Tourism, green energy, and environmental taxation effects on carbon emissions in OECD countries

The effectiveness of environmental taxation and renewable energy deployment in mitigating carbon emissions remains a central concern in energy and sustainability policy. This study examines how tourism-driven energy demand interacts with green energy consumption and environmental taxation to influence carbon emissions across 36 OECD countries from 1980 to 2018. Using Bayesian Model Averaging and Weighted-Average Least Squares, the analysis explicitly addresses model uncertainty in long-run energy–environment relationships. The results indicate that tourism expansion significantly increases carbon emissions, reflecting its energy-intensive nature. Environmental taxes, when considered in isolation, do not consistently reduce emissions across OECD countries, largely because of tax exemptions and uneven enforcement. However, the interaction between tourism activity and environmental taxation reveals that well-designed fiscal instruments can mitigate tourism-induced emissions. Moreover, environmental taxes are found to be effective in reducing emissions in high-income OECD economies, while their impact remains insignificant in upper-middle-income countries. Renewable energy consumption consistently contributes to emission reductions. These findings underscore the importance of integrating environmental taxation with energy-transition policies and renewable energy investment. The study provides policy-relevant insights for designing effective carbon mitigation strategies that align fiscal instruments with long-term sustainability and energy-transition objectives.