Tourism Development, Governance and CO₂ Emissions in 28‐EU Countries

ABSTRACT Although several studies have assessed the influence of tourism on CO 2 emissions, the moderating impact of governance quality on the tourism‐CO 2 emissions nexus is quite sparse. To fill this gap in the literature, this study examines the moderating effect of governance quality on the tourism‐CO 2 emissions nexus in 28 European Union countries over the period 2004–2019. To achieve this goal, the dynamic ordinary least squares (DOLS) estimation technique is used. The results show that tourism has a significant positive impact on CO 2 emissions. This implies that as tourism increases, CO 2 emissions also increase. Moreover, the impact of governance quality on CO 2 emissions is negative and statistically significant. This indicates that an improvement in governance quality could contribute to lessen CO 2 emissions. Interestingly, the results reveal that the interaction term of tourism and governance quality has a significant negative impact on CO 2 emissions. This implies that governance quality matters for tourism to promote environmental quality.