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55 
 

 
       

On the Nonlinear Impact of Tourism on Environment Quality in South Asia: 
Evidence from the NARDL Approach  
 
Waheed Ahmad a, Zubair Tanveer b, Muhammad Tariq Majeed c 
 

a PhD Scholar, Department of Economics and Statistics (HSM) UMT Lahore, Pakistan.  
  Email: f2021330006@umt.edu.pk 
b PhD Scholar, Department of Economics and Statistics (HSM) UMT Lahore, Pakistan.  
  Email: f2021330003@umt.edu.pk  
c Professor, Department of Economics, Quaid I Azam University, Islamabad, Pakistan. 

  Email: m.tarq.majeed@gmail.com 
 

ARTICLE DETAILS ABSTRACT 
History: 
Accepted 05 March 2022 
Available Online March 2022 
 

The current study inspects the nonlinear effects of tourism (TOR), 
energy use, and output growth on carbon emissions in the selected 
South Asian (SA) countries, namely Pakistan, Nepal, Sri Lanka, and 
India. The empirical results are obtained by implementing the recently 
developed nonlinear autoregressive distributive lag (NARDL) technique 
covering the data spanning from 1990 to 2019. The empirical findings 
suggest the nonlinear effect of TOR on carbon emissions in the long run. 
Further, the results revealed that positive shocks in TOR have a positive 

and significant effect on carbon emissions in the SA region. In contrast, 

negative shocks in TOR mitigate carbon emissions in all SA economies 
except Nepal. Moreover, the results demonstrate that energy use and 
output growth also have a meaningful impact on carbon emissions. 
Based on the findings, the directions for future research and policy 

implications are proposed. 

 
ยฉ 2022 The authors. Published by SPCRD Global Publishing. This is an 

open access article under the Creative Commons Attribution-
NonCommercial 4.0  

Keywords: 
Carbon Emissions, Tourism, 

Energy Use, Output Growth, 
South Asian Economies 
 

JEL Classification:  
K32, L83, O13 

 

DOI: 10.47067/reads.v8i1.434 

Corresponding authorโ€™s email address: f2021330006@umt.edu.pk 
 

1. Introduction 
In the contemporary world, creating and managing a sustainable travel and tourism industry 

has become a critical challenge for policymakers around the globe. On the one hand, the tourism sector 
serves as an important element of inclusive growth and economic development by establishing a link 
between each sector of an economy and supporting economic broadening. Besides, the tourism industry 
contributes to economic growth by generating employment, enhancing income, improving ways of life, 
offsetting trade deficit by improving export function, and evolving the overall financial system (Chon et 
al. 2013; UNWTO 2017; Balsalobre-Lorente et al. 2018; Sinha et al. 2017). Furthermore, the influx of 
international tourists raises income levels and improves the electricity and transportation industries by 
expanding social, and economic goods and services (Akadiri et al. 2020).  
 



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On the other hand, the expansion of tourist activities has been closely connected to energy use 
and carbon dioxide emissions, having environmental repercussions (Sharif et al., 2020; Ozturk and 
Acaravci 2010; Khan et al., 2020). The remarkable rise in global tourist activities has fueled public 

debate about tourism's meaningful impact on global warming through carbon emissions (๐ถ๐‘‚2 ๐‘’๐‘š). 
Although tourism is highly vulnerable to environmental alteration, it contributed 5 percent of total 
greenhouse gas (GHG) emissions in 2008. In contrast, transportation accounts for nearly 75 percent of 
total GHG emissions (United Nations World Tourism Organization). Furthermore, the tourism 
hospitality industry consumes a substantial amount of energy and accounts for approximately 20 
percent of ๐ถ๐‘‚2 ๐‘’๐‘š. The UNWTO symposium proclaimed that carbon dioxide emissions from the 
hospitality industry can be lowered up to 30โ€“40 percent by introducing innovative technologies and 
techniques in the tourism industry. 
 

In an earlier study, Bach and GรถรŸling (1996) investigated the empirical relationship between 
tourism development and environmental quality for the first time. They demonstrated that the tourism 
industry contributed substantially to environmental deterioration by escalating ๐ถ๐‘‚2 ๐‘’๐‘š growth. Goudie 

and Viles (2013) also concluded the same outcome. Furthermore, with increasing tourism activities, 
water is excessively used, natural resources are overexploited, and the volume of wastage material at 

natural sites is swelling. In this respect, Chan et al. (2018) and Latif et al. (2018) reported that an 
increased tourist flow may lead to soil erosion, the polluted area of land pollution, water contamination, 
air pollution, and eventually demolishing the world's natural beauty. Tourism boosts the ratio of 
๐ถ๐‘‚2 ๐‘’๐‘š because of the increase in the consumption of electricity and transportation and building of 
relatively more houses (Nepal et al. 2019).  
 

Contrary to this, some researchers advocate the proposition that the tourism industry has a 
positive impact on environmental quality. They argue that the tourism industry provides essential 
services and encourages innovation and energy proficiency for the sustainable development of a nation. 

As a result, touristry is considered favorable for environmental protection (Akadiri et al. 2020; Imran et 
al. 2014; Dogan and Aslan 2017; Gรถssling and Hall 2006; Paramati et al. 2018). Moreover, if the leaders 
of the world's economies adopt eco-friendly policies, the tourism industry may positively impact 
environmental quality (Ahmad et al., 2019). However, the existing empirical literature has not yet 
thoroughly investigated whether the tourist industry has an asymmetric/non-linear relationship with 
environmental quality. 
 

Particularly, in the South Asian region, there is still a paucity of literature on the relationship 
between tourism development and environmental deterioration. As a result, the purpose of this 
research is to bridge that gap by concentrating on the non-linear/asymmetric and moderating 
influence of tourism on the ecological system in terms of environmental quality. The particular goals of 
the study to investigate the non-linear/asymmetric relation between tourism and environmental quality 

in South Asian (SA) economies.  
 

In the recent decades, South Asian economies have emerged as an attractive tourist place owing 
to its natural beauty, cultural diversity, rich historical background, and price competitiveness. This 
region is home to tourism-based countries like Bhutan, Maldives, Nepal, and Sri Lanka that attract 
tourists from all over the world. According to, the World Economic Forumโ€™s Travel and Tourism 
Competitiveness Index (2019) this region has been ranked as โ€œthe most improved region since 2017.โ€ 
The present study explores the nonlinear hidden effects of tourism on carbon emissions in the selected 
countries over the period 1990-2019 by employing the recently developed nonlinear autoregressive 
distributive lag (NARDL) technique. 



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The present study contributes to the existing literature in the following ways: First, it 
investigates a novel concept namely the non-linear/asymmetric relationship between tourism and 
environmental quality instead of preceding literature that exclusively investigated linear relationships 

between these two variables. Second, this study provides an asymmetric analysis of each South Asia 
economy in a comparative setting. That is, the present research portrays a comparative picture across 
South Asian economies by providing a comprehensive and updated analysis about individual economies 
using a fresh data. In this manner, the present study fills the existing research gap on this subject 
matter in the South Asian region as well as at the individual country level. Third, to unveil the causal 
associations between the series, this study utilizes the asymmetric causal relationship. This framework 
helps to explore the nonlinear hidden causal effects of the selected variables. Fourth, the NARDL 
application is used to get the short-and-long-run empirical results for the relevant policy implications. 
The empirical outcome suggests that the partial sum of positive shocks in tourism adversely affects the 
environmental quality. These empirical findings highlight the importance of ecotourism or sustainable 
tourism in achieving long-term development. 
 

The remaining study is structured as follows: Next section provides the literature review. The 
discussion on the methodological framework is provided in Section 3 and the description of the data is 

provided in section 4. Section 5 provides the discussion on empirical findings and finally, section 6 
concludes the study and offers some suitable policy implications.  
 
2. Literature Review 

Finding environmentally friendly explanations for economic growth is at the heart of sustainable 
development. In this context, the well-known environmental Kuznets hypothesis states that economic 

growth hurts ecological quality during an initial stage of economic development. However, once a 
country reaches a certain level of income, the quality of the environment strengthens (Dasgupta et al., 
2002). Several studies investigated the impact of various industries on the ecological system like 

Plainspoken, Olasehinde-Williams, & Alao (2019) analyzed the role of agriculture in Africa, Raza, Shah, 
& Sharif (2019) examined the time-frequency relationship of transport-based energy consumption in 
America, Haiti, (2015) studied Industrial growth in developing world. Sharif, Afshar, & Nisha (2017) 
inspected the role of tourism on CO2 emission in Pakistan. 
 

Travel for pleasure is considered one of the key aspects of ecological deprivation since it involves 
massive energy levels for different events such as โ€œfood supplying, transportation, housing, and the 
management of trip-related attractionsโ€ (Saenz-de-Miera, & Rossellรณ,2014). Saenz-de-Miera and 
Rossello (2014) also identified that a rise in tourist stock added the greenhouse gas emissions in Spain 
and adversely affected the air concentration level with a 0.45% magnitude in PM10 concentration levels 
through the entrance of each vacationer. Solarin (2014) examined the cointegration and causality of the 
macroeconomic factors using a multivariate framework that included GDP, energy utilization, financial 

inclusion, and urbanization. Remarkably, their findings revealed that tourist inflows increased pollution 
but did not adequately improve the GDP. Moreover, Katircioglu (2014) found that tourist entrances had 
a substantial negative impact on CO2 emission both in the short term and long-term and also confirmed 
the Environmental Kuznets Curve hypothesis in Singapore taking the data of energy resources, 
urbanization, CO2 Emission, and industrialization with the help of Granger Causality test. A similar 
investigation was carried out by Lee and Brahmasrene (2013) in European Union Countries to analyze 
long-run equilibrium relationship through panel cointegration techniques and fixed-effects models and 
found a negatively significant impact of FDI and tourism on CO2 emissions from 1988 to 2009. 
 

Furthermore, Ozturk, Al-Mulali, and Saboori (2016) used panel data of 144 countries over 



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twenty years and employed the system panel generalized method of moments (GMM) and time series 
GMM to investigate the environmental Kuznets curve (EKC) hypothesis. The researchers took the data 
on ecological footprint, trade openness, energy consumption, GDP growth from tourism, and 

urbanization and found an indirect link between tourism growth and the ecological footprint among 
upper-middle and high-income countries. Another study conducted by Habibullah et al. (2016) took the 
data of international tourist arrivals in 141 countries and investigated their impact on biodiversity using 
numbers of threatened mammals, fishes, birds, and plants species as the proxy of biodiversity damage 
and population growth, Per capita Income, crop production, and protected areas as control variables. 
The results of the robust standard error estimator discovered biodiversity was negatively affected by 
tourist arrival and positively affect by the GDP per capita with the suggestions to protect the 
biodiversity to sustain the businesses of tourism. Moreover, France, America, Spain, Italy, the United 
Kingdom, Mexico, Germany, Thailand, Austria, and China being top tourist nations were selected by 
Katircioglu, Gokmenoglu, & Eren (2018) taking panel data from 1995โ€“2014 to analyze the tourism-
induced environmental Kuznets curve. The panel regression analysis supported that Tourism 
development exerted an adverse impact on the levels of ecological footprints and improved impact on 

the levels of environmental quality confirming the inverted U-shape of the environmental Kuznets 
curve. 

 
Various econometric models of panel and time-series data have been used to investigate the 

dynamic relationship between trade openness and carbon dioxide emissions. Shahbaz et al. (2018) 
investigated the variables that contribute to CO2 emission in Japan from 1970 to 2014 employing the 
ARDL model and identified that energy consumption, economic growth, and Globalization significantly 
contributed to carbon emissions. Similarly, a panel data analysis for 36 Sub-Saharan African countries 

from 1990 to 2013 was conducted by Twerefou et al. (2017) using the system General Method of 
Moments estimation technique and found that the effects of globalization were outweighed by the 
positive effects of income on environmental quality and sustainability. However, some studies identified 

that globalization deteriorated the harmful effects of greenhouse emissions like Lv and Xu (218) did a 
panel data analysis in 15 developing countries over the period from 1970 to 2012 to examine the 
influence of economic globalization on CO2 emissions and found improvements in environmental 
situations by reducing CO2 emissions in results of globalization. Similarly, a spatial panel data 
econometric model for 83 countries was estimated by You and Lv (2018) to investigate the spatial 
impacts of economic globalization on CO2 emissions. The results supported an inverted-U shaped 
Environmental Kuznets Curve for CO2 emissions and concluded that a relatively high globalized 
country had a relatively encouraging impact on CO2 emissions. 
 

Shakouri et al. (2017) examined the long-run relationship between CO2 emission, energy 
utilization, economic growth, and tourism by estimating Environmental Kuznets Curve hypothesis in 
twelve Asia-Pacific countries from 1995 to 2013. The results indicate an increase in the foreign tourist 

enduring the climate degradation in these countries. Another study (Dogan & Aslan 2017) estimated 
cross-sectional dependence through a heterogeneous panel model on the data of real income, tourism, 
energy utilization, and greenhouse gas emissions of European Union nations. The long-run relationship 
among these variables was confirmed by the LM bootstrap panel cointegration test and although 
tourism and real income diminished the level of CO2 emission the energy consumption contributed to 
climate degradation.  
 

Similarly, the influence of the expenditure on foreign tourist transport, foreign direct 
investment, urban population, energy consumption, and trade openness on per capita income and CO2 
emission from 1995 to 2013 in eleven emerging economies was investigated by Zaman, Moemen, and 



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Islam (2017) employing panel econometric techniques and variance decomposition analysis. Their 
results indicated that CO2 emission had a significant positive relationship with income and tourism. 
Moreover, a new approach called wavelet transform framework that decomposes data into different 

time frequencies used by Raza et al. (2017) and calculated covariance, correlation, continuous power 
spectrum, Granger causality, and coherence spectrum to empirically study the impact of tourism 
development on the degradation of the environment in America taking monthly data between 1996 and 
2015. The results revealed that CO2 emissions increased both in the short run and long run due to the 
development of the tourism industry. Likewise, Sharif, Afshar, & Nisha (2017) employed three 
cointegration methods to examine the time series data of tourist inflows growth and carbon dioxide 
(CO2) emission over 40 years and found a statistically significant impact of tourism on CO2 emission 
through unidirectional causality running from tourist inflows towards climate degradation.    
 
3. Methodology 

This study investigates the asymmetric effect of tourism on carbon pollution for the period 1990-
2019 in the context of Pakistan, India, Nepal, and Sri Lanka by employing the NARDL estimation 

technique and incorporating other control variables such as energy and GDP. This technique is the 
extended version of the ARDL model, which is helpful to inspect the asymmetric and nonlinear linkage 

between tourism and carbon pollution. The model for this analysis is as follows, 
 

๐ถ๐‘‚2,๐‘ก = ๐›ฝ๐‘œ + ๐›ฝ1 ๐‘‡๐‘‚๐‘…๐‘ก  + ๐›ฝ2 ๐ธ๐‘๐‘ก  + ๐›ฝ3 ๐บ๐ท๐‘ƒ๐‘ก  + ั”๐‘ก    (1) 

 
Here, the equation one states that carbon dioxide emissions (๐ถ๐‘‚2) is dependent on international 

tourism (TOR), energy use kilowatt-hour (kwh) per capita (EN), gross domestic product growth annual 
(GDP), and the error term.  Thus, the equation (1) shows a long-run model irrespective of using 
estimation technique, it offers a long-run estimate. To find the short-run and long-run estimates this 
study restructured the equation (1) into a framework of error correction is as follows below equation 

(2)  
 

๐›ฅ๐ถ๐‘‚2,๐‘ก = ๐›ฝ๐‘œ + โˆ‘ ษต๐‘˜
๐‘ 
๐‘˜=1 ๐›ฅ๐ถ02,๐‘กโˆ’๐‘˜ + โˆ‘ ๐œ‹๐‘˜

๐‘ 
๐‘˜=0 ๐›ฅ๐‘‡๐‘‚๐‘…๐‘กโˆ’๐‘˜ + โˆ‘ ๐›ฟ๐‘˜

๐‘ 
๐‘˜=0 ๐›ฅ๐ธ๐‘๐‘กโˆ’๐‘˜ + โˆ‘ ๐œ†๐‘˜

๐‘ 
๐‘˜=0 ๐›ฅ๐บ๐ท๐‘ƒ๐‘กโˆ’๐‘˜ + 

ษ‘1๐ถ๐‘‚2,๐‘กโˆ’1+ ษ‘2๐‘‡๐‘‚๐‘…๐‘กโˆ’1 + ษ‘3๐ธ๐‘๐‘กโˆ’1 + ษ‘4๐บ๐ท๐‘ƒ๐‘กโˆ’1 + ั”๐‘ก             (2) 

 
The equation shows the ARDL model developed by Pesaran et al. (2001). Besides, the coefficients 

with symbols ฮ” inspects the short-run turns out while the coefficients attached with -, have been 
normalized on demonstrating the long-run outcomes. This estimation technique has been very suitable 
because it inspects both long-run and short-run findings only in one equation. Further, this technique is 
also used whether the order of integration I (1), I (0) or mixed order as this technique may take care of 
the integration variable properties.  
 

Next, the primary aim of the investigation is to examine the asymmetric effect of TOR on carbon 
emissions for selected South Asian economies such as Pakistan, India, Nepal, and Sri Lanka. To achieve 
this objective, Shin et al. (2014) proposed method is used it disaggregates the variables into the positive 
or negative components. Thus, the study follows the same procedure and disaggregates the variable 
into a positive ( ๐‘‡๐‘‚๐‘…+) part and negative ( ๐‘‡๐‘‚๐‘…โˆ’) part. 

 
๐‘‡๐‘‚๐‘…๐‘ก

+ = โˆ‘ ๐›ฅ๐‘‡๐‘‚๐‘…๐‘ก
+๐‘ก

๐‘›=1  = โˆ‘ ๐‘š๐‘Ž๐‘ฅ
๐‘ก
๐‘›=1  (๐›ฅ๐‘‡๐‘‚๐‘…๐‘ก

+,0)=    (3) 
 

๐‘‡๐‘‚๐‘…๐‘ก
โˆ’ = โˆ‘ ๐›ฅ๐‘‡๐‘‚๐‘…๐‘ก

โˆ’๐‘ก
๐‘›=1  = โˆ‘ ๐‘š๐‘–๐‘›

๐‘ก
๐‘›=1  (๐›ฅ๐‘‡๐‘‚๐‘…๐‘ก

โˆ’,0)=    (4) 
 



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After disaggregating the variables into positive or negative dynamics then this shock put in 
equation (2) is placed with the standard variables and this equation has taken as a nonlinear form of 
the ARDL model is represented as follows in equation (5) 

 
๐›ฅ๐ถ๐‘‚2,๐‘ก = ๐›ฝ๐‘œ + โˆ‘ ษต๐‘˜

๐‘ 
๐‘˜=1 ๐›ฅ๐ถ02,๐‘กโˆ’๐‘˜ + โˆ‘ ๐œ‹๐‘˜

๐‘ 
๐‘˜=0 ๐›ฅ๐‘‡๐‘‚๐‘…๐‘กโˆ’๐‘˜

+  + โˆ‘ ๊ญ
๐‘˜

๐‘ 
๐‘˜=0 ๐›ฅ๐‘‡๐‘‚๐‘…๐‘กโˆ’๐‘˜

โˆ’  + โˆ‘ ๐›ฟ๐‘˜
๐‘ 
๐‘˜=0 ๐›ฅ๐ธ๐‘๐‘กโˆ’๐‘˜ + 

โˆ‘ ๐œ†๐‘˜
๐‘ 
๐‘˜=0 ๐›ฅ๐บ๐ท๐‘ƒ๐‘กโˆ’๐‘˜ +  ษ‘1๐ถ๐‘‚2,๐‘กโˆ’1+ ษ‘2๐‘‡๐‘‚๐‘…๐‘กโˆ’๐‘˜

+  + ษ‘3๐‘‡๐‘‚๐‘…๐‘กโˆ’๐‘˜
โˆ’  + ษ‘4๐ธ๐‘๐‘กโˆ’1 + ษ‘5๐บ๐ท๐‘ƒ๐‘กโˆ’1 + ั”๐‘ก        (5) 

 
Here, equation (5) demonstrates the non-linear ARDL model developed by Shin et al. (2014). It is 

similar to the traditional ARDL. Besides, non-linear ARDL has various advantages over the outdated 
cointegration estimation models: for instance, firstly, it gives efficient and reliable results even in the 
case the sample size is small. Secondly, the stationarity test is optional because it is applicable whether 
the order of integration is I (1), I (0), or both except I (2). Lastly, its finding is effective even in the case 
of the concerned variable order is I (1), 1(0), or both. After the estimation of equation (5), this study 
applied various diagnostic tests, for instance, the Wald test to examine the presence of asymmetric 
impact of variables both in the short-run and long-run. Besides. In the short tun, the Wald test validates 

the existence of asymmetric impact as โˆ‘ โ‰ ๐‘˜  โˆ‘ ๐œ‹๐‘˜  while the long-run asymmetric effect has been 

confirmed by the Wald test in the case of  
ษ‘2

+

ษ‘1
โ„  โ‰  

ษ‘3
โˆ’

ษ‘1
โ„ . 

 
4. Data 

For empirical analysis, this study used annual data set over the period 1990-2019 in the context 
of concerned South Asian economies, for instance, Pakistan, India, Nepal, and, Sri Lanka. These South 
Asian economies have been selected based on the reason for a well-organized and experienced tourism 
sector and revealed a substantial positive effect on carbon dioxide emissions. Moreover, data of the 
selected variables have been taken from World Development Indicators. In our analysis, carbon dioxide 
emissions are a dependent variable while tourism is an independent variable. We also incorporate two 
control variables namely energy use and GDP. Besides, the variables description details and symbols are 

offered in table 1. The descriptive statistics demonstrate that India has the highest mean value of carbon 
emissions per capita 1.211 annually on the contrary Nepal has the lowest carbon emissions value is 
0.152. However, has the top rank in emitting carbon polluting in the South Asian region. Further, the 
tourism and energy consumption average values for India are 6.639, and 2.662 while the average values 
lowest for Nepal are 5.696, and 1.873. The mean value of GDP growth per capita is 1.661 lowest for 
Pakistan and the highest in the case of India is 4.621. 

 

 
Table 1.  Explanation and Definition of the Selected Variables 

Variables Symbol Definition Data Source 

International tourism REM International tourism, number of arrival 

person  

WDI 

Electric power consumption EN Electric power consumption (kwh per 
capita) 

WDI 

Gross domestic product GDP GDP per capita growth (annual %) WDI 

Carbon dioxide emissions  ๐ถ๐‘‚2  ๐ถ๐‘‚2  emissions (metric tons per capita) WDI 

 
 
 
 
 



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Table 2. Descriptive Statistics  

  CO2 TOR EN GDP 

Pakistan  
    

Mean 0.829 5.815 2.601 1.661 

Std. dev. o.128 0.195 0.069 1.799 

India 
    

Mean 1.211 6.639 2.662 4.621 

Std. dev. 0.374 0.312 0.152 1.984 

Nepal 
    

Mean 0.152 5.697 1.873 3.083 

Std. dev. 0.077 0.161 0.208 1.865 

Sri Lanka 
    

Mean 0.602 5.801 2.506 4.327 

Std. dev. 0.241 0.277 0.193 2.115 

 
5. Empirical results  
5.1 Outcomes of Unit Root Analysis 

The first step toward the empirical analysis is to check the order of integration of the selected 
variables. Therefore, to examine the stationarity of the variables, the study used the ADF test and 
Phillip-Perron Test. The results obtained from these tests are presented in Table 3. As described earlier, 
four variables have been taken for the empirical analysis of four countries. According to the results of 
both tests, CO2 emissions and the number of arrivals of international tourists to Pakistan are stationary 
at first difference while energy consumption and GDP per capita are stationary at level. In the case of 
India, the variable of CO2 emissions and energy consumption have integration order one whereas GDP 
per capita is stationary at order zero. However, the ADF test advocates that the number of international 

touristsโ€™ arrival series is I (0) but the Phillip-Perron test is in favor of I(1). All selected variables of Nepal 
are stationary at first difference except GDP per capita which has I(0). Similar to Pakistanโ€™s data, CO2 
emissions and the number of arrivals of international tourists in Sri Lanka are stationary at first 
difference while energy consumption and GDP per capita are stationary at level. 
 
 

Table 3. Results of the unit root tests  

Country 
Variables 
  

ADF Test Phillip-Perron Test 

I (0) I (1) Decision I (0) I (1) Decision 

Pakistan CO2 -0.015 -1.178*** I (1) -0.015 -0.094** I (1) 

 TOT -0.018 -1.092*** I (1) -0.018 -1.092*** I (1) 

 EN -0.093** 
 

I (0) -0.093* 
 

I (0) 

 GDP -0.0.643*** 
 

I (0) -1.256*** 
 

I (0) 

India CO2 0.005 -0.959*** I (1) 0.007 -0.959*** I (1) 

 TOR -0.182** 
 

I (0) -0.009 -1.006*** I (1) 

 EN -0.019 -0.810*** I (1) -0.019 -0.810*** I (1) 

 GDP -0.739*** 
 

I (0) -0.739*** 
 

I (0) 

Nepal CO2 -0.041 -1.578*** I (1) -0.100 -1.578*** I (1) 

 TOR -0.094 -1007*** I (1) -0.094 -1.007*** I (1) 

 EN -0.017 -1.074*** I (1) -0.017 -1.074*** I (1) 

 GDP -0.957*** 
 

I (0) -0.957*** 
 

I (0) 



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Sri Lanka CO2 0.028 -1.228*** I (1) -0.028 -1.225*** I (1) 

 TOR -0.046 -0.695*** I (1) -0.002 -0.695*** I (1) 

 EN -0.090*** 
 

I (0) -0.032** 
 

I (0) 

 GDP -0.759*** 
 

I (0) -0.759*** 
 

I (0) 

Note: *, **, and *** show 10%, 5%, and 1% level of significance. 

 
4.2 Asymmetric effect of tourism on CO2 emissions based on NARDL 

Outcomes of NARDL for Pakistan 
The asymmetric effects of tourism on CO2 emissions are examined with the help of the non-

linear ARDL technique. For Pakistan, the results of NARDL are given in Table 4. The short-run estimates 
of NARDL depict that an increase in the number of international tourists raises CO2 emissions. 
Similarly, energy consumption and GDP per capita also have a direct relationship with CO2 emissions. 
Moreover, a positive shock in the number of tourists arrival has statistically insignificant positive effects 
on carbon emissions whereas a negative shock has a statistically significant positive effect on CO2 
emission which reveals that tourism considerably contributes to greenhouse gas emissions in Pakistan.  

 

Panel B of Table 4 shows the long-run estimation of NARDL for Pakistan. A positive shock in 
tourist arrival has a substantial positive effect on CO2 emissions and a partial sum of negative change in 
international travelers in Pakistan declines CO2 emissions. In other words, a one percent increase 
(decrease) in international tourists in Pakistan 0.077 percent (-0.130) increase in carbon emission. The 
diagnostics of NARDL given in panel C show that the overall model is statistically significant as F-stats 
are highly significant and adjusted R-square about 98 percent. Moreover, the Wald tests for short-run 
and long-run coefficients of tourism variables are also statistically significant. Furthermore, the value of 

the error correction term is not only negative but also statistically reliable states that a shock in the 
short run will annually converge to its long-run equilibrium with the speed of 0.73 percent. 
 

Table 4: NARDL coefficient estimates in Pakistan 

Variables Coefficient Std. Error t-Statistic 

Panel A: Short-run estimates 
ฮ”TORt 0.091*** 0.020 -4.550 

ฮ”TOR๐‘ก
+ 0.136 0.088 -1.539 

ฮ”TOR๐‘ก
โˆ’ 0.095*** 0.030 -3.166 

ฮ”TORtโˆ’1 
   

ฮ”ENt 0.348*** 0.082 4.243 
ฮ”GDPt 0.006*** 0.001 4.800 

ฮ”GDPt-1 0.002 0.002 0.975 

Panel B: Long-run estimates 

TOR๐‘ก
+

 0.077*** 0.026 2.961 
๐‘‡๐‘‚๐‘…๐‘ก

โˆ’
 -0.130*** 0.060 -2.167 

๐ธ๐‘t 1.826*** 0.404 4.518 
๐บ๐ท๐‘ƒt 0.009*** 0.003 2.812 

C -3.917*** 1.022 -3.830 

Panel C: Diagnostic tests 

F-test 10.803*** 
  

ECM -0.730*** 0.143 -5.094 

LM test 0.0762 
  

RESET 1.505 
  



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63 
 

Adj-R2 0.986 
  

CUSUM S 
  

CUSUM squares S   

WALD SR-TOR 2.876** 
 

WALD LR-TOR 3.984*** 
 

Note: *, **, and *** show 10%, 5%, and 1% level of significant, respectively. 
 
4.3 Outcomes of NARDL for India 

The estimates for the asymmetric impact of the tourism industry on environmental degradation 
in India based on NARDL are presented in Table 5. Similar to the estimates of Pakistan, CO2 emissions 
increase with an increase in international tourists in the country in the short run. As for as the long run 
results are concerned, a partial sum of positive shocks raises, and a partial sum of negative shocks 
reduces the CO2 emission. Moreover, the magnitude of positive shock is greater than negative shock 
revealing that a one percent increase (decrease) in international travelers in India would cause to surge 
of 0.458 percent (-0.283) fatal gas. Similarly, a one percent increase in energy consumption and GDP 

per capita also rise CO2 emissions by 0.035 and 0.011 percent respectively. 

 
F-stat of the model advocates the significance of the model with a high value of adjusted R-

square. Furthermore, the Wald test describes that short-run and long-run estimations for tourism are 
statistically reliable. Besides, the estimated value of ECM is also statistically negative and significant 
with 0.232 magnitude of the speed of convergence towards long-run equilibrium. 
 

Table 5: NARDL coefficient estimates in India  
Coefficient Std. Error t-Statistic 

Panel A: Short-run estimates 
ฮ”TORt 0.106*** 0.141 -2.439 

ฮ”TOR๐‘ก
+ 

   

ฮ”TOR๐‘ก
โˆ’ 0.077 0.061 1.256 

ฮ”TORt 
   

ฮ”TORtโˆ’1 
   

ฮ”ENt 0.002 0.001 1.532 
ฮ”GDPt -0.001 0.001 -1.332 

ฮ”GDPt-1 0.002 0.002 0.975 

Panel B: Long-run estimates 
๐‘‡๐‘‚๐‘…t 0.458*** 0.190 2.410 
๐‘‡๐‘‚๐‘…๐‘ก

โˆ’
 -0.283*** -0.032 -8.611 

๐ธ๐‘t 0.035** 0.019 1.856 
๐บ๐ท๐‘ƒt 0.011* 0.006 1.833 

C -0.196 0.220 -0.891 

Panel C: Diagnostic tests 

F-test 6.205*** 
  

ECM -0.232*** -0.093 -2.475 

LM test 1.350 
  

RESET 0.085 
  

Adj-R2 0.992 
  

CUSUM S 
  

CUSUM squares S   



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64 
 

WALD SR-TOR 3.384** 
 

WALD LR-TOR 7.386*** 
 

Note: *, **, and *** show 10%, 5%, and 1% level of significant, respectively. 

 
4.4 Outcomes of NARDL for Nepal 

Estimates of the NARDL model for Nepal are given in Table 6. International tourists and 
degradation of the environment are directly related in the short run with a magnitude of 0.093. 
Moreover, a negative shock in tourism causes to increase in carbon emissions in the short run. 
Furthermore, GDP per capita and energy consumption are significant sources of greenhouse gas 
emissions in the short-run as well as in long run. Similarly, a partial sum of both positive and negative 
shocks contributes to polluting the environment in long run. 
 

As for as the significance of the model is concerned F-test is highly significant and Wald tests for 
short-run and long-run tourism coefficients are acknowledged that the estimates coefficients are 
different from zero. Besides, the value of the adjusted R-square is very high. Moreover, the estimated 

value of the error correction term is not only negative but also statistically significant depicting the 

model converges towards its long-run equilibrium with the annual speed of 0.44 percent if any shock 
occurs during the short run.    

 

Table 6: NARDL coefficient estimates in Nepal 

Variables Coefficient Std. Error t-Statistic 

Panel A: Short-run estimates 
ฮ”TORt 0.093*** 0.029 3.206 

ฮ”TOR๐‘ก
+ 

   

ฮ”TOR๐‘ก
โˆ’ 0.357*** 0.093 3.09 

ฮ”TORtโˆ’1 -0.528*** 0.176 -2.991 
ฮ”ENt 0.036*** 0.013 2.769 
ฮ”GDPt 0.008*** 0.003 2.34 

ฮ”GDPt-1 0.008*** 0.002 2.849 

Panel B: Long-run estimates 

ฮ”TOR๐‘ก
+

 0.212* 0.110 1.927 
TOR๐‘ก

โˆ’ 0.370* 0.194 1.909 
๐ธ๐‘t 0.081*** 0.017 4.764 
๐บ๐ท๐‘ƒt 0.060* 0.033 1.793 

C -0.196 0.220 -0.891 

Panel C: Diagnostic tests 

F-test 7.169*** 
  

ECM -.0.440*** 0.183 -2.400 

LM test 1.374 
  

RESET 0.724 
  

Adj-R2 0.943 
  

CUSUM S 
  

CUSUM squares S   

WALD SR-URB  10.890** 
 

WALD LR-URB 15.032*** 
 

Note: *, **, and *** show 10%, 5%, and 1% level of significant, respectively. 
 



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65 
 

 
4.5 Outcomes of NARDL for Sri Lanka 

Almost all estimated coefficients are statistically insignificant except for positive and negative 

shock in short-run results presented in panel A of Table 7. Positive shock and negative shock in tourism 
demonstrate a direct impact on CO2 emissions with 0.513 and 0.093 magnitudes respectively in the 
short-run in Sri Lanka. A similar trend of these shocks could be observed from panel B in long run. 
Nevertheless, energy consumption and GDP per capita are significant elements of environmental 
degradation in long run.  
 

Similar to the results of previous countries, the F-stats of the model and Wald tests of short-run 
and long-run coefficients of tourism are statistically meaningful. Besides, adjusted R-square states that 
around 94 percent of the variation in CO2 emission is explained by regressors. Moreover, estimated 
ECM is negative and significant advocates the convergence model. 

 

Table 7: NARDL coefficient estimates in Sri Lanka 

Variables Coefficient Std. Error t-Statistic 

Panel A: Short-run estimates 
ฮ”TORt 0.020 0.266 0.077 

ฮ”TOR๐‘ก
+ 0.513* 0.286 1.792 

ฮ”TOR๐‘ก
โˆ’

 -0.093*** 0.016 -5.812 
ฮ”TORtโˆ’1 

   

ฮ”ENt 0.358 0.394 0.909 
ฮ”GDPt 0.005 0.002 2.380 

ฮ”GDPt-1 
   

Panel B: Long-run estimates 

TOR๐‘ก
+ 0.306*** 0.121 2.522 

TOR๐‘ก
โˆ’ -0.283** 0.061 -1.934 

๐ธ๐‘t 0.455*** 0.211 2.156 
๐บ๐ท๐‘ƒt 0.021** 0.009 2.131 

C -0.614 1.044 -0.588 

Panel C: Diagnostic tests 

F-test 7.809*** 
  

ECM -0.787*** 0.211 -3.730 

LM test 1.358 
  

RESET 0.857 
  

Adj-R2 0.942 
  

CUSUM S 
  

CUSUM squares S   

WALD SR-URB  2.987** 
 

WALD LR-URB 12.409*** 
 

Note: *, **, and *** show 10%, 5%, and 1% level of significant, respectively. 
 
4.6 Asymmetric causality among four selected variables  

In Pakistan, unidirectional ono-linear causality exists from touristsโ€™ arrival to CO2 emission and 
from tourism to GDP per capita. Moreover, bidirectional asymmetric causality also exists between 
energy consumption and tourism. From energy consumption to CO2 emission, from GDP per capita to 
CO2 emission, and from GDP per capita to energy consumption non-linear causality exist in India as 



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66 
 

estimated from the test. Furthermore, bidirectional asymmetric causality exists between tourism and 
CO2 emission, and energy consumption and tourism.  
 

Non-linear causality is observed from energy consumption to tourism and energy consumption 
to GDP per capita in Nepal. Similarly, tourism and CO2 emission, GDP and CO2 emission, and GDP per 
capita and tourism have significant bidirectional causality. Results of asymmetric causality among the 
variables of Sri Lanka demonstrate that unidirectional non-linear causality exists from energy 
consumption to CO2 emission, GDP per capita to CO2 emission, and GDP per capita to energy 
consumption. Besides, bidirectional asymmetric exists between tourism and CO2 emission, and energy 
consumption and tourism in Sri Lanka. 

 

Table 8: Results of Symmetric Causality Test   

 Null Hypothesis: Pakistan India Nepal Sri Lanka 

๐‘‡๐‘‚๐‘…t
+
โž”CO2 Yes Yes Yes Yes 

CO2โž”๐‘‡๐‘‚๐‘…t
+ No Yes Yes Yes 

๐‘‡๐‘‚๐ธt
โˆ’

 โž”CO2 No Yes No Yes 

CO2โž”๐‘‡๐‘‚๐‘…t
โˆ’

  No Yes Yes Yes 

EN โž”CO2 No Yes No Yes 

CO2 โž”EN No No No No 

GDPโž”CO2 No Yes Yes Yes 

CO2โž”GDP No No Yes No 

ENโž”๐‘‡๐‘‚๐‘…t
+ Yes Yes Yes Yes 

TOR+โž”EN Yes Yes No Yes 

GDPโž” ๐‘‡๐‘‚๐‘…t
+ No No Yes No 

๐‘‡๐‘‚๐‘…t
+
โž”GDP Yes No Yes No 

๐ธ๐‘ โž”๐‘‡๐‘‚๐‘…t
โˆ’

  Yes Yes Yes Yes 

๐‘‡๐‘‚๐‘…t
โˆ’ โž”๐ธ๐‘ Yes Yes No Yes 

๐บ๐ท๐‘ƒโž”๐‘‡๐‘‚๐‘…t
โˆ’  No No Yes No 

๐‘‡๐‘‚๐‘…t
โˆ’

 โž”๐บ๐ท๐‘ƒ No No No No 

GDPโž”๐ธ๐‘ No Yes No Yes 

ENโž”GDP No No Yes No 

 



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67 
 

5. Resultsโ€™ Discussion 
The asymmetric effect of tourism on CO2 emissions in Pakistan, India, Nepal, and Sri Lanka is 

investigated in the study employing a non-linear ARDL model. The short-run estimated coefficients of 
the models show that number of international tourist arrival has a direct proportion to CO2 emissions 
in Pakistan, India, Nepal, and Sri Lanka with the magnitude of 0.091, 0.106, 0.093, and 0.020 
respectively. Moreover, long-run results reveal that partial sum of positive shock in touristโ€™ arrival 

contributes positively and partial sum of negative shock in touristโ€™ arrival contributes negatively to CO2 
emission in Pakistan, India, and Sri Lanka whereas in Nepal both shocks contribute positively to CO2 
emissions. Apart from that examination of the causality revealed two-way causality between tourism 
and environmental degradation exists in India, Nepal, and Sri Lanka while unidirectional causality 
exists from tourism to CO2 emission in Pakistan. The outcome of the study is supported by Saenz-de-
Miera and Rossello (2014) who identified that a rise in tourist stock added the greenhouse gas 

emissions in Spain and adversely affected the air concentration level and Katircioglu (2014) found that 
tourist entrances had a substantial negative impact on CO2 emission both in the short term and long-
term in Singapore. Furthermore, a study in European Union Countries identified a negatively 
significant impact of tourism on CO2 emissions (Lee & Brahmasrene 2013). 
 

Energy consumption also contributes to polluting the environment. For Pakistan and Nepal, the 
estimated coefficients of energy consumption are positive in sign and statistically significant both in the 

short-run and long-run, however, this coefficient is only significant in long run for India and Sri Lanka, 
revealing that increase in energy consumption considerably reduced environment quality of the selected 
countries. Moreover, energy consumption has bidirectional causality with tourism in Pakistan and India 

Pakistan India 

Nepal Sri Lanka 

Figure 1: Asymmetric Plots  



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68 
 

whereas it has unidirectional causality from energy consumption to CO2 emission in India. In Nepal, 
energy consumption has a unidirectional relationship from energy consumption to tourism and GDP 
per capita. Similarly, in Sri Lanka, energy consumption depicts two-way causality with tourism and 

unidirectional causality with CO2 emission and GDP per capita. These outcomes are consistent with 
Shahbaz et al. (2018) identified that energy consumption significantly contributed to carbon emissions 
using the ARDL approach in Japan. Moreover, Dogan and Aslan (2017) employed the LM bootstrap 
panel cointegration test and confirmed that although tourism and real income diminished the level of 
CO2 emission, the energy consumption contributed to climate degradation.  
 

As ECK illustrates that being a developing country CO2 emission/environmental degradation 
increases with the increase in national income. Because Pakistan, India, Nepal, and Sri Lanka are 
developing nations, most of the estimated coefficients of GDP per are positive and statistically 
significant advocating the EKC phenomenon.   
 
6. Conclusion and Policy Implications 

The primary objective of this study is to inspect the effect of TOR on carbon emissions for the 
period 1990-2019 by employing nonlinear ARDL for the five SA economies. The empirical finding 

depicts that TOR infers a nonlinear relationship with carbon emissions. The NARDL results revealed 
that positive shock in TOR has a statistically significant and considerable impact on carbon emissions in 
the considered SA nations, i.e., PAK, SL, NEP, and IND.  
 

At the same time, negative shocks in TOR show a substantial and negative influence on carbon 
emissions in SA economies in the long run. Thus, it highlights a 1% increase (decrease) in TOR could be 

0.077% (0.130%) emissions in PAK, approximately 0.458% (0.283%) in IND, 0.212% (0.370%) in 
NEP, and 0.306% (0.283%) in SL, respectively. Also, the short-run nonlinear turnout shows a 
significant effect of TOR on carbon emissions. The results demonstrate that positive fluctuations in TOR 

positively impact carbon emissions in PAK, IND, and NEP except for SL. On the contrary, negative 
fluctuations in TOR also badly affect environmental pollution in the short run in PAK and NEP.  
 

This paper concludes that SA countries need to use clean production technologies in their 
economic growth strategy. To mitigate environmental degradation, they should increase the percentage 
of renewable energy in their fuel mix relative to non-renewable energy. Because tourism harms 
environmental degradation, SA countries may need to exercise sustainable tourism to reap the benefits 
without jeopardizing environmental quality. According to our findings, the governments of PAK, IND, 
NEP, and SL should encourage and persuade foreign investors the investment in green and clean energy 
schemes to upsurge environmental quality through invention and innovation. Moreover, policymakers 
of these nations may improve the long-term quality of ecological health by implementing environmental 
laws. 

 
Moreover, these countries should take advantage of developed countries' transportation and 

construction incentives. Long-term transportation and infrastructure policies in Nepal and Sri Lanka 
should be redesigned. In addition, well-defined transportation and construction rules in tourism regions 
may be adopted to improve environmental quality. There are significant differences between developed 
and South Asian countries regarding social, economic, institutional, infrastructure, human capital, 
technological, and ecological awareness (Chan et al., 2018). As a result, the tourism industry in South 
Asia and other developing countries should formulate a comprehensive plan to develop environment-
friendly touristry products based on the innovation produced by the developed economies. 
 



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69 
 

Furthermore, the most effective strategy to prevent pollution in tourist zones is to use green 
energy. By reducing environmental pollution, SA economies could improve their tourism sectors. The 
South Asian region has the potential to import and use environment-friendly tourist products currently 

being practiced in developed countries to contain greenhouse emissions. This study generated a 
potential conclusion based on various quantiles that could be studied further in the future. Future 
studies can focus on environmental contamination asymmetries and discrepancies in South Asian 
countries, which may be assessed using macroeconomic indicators. 
 
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