The Empirical Evidence on Tourism-Urbanization-CO2 Emissions Nexus

This study explores the tourism-urbanization-CO2 emissions nexus in the top 10 touristic destination over the period 1995-2016. Panel VAR methodology is employed. The findings of bivariate VAR models suggest the urbanization (UP) to have a significant positive response to the tourism receipts per capita (TR) as well as the negative response of the UP to the emissions of CO2. The outcome of trivariate model suggests a significant positive response of UP to its lagged value. However, tourism receipts per capita are found to respond negatively to the urbanization. The significant negative coefficient of -0.032 with UP suggests a negative response of urbanization to CO2 emissions. IRFs (Impulse Response Functions) suggest a negative response of CO2 to TR in the short-run. The impact is not found to be significant in the long-run. Besides that, the results suggest a positive decreasing response of urbanization to emissions of CO2. The results of this paper advocate the great environmental-awareness of citizens in the top 10 tourist destination suggesting that sustainable tourism has no alternative and key decision makers should develop strategies and do necessary steps in order to promote the development of sustainable tourism since the environment-friendly tourism is suggested to be the only acceptable one.