The effects of international tourism, electricity consumption, and economic growth on CO2 emissions in North Africa.

Abstract

This study examines the influence of tourism, economic growth, and electricity consumption on carbon dioxide (CO2) emission in the presence of the Environmental Kuznets Curve (EKC) model for a panel of four countries of North Africa, namely, Morocco, Algeria, Tunisia, and Egypt, over the period 1980-2014. Since we find the existence of cross-sectional dependence, we apply the unit root tests of CIPS and CADF, the Westerlund cointegration test as well as the dynamic seemingly unrelated regression (DSUR), and the Dumitrescu-Hurlin Granger causality test. The empirical results show that electricity consumption has a positive effect on CO2 emissions. In contrast, tourism has a negative relationship with CO2 emissions, implying improvement in the quality of the environment. The conclusions confirm the hypothesis of the environmental Kuznets curve for the countries in our sample. In addition, the causality test indicates the following results: (i) a one-way causality from real income, electricity consumption, and tourism to carbon emissions. (ii) A one-way causality running from electricity consumption to real income and tourist arrivals. (iii) A two-way causality between real income and tourism development. Based on these empirical results, several policy recommendations are proposed for the four countries of North Africa.