Striving towards carbon neutrality in emerging markets: the combined influence of international tourism and eco-friendly technology

Abstract

ABSTRACT In the past few decades, the tourism and hospitality sector has not only witnessed significant growth but also contributed tremendously to economic progress with lease inputs. This fastest-growing sector creates a number of environmental challenges, especially in emerging markets where the carbon footprint of tourism constitutes a large share of CO2 emissions. This study explores the effect of international tourism, renewable energy consumption (REN), and eco-friendly technology on CO2 emissions in emerging markets. The AMG, Driscoll-Kraay and Prais-Winsten regression confirm the adverse effects of international tourism on the environment, whereas technological innovation and REN mitigate CO2 emissions. Furthermore, economic growth and population increase CO2 emissions, while foreign direct investment (FDI) reduces CO2 emissions. Although the direct effect of technological innovation is insignificant, the indirect impact is negative and statistically significant; confirming the moderating effect of eco-friendly technology on the relationship between international tourism and CO2 emissions. The MMQR results suggest that REN reduces CO2 emissions across all quantiles. On the other hand, technological innovation significantly reduces CO2 emissions in lower and median quantiles, whereas international tourism and economic growth reduce CO2 emissions across all quantiles. Various directions of causality were reported alongside relevant policy directions.