International tourism, exchange rate, and renewable energy: Do they boost or burden efforts towards a low carbon economy in selected African countries?

Abstract

Abstract Africa continues to suffer from the effects of climate change in many ways. Records show that the continent’s carbon dioxide (CO2) emissions have seen tremendous upward adjustments over the past decades. While international tourism and renewable energy have been touted as sources of reducing CO2 emissions, the empirical evidence has been mixed, and it is also unclear how exchange rates moderate the effect of tourism on CO2 emissions. With the recent pace of tourism and renewable energy development, as well as exchange rate fluctuations in Africa, the study assesses the impact of international tourism, exchange rate, and renewable energy on CO2 emissions of seven most visited countries in Africa. Carbon dioxide emission was modelled within the Environmental Kuznets Curve (EKC) hypothesis. Regression analyses were performed using the quantile regression and fully modified OLS. Regression analysis from the fully modified OLS method shows that the EKC hypothesis holds for the selected countries; renewable energy and international tourism reduce carbon dioxide emissions; and exchange rate interacts with international tourism to reduce carbon dioxide emissions. The quantile regression shows variations in the impacts across the various quantiles. Countries in this study can rely on economic expansion, international tourism, and renewable energy to curb carbon dioxide emissions. It is recommended, among other things, that there should be the development of additional tourism locations and renewable energy adoption be scaled up as a means of reducing heavy polluting energy sources to reduce emissions emanating from the energy sector.