Energy intensity, tourism development, and environmental degradation nexus: further evidence from Small Island State in South Asia

The tourism industry is considered as a vital factor of economic growth but its impact on the environment also grabs the attention of researchers. The prime objective of the study is to find the effect of energy intensity and tourism on environmental degradation in the Maldives. For this purpose, energy intensity along with tourism is modelled in the environmental Kuznets curve (EKC) hypothesis context. A long run relationship is established among variables through cointegration technique after it is found that all variables are integrated of order one. Results show that energy intensity is contributing to environmental degradation in not just long run but also in short run whereas tourism leads to environmental degradation in long run while it curbs environmental degradation in short run. This study confirms existence of EKC hypothesis in the Maldives. Causality analysis reveals unidirectional causality from income into carbon emissions and tourism. Policies are recommended for sustainable tourism in the Maldives.

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