The longitudinal relationship between tourism, electricity consumption, and CO2 emissions

Abstract

The objective of the study is to determine the electricity use, and tourism industry environmental impacts, and increase in CO2 emissions in Pakistan. What are the linkages of foreign direct investment, intercountryal trade, gross domestict product, and CO2 emissions. The study has applied the Autoregressive distributed lag (ARDL) method to analysis the data set from 1985 to 2023. The robustness test is applied using Dynamic Ordinary Least Square (DOLS), and Fully modified ordinary least squares (FMOLS). The results reveal that the increase in the electricity use, and tourism industry has significant negative impacts on CO2 emissions in both short- and long-run. The increase in intercountry trade effects the Domestic Product growth (GDP) growth and causes to increase in use of fossil fuels, which are the major source of CO2 emissions. The increase in foreign direct investment (FDI) increase the GDP growth, and FDI also increase the CO2 emissions in Pakistan. The results suggests that the incresae in the renewal energy consumption for the electricity production and transportation can help to decrease the CO2 emissions in Pakistan.

Keywords

• Tourism industry
• electricity use
• Intercountryal trade
• Foreign direct investment
• ARDL
• FMOLS