Do tourism development and structural change promote environmental quality? Evidence from India

Abstract

A plethora of studies reveals that tourism development and structural change contribute to the socioeconomic progress of the countries. However, the effects of tourism development and structural change on environmental quality are yet to be explored in detail. Hence, the present work evaluates the dynamics of tourism development and structural change on emissions of CO2 as an environmental quality, representative by endogenizing economic progress, consumption of energy, and structural break in India. Toward the empirical front, this study relies on quarterly time series data for 1995Q1–2016Q4 within an approach of bounds testing for cointegration due to its simulation capacity for integration order of the study variables. The emanated outcomes reveal the long-term association between the variables of interest. After validating the long-term correspondence among the variables, the ARDL-based long-run results show that tourism development worsens the quality of the environment, whereas transition in the structure of the economy cause for improving the quality of the environment and structural break in the series shows an insignificant role in carbon emissions. Moreover, it is revealed that economic growth improves the quality of the environment, and consumption of energy exhibits a deleterious association with environmental quality. These findings’ robustness is confirmed using fully modified/dynamic OLS and canonical cointegrating regression. Therefore, the study suggests that policymakers must ensure a sustainable tourism practice to reap environmental sustainability. Similarly, the government should promote investment in the service sector to maintain a desirable environmental quality.