trade laws that support green technology and RE to reduce EPU. The findings stress the need for international collaboration to promote eco-friendly tourist practices and minimize the sector's environmental impact.