Renewable Energy Consumption, Tourism and Climate Change Relationship in Developed Countries

Abstract

This study aims to examine the long-term effects of tourism revenues and renewable energy consumption on carbon emissions in developed countries. In this context, the analysis was conducted using annual panel data covering the period from 2000 to 2023. To test the long-term relationship among the variables, the Pedroni and Kao cointegration tests were employed, and evidence of cointegration was found among the variables. For the estimation of long-run coefficients, the fully modified ordinary least squares (FMOLS) and dynamic ordinary least squares (DOLS) methods were applied. The FMOLS results indicate that both renewable energy consumption and tourism revenues have statistically significant negative effects on carbon emissions. Accordingly, an increase in renewable energy consumption leads to a reduction in carbon emissions, and similarly, an increase in tourism revenues contributes to environmental improvement. However, according to the DOLS estimates, the effects of both variables on carbon emissions were found to be statistically insignificant. The divergence in the results of the FMOLS and DOLS methods may be attributed to the structure of the panel data set and the sensitivity of the estimation techniques. The findings suggest that sustainable energy and tourism policies in developed countries can serve as important tools in the fight against climate change. The study offers policy recommendations, emphasizing the need to promote renewable energy use and environmentally friendly tourism activities.