The role of tourism, natural resources, and renewable energy in enhancing economic growth and combating climate change in OPEC economies

This study examines the impact of renewable energy, inbound tourism, natural resources, and regional economic growth on carbon emissions from 1975 to 2020. Employing the panel PMG-ARDL technique, the research investigates the short- and long-term relationships among these variables, along with panel Granger causality and variance decomposition analyses. The findings reveal that, in the long run, increased demand for renewable energy significantly reduces carbon emissions, with an elasticity estimate of -0.365%, indicating an inelastic relationship. Short-run results show that natural resources help reduce carbon emissions, but this effect reverses in the long term, showing a positive correlation. Long-term data also indicate that international tourism significantly lowers carbon emissions, supporting eco-friendly tourism in OPEC countries. Conversely, short-run regional growth is associated with higher carbon emissions, whereas sustainable economic initiatives reduce emissions in the long term. Panel Granger causality results suggest that carbon emissions drive regional economic growth, while better management of natural resources and renewable energy sources boost inbound tourism. Variance decomposition analysis projects that regional economic development may increase carbon emissions over the next decade. The study concludes that OPEC countries must increase their share of green energy resources in their energy mix to enhance environmental quality.