A step toward tourism development: do economic growth, energy consumption and carbon emissions matter? Evidence from Pakistan

This research examines the potential impact of economic growth, carbon emissions, trade, and energy use on tourism development in Pakistan from 1980 to 2018. This study employed the Autoregressive Distributed Lagged technique for the simultaneous estimations of short and long-run associations. The study found a positive impact of energy use, economic growth, and trade openness on tourism development in the short and long run. On the other hand, the study reveals a negative impact of CO2 emissions on tourism development in Pakistan. The study further applied an innovative accounting approach for robust results of the study. The study based on Toda Yamamoto causality approach revealed unidirectional causal association among the study variables. The results, thus, suggest the change in investment decisions as the government and policy makers should encourage investments in services sector rather than polluting industrial sector as the services sector is less polluting and leading sector of the economy. This, in turn, could help attract tourists due to environmentally and economically sustainable growth.