Structural Breaks, Tourism and Co2 Emissions: The case of Turkey

Abstract

Turkey is a growing economy with high CO2 emissions and preferred tourist destinations in the world. Therefore, the study deals with the tourism-CO2 emissions link over the period 1983-2017 in case of Turkey by integrating renewable energy consumption to the CO2 emissions specification as an additional variable. The stationarity analysis of the variables is examined by Ng-Perron and Vogelsang-Perron tests. The ARDL and Hatemi-J cointegration approaches are employed to determine the existence of cointegration among the variables under structural breaks while the causality analysis is carried out through the VECM procedure. There exists cointegration among the variables under structural breaks. There also exists evidence in favour of EKC hypothesis. The DOLS, FMOLS and CCR results reveal that tourism and renewable energy consumption decrease CO2 emissions in the long run. Additionally, a long-run bi-directional causality between tourism, renewable energy, and CO2 emissions exists. The empirical results obtained from the study can provide several policy suggestions to reduce environmental pollution for Turkish economy.