Tourism and Renewable Energy in South Asia: A Panel Study

Abstract

Purpose - The distinct linkage between tourism and energy has received significant attention due to the recent momentum towards green tourism and environmental sustainability. Given the present growth trajectory of the tourism industry, we examine the selected South Asian countries' tourismrenewable energy nexus. Design - We obtain data (1995 to 2018) from the World Bank (2018) and the BP Statistical Review of World Energy (2018). Methodology - Second generation cointegration tests were conducted to verify the cointegrating relationship. DCCE and ARDL-PMG methods were used for long-run estimation. DumitrescuHurlin panel causality test was conducted to check long-run causalities. Finally, Variance Decomposition analysis was used to assess the effect of tourism on REs in the future Findings - Tourism and renewable energy consumption are positively associated in the long-run. Unidirectional causalities are observed from tourism to renewable energy uses at both the aggregate and disaggregate levels. Furthermore, tourism can significantly explain the predicted variation in the use of different renewable energies for the next 15 years. Originality - To our knowledge, this is the first study conducted to analyse the relationship between tourism and renewable energy consumption at both aggregate and disaggregated levels in South Asia. We also propose tourism-friendly renewable energy policies that may be key for continuing sustainable tourism development in the selected South Asian countries.