THE DYNAMIC ANALYSIS AMONG ENERGY CONSUMPTION, TOURIST EXPANSION AND ECONOMIC GROWTH ON CARBON DIOXIDE EMISSIONS

Abstract

This study constructs both short and long run theoretic and empirical dynamic model by using the co-integration and causality tests among energy consumption, tourist expansion, economic growth, and CO2 emissions. The following main findings were obtained: (1) the dynamic theoretical result shows that the effect of long run energy consumption and tourism expansion is greater than short run when CO2 emissions increases. (2) A short-run unidirectional causality exists from CO2 emissions to inbound tourist arrivals, and energy consumption. (3) A feedback causality relationship between economic growth and inbound tourist arrivals suggests that compared to outbound travelers, inbound tourist arrivals have a greater impact on economic growth. (4) A unidirectional causality running from economic growth to both CO2 emissions and inbound tourist arrivals indicates a growth-led hypothesis between them. (5) A short-run unidirectional causality from energy consumption to CO2 emissions, tourism expansion, and economic growth exists, along with a feedback causality relationship between energy consumption and CO2 emissions both in the short and long run. This implies that any conservation policies regarding tourism and energy programs may not only decrease CO2 emissions but also deter economic growth. Thus, suitable policies associated with cleaner energy programs in tourism activities and transportation are required to balance the conflicts between emissions and economic growth.