THE EMPIRICAL EVIDENCE ON TOURISM-URBANIZATION-CO2 EMISSIONS NEXUS

Abstract

This study explores the tourism-urbanization-CO2 emissionsnexus in the top 10 touristic destination over the period 1995-2016. Panel VAR methodology is employed. The findings ofbivariate VAR models suggest the urbanization (UP) to have asignificant positive response to the tourism receipts per capita(TR) as well as the negative response of the UP to the emissionsof CO2. The outcome of trivariate model suggests a significantpositive response of UP to its lagged value. However, tourismreceipts per capita are found to respond negatively to theurbanization. The significant negative coefficient of -0.032 withUP suggests a negative response of urbanization to CO2emissions. IRFs (Impulse Response Functions) suggest a negativeresponse of CO2 to TR in the short-run. The impact is not foundto be significant in the long-run. Besides that, the results suggesta positive decreasing response of urbanization to emissions ofCO2. The results of this paper advocate the great environmentalawareness of citizens in the top 10 tourist destination suggestingthat sustainable tourism has no alternative and key decisionmakers should develop strategies and do necessary steps in orderto promote the development of sustainable tourism since theenvironment-friendly tourism is suggested to be the onlyacceptable one.