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A decomposition analysis of CO2 emissions: evidence from Malaysia’s tourism industry

Ng, Tuan Hock, Lye, Chun Teck, Lim, Ying San
The international journal of sustainable development and world ecology 2016 v.23 no.3 pp. 266-277
carbon dioxide, electricity, energy, greenhouse gas emissions, heat, issues and policy, pollution, tourism, transportation, Malaysia
The most important question raised from issues of environmental degradation is how economic activities bring about changes that will result in pollution. In the pursuit of tourism economy, contrary to popular interest, the travel and tourism (T&T) industry may cause environmental damages through the emissions of carbon dioxide (CO ₂) from energy consumption in areas such as transportation and delivery of amenities. Given this major concern, this paper attempts to investigate the linkage between tourism and CO ₂ emissions in Malaysia between 1981 and 2011. In particular, this study fills the knowledge gap by taking a closer look at the impact of international tourist arrivals on CO ₂ emissions by sector – electricity and heat generation and transport. Results from the bound test method suggest that there exists a long-run relationship among the variables under consideration when CO ₂ emissions become the dependent variable. The original result is similarly robust to alternatives, which are CO ₂ emissions from sectors of electricity and heat generation and transport. Furthermore, the vector error correction model causality analysis indicates a causal relationship between tourism and CO ₂ emissions by transport and electricity and heat generation. Subsequently, several tourism-related policies are drawn from these findings.