Energy Consumption, CO2 Emissions, and Tourist Arrivals to Small Island Economies Dependent on Tourism [Academic poster]

In less than two decades, the global tourism industry has overtaken the construction industry as one of the bigger polluters, accounting for up to 8% of global greenhouse gas emissions. Consequently, research into the causal link between emissions and the tourism industry have increased significantly focusing extensively on top earners from the industry. However, few studies have thoroughly assessed this relationship for small island economies dependent on tourism. Hence, this study assessed the causal relationship between CO2 emissions, real GDP per capita (RGDP) and the tourism industry. The analysis is conducted for seven tourism-dependent countries for the period 1995 to 2014 using panel VAR approach. Unit root tests confirms all variables are stationary at first difference. Our VAR granger causality/block exogeneity Wald tests results show that a unidirectional causality flowing from tourism to CO2 emission, RGDP, and energy consumption, but a bi-directional causality exists between tourism and urbanization. This implies that in countries that depend on tourism, the behavior of CO2 emission, RGDP, and energy consumption can be predicted by the volume of tourist arrivals, but not the other way around. The impulse response analysis also shows that the responses of tourism to shocks in CO2 appear negative within the 1st year, positive within the 2nd and 3rd year but revert to equilibrium in the fourth year. Finally, the reaction of tourism to shocks in energy consumption is similar to its reaction to shocks in RGDP. Tourism responds positively to shocks in urbanization throughout the periods. Consequently, this study draws important energy and tourism policy implications

Modeling the nexus between coal consumption, FDI inflow and economic expansion: does industrialization matter in South Africa?

This study examines the role of industrialization in the energy-growth-FDI nexus for the case of South Africa using data over the period 1970 to 2018. The empirical exercise was conducted using Pesaran Autoregressive Distributed Lag (ARDL) bounds testing approach. To accomplish our study objective, we analyze stationarity properties of the series using the unit root test after which we applied Bayer-Hanck (B-H) combined technique to cointegration to assess whether a long-run relationship exists among the series. Empirical results show that a 1% change in FDI account for 0.002% and 0.013% increase in economic expansion in the short- and long- run respectively. Also, a 1% increase in coal consumption influence GDP negatively by 0.083% and 0.207% in the short- and long- run respectively. Furthermore, a 1% increase in total natural resource rent positively affects GDP by 0.02% and 0.05% respectively in the short- and long- run. Industrialization, on the other hand, demonstrates a positive and significant impact on the economic growth process both in the short and long run. Industrialization contributes 0.506% and 1.274% to economic expansion both in the short and long run respectively. The causality tests suggest that a one-way causal link running from FDI to industrialization, and from industrialization to coal consumption exists. Finally, FDI inflow drives Total Natural Resource rents in South Africa. This study also gives reliable growth and energy policy proposals to policymakers applicable to countries around the globe

Modelling the interaction between Tourism, Energy Consumption, Pollutant Emissions and Urbanization: Renewed Evidence from Panel VAR.

In less than two decades, the global tourism industry has overtaken the construction industry as one of the bigger polluters, accounting for up to 8% of global greenhouse gas emissions as reported by the United National World Trade Organization (UNWTO, 2018). This position resonates the consensus of the United Nations Framework Convention on Climate Change (UNFCCC). Consequently, research into the causal link between emissions and the tourism industry has increased significantly focusing extensively on top earners from the industry. However, few studies have thoroughly assessed this relationship for small island economies dependent on tourism. Hence, this study assessed the causal relationship between CO2 emissions, real GDP per capita (RGDP) and the tourism industry. The analysis is conducted for seven tourism-dependent countries for the period 1995 to 2014 using a panel VAR approach, with support from FMOLS and PMG-ARDL models. Unit root tests confirm all variables are stationary at first difference. Our VAR Granger causality/block exogeneity Wald tests results show that a unidirectional causality flowing from tourism to CO2 emission, RGDP, and energy consumption, but a bi-directional causality exists between tourism and urbanization. This implies that in countries that depend on tourism, the behaviour of CO 2 emission, RGDP, and energy consumption can be predicted by the volume of tourist arrivals, but not the other way around. The impulse response analysis also shows that the responses of tourism to shocks in CO 2 appear negative within the 1 st year, positive within the 2nd and 3rd year but revert to equilibrium in the 4th year. Finally, the reaction of tourism to shocks in energy consumption is similar to its reaction to shocks in RGDP. Tourism responds positively to shocks in urbanization throughout the periods. These outcomes where resonated by the Dumitrescu and Hurlin causality analysis where the growth induced-tourism hypothesis is validated as well as feedback causality observed between tourism and pollutant emission, urbanization and pollutant emission in the blocs over the sampled period. Consequently, this study draws pertinent energy and tourism policy implications for sustainable tourism on the panel over their growth trajectory without compromise for a green environment.Keywords: Energy Consumption; GDP; Tourism; Impulse response; Variance decomposition

How Does Institutional Quality Moderate the Impact of Tourism on Economic Growth? Startling Evidence from High Earners and Tourism-Dependent Economies

Over the years, policymakers in tourism-reliant economies have been saddled with the mandate to not only accelerate economic growth, but also increase the living standards of domestic citizens. Tourism development has been highlighted in extant literature as a route to attaining sustainable economic growth. Past studies affirm that tourism contributes significantly to both the wealth of nations and cultural diffusion. However, whether institutional quality moderates the impact of tourism on economic growth has yet to be given sufficient academic attention. The study uses data from 2002 to 2017 and the generalised method of moments (GMM) methodology, while the Dumitrescu-Hurlin panel causality test is applied to check the robustness of results. The empirical results show that a 1% increase in tourist arrivals or air transport led to a 0.41% and 0.17% increase in economic growth, respectively. However, when particular governance variables are taken into consideration, this impact is reduced to -0.09% and -0.02% for both tourism proxies. This implies that the influence of governance on the tourism-led growth hypothesis through an interaction term between institutional quality and tourist arrivals was found to reverse the impact of tourism on growth from positive to negative in both high-earning and tourism-dependent countries. While infrastructure also contributes to economic growth, its impact is slightly higher in top earners than in tourism-dependent economies. The results of the study suggest that weak institutions in both country groups allow corrupt practices, which diverts the positive impact tourism should have on economic growth

Testing the transport-induced environmental Kuznets curve hypothesis: The role of air and railway transport

The airline and railway industry contribute immensely to economic development, however, its role in environmental pollution requires attention. Here, this study builds on the theoretical pedigree of the environmental Kuznets curve (EKC) hypothesis to explore the contribution of the air and railway transportation sector and urbanization to the emission-growth argument. We utilized annual time-frequency data from 1995 to 2014 for a panel of top 10 air passenger carrier countries using robust panel estimators that control for cross-section dependence. The empirical analysis shows a positive significant relationship between emissions and economic growth, thus, economic growth is emission-embedded with limited green growth. The existence of the EKC phenomenon is affirmed for the investigated blocs — where economic growth is prioritized over environmental quality. Additional, while air transportation drives pollution, railway transportation and urbanization decline emission over the sampled period. The results underscore the need for clean and environmentally friendly energy sources for air sector operations

Does Globalization in Turkey Induce Increased Energy Consumption: Insights into its Environmental Pros and Cons

Globalization is the paradigm shift to a more integrated world economy broadly shaping economies and societies around the globe. The wave of globalization is much more eminent on its impact on increased energy demand, knowledge and technology transfer, trade and financial capital flows. The present study focuses on Turkey a fast-emerging economy that is no exception to the wave of globalization. This current study explores the dynamics between ecological footprints, energy consumption and real income level for the case of Turkey in a carbon-income function while accounting for other co-variate like globalization to avoid omitted variable bias. The study data spans from 1970-2017 on an annual frequency basis. The Stationarity properties of the outlined variables were investigated. Subsequently, the equilibrium relationship between the variables is confirmed by the battery of recent robust estimation techniques. while to detect the causality of direction among the variables the Modified Wald test causality test is utilized. This study reveals that an increase in energy consumption in Turkey reduces environmental pollution by a magnitude of 0.37% in the short run and 0.43% long run. While an increase in economic expansion dampens the quality of the environment 0.42% and 0.72% on both a short and long-run basis. This is indicative given that Turkey is more energy conscious and energy-efficient while a positive statistically significant relationship is observed between real income level and ecological footprint and globalization index. The causality analysis also supports the growth-induced energy consumption hypothesis. The study further offers policy direction for the energy sector in Turkey in the face of global interconnectedness

The Impact of Stock Market Manipulation on Nigeria’s Economic Performance

This study is the first attempt to empirically analyse stock market manipulation on the Nigerian Stock Exchange and its consequences on economic performance. The empirical investigation employs a broad data set of 186 actual manipulation cases indicted by the Nigerian Security and Exchange Commission between 2002 and 2016. We embrace market microstructure analysis and the event study method to understand how various manipulation techniques impact on market measures, and the Error Correction Model to evaluate their economic effects. Manipulation is found to distort market efficiency measures (such as Market Capitalisation, Value Traded Ratio and All-share Index) and genuine traders are forced to exit the market to avoid possible trading with a manipulator. Such huge divestment and the subsequent financial risk weaken the ability of the Stock Exchange market to improve economic performance, creating negative consequences at the post-manipulation period. Essentially, economic variables (such as the GDP) react negatively to manipulative trading. This finding is insightful and a prompt to the Securities and Exchange Commission to design policy responses towards deterring and prosecuting unfair trading practices or other activities that contravene the market rules

Nuclear Energy Consumption and Economic Growth in the UK: Evidence from Wavelet Coherence Approach

The aim of this present study is to assess the causal link between nuclear energy consumption and economic growth in the UK using Toda Yamamoto causality and wavelet coherence tests with the objective of responding to the following questions: (i) Does consumption of nuclear energy lead to economic growth in the UK and/or does economic growth lead to the consumption of nuclear energy sources in the UK, and (ii) if so, why? The findings from wavelet coherence reveal that changes in economic growth lead to changes in nuclear energy consumption in the UK at different frequencies, especially in the long-run, and in different periods between 1998 and 2017. In addition, there is a positive correlation between nuclear energy consumption and economic growth between 2002 and 2006 in the short-run. In this study, we also checked the consistency of the findings from wavelet coherence which is confirmed by the outcomes of Toda Yamamoto causality test. Therefore, the present study is likely to attract great interest from the policy-makers and researchers in this field. At the same time, it is likely to start a new debate

Roadmap for Climate Alliance Economies to vision 2030: Retrospect and Lessons

The United Nations Climate Conference 25, held in December 2019, reached a significant agreement against implementing the Paris agreement come 2020. Bound by the contract, 189 countries who are party to the deal agreed to constrain worldwide temperature to ascend to 1.5 degrees Celsius. To this end, the present study attempts to investigate the readiness of selected countries in the European Union to implement the agreement, which will better the quality of the global environment. In line with this, this study appraises the connection between economic growth, renewable and non-renewable energy consumption, on emissions in 11 countries in the European Union from 1990 to 2016. The study utilises the Pooled Mean Group-Auto Regressive Distributed Lag (PMG-ARDL) model estimator and Dumitrescu and Hurlin Panel Causality analysis to analyse the long-run and short-run impact and direction of causality among these factors, respectively. The long-run study's empirical results show a U-shaped Environmental Kuznets Curve (EKC) and a negative connection between renewable energy use and emissions in the EU-11 countries. In the short-run, non-renewable energy use worsens CO2 emissions while renewable energy use leads to a fall in emissions. Similarly, causality tests show a feedback mechanism between emissions and renewable energy use and between non-renewable energy and renewable use. Also, there is unidirectional causality from income to CO2 emissions, non-renewable energy use to CO2 emissions. The investigation recommends an expanded proportion of renewable energy sources in the EU countries' energy mix to cut down on emissions

The effect of energy consumption on the environment in the OECD countries: economic policy uncertainty perspectives

In this paper, we investigate the impact of energy use and economic policy uncertainties on the environment. To achieve this objective, we use the pooled mean group-autoregressive distributed lag methodology (PMG-ARDL) and Dumitrescu and Hurlin causality test on 22 Organisation for Economic Co-operation and Development (OECD) countries between 1985 and 2017. The PMG-ARDL estimation shows that energy use and economic policy uncertainties have a positive relationship with carbon dioxide emission (CO2) emission, while a negative relationship is confirmed between renewable and CO2 emissions in the long run. The short-run estimation shows a positive relationship between energy use, real gross domestic product, and per capita on CO2 emissions. The Dumitrescu and Hurlin causality results highlight a unidirectional running from real GDP and GDP per capita square to CO2 emissions. Furthermore, one-way causality exists between CO2 emissions to economic policy uncertainties. These results have policy implications on the macroeconomy which are discussed in detail in the concluding section