Exploring the nexus between tourism development and environmental quality: Role of Renewable energy consumption and Income

Abstract

Tourism appears as a catalyst for growth and development; however, recent studies have documented that this sector heavily depends on energy sector and as a consequence, entire tourism industry has been blamed for CO2 emissions. This study aims to investigate the impact of tourism develop, renewable energy and real GDP on CO2 emissions for G20 economies during the period of 1995-2015. In the presence of panel unit root, Pedroni and Kao methods confirm long-run cointegration among variables. FMOLS results show that a 1% increase in tourism development decreases pollution emissions by 0.05% in long run. The results show that the increase in renewable energy consumption reduces pollution emissions. A 1% increases in renewable energy reduces pollution emissions by 0.15% in long run. There was an inverted U-shaped relation between pollution and real GDP in long run confirming the validity of environmental Kuznets curve. Paper concludes that tourism development can be driving force for CO2 emissions reduction.