Tourism-Induced CO2 Emissions and Institutional Contingency: Panel and Quantile Evidence from 27 Democratic Economies

Abstract

The study examines the dynamic relationship among tourism, the quality of regulatory and democratic institutions, and CO2 emissions, using panel data that integrate relevant macroeconomic and demographic variables. The econometric approaches Feasible Generalized Least Squares (FGLS) and Quantile Regression were used to analyze data from 1995 to 2024. The study finds that tourism intensity has a direct and statistically significant impact on CO2 emissions. The energy demands of tourism, encompassing travel, accommodations, and infrastructure projects, result in high CO2 emissions. Therefore, the effects of democratic institutions and regulatory quality on carbon emissions are heterogeneous. The quality of governance is identified as an important moderating effect between trust and CO2 emissions. It means that tourism increases environmental risks. Besides, effective political institutions reduce them by establishing strong environmental laws, formulating specific policies, and ensuring strong social checks and balances. The study recommended that policymakers implement governance and emissions controls, connecting tourism expansion with democratic strengthening, effective regulation, and sustainable tourism investment to promote eco-friendly tourism growth and environmental preservation.