Tourism and CO 2 emissions in Latin American countries: evidence from a CS-ARDL panel model

Abstract

Empirical research on tourism has shown that the tourism sector contributes significantly to the growth of economies through increased employment, foreign exchange earnings and economic diversification strategies. However, the adverse effects of tourism on the environment have not been reported as frequently. The present research aims to study the relationship between tourism development and CO2 emissions in Latin America. We use data between 1995 and 2019 for 17 countries in South America, Mexico and the Central American Isthmus, and 34 OECD countries (for comparative analysis). We use the cross-sectional augmented autoregressive distributed lagged regression (CS-ARDL) method and the Westerlund cointegration method, using GDP growth and energy mix consumed (renewable/non-renewable) as covariates, to analyze both the short-and long-run association between tourism development and environmental degradation. Our results suggest that both tourism growth and global economic activity increase CO2 emissions, while the energy mix consumed in LATAM countries contributes to reducing them. These results are valid in the short and long term. However, the results differ when considering OECD countries, where tourism does not appear to have a significant impact on the environment, either in the short or long term.

Keywords: tourism, economic growth, renewable energy, environment, CS-ARDL, carbon dioxide

JEL Classification: C33, O13, Z30