The carbon dioxide emission effects of trade openness and tourism: Can renewable energy moderate their impact?

Abstract

Introduction Globalisation has accelerated international trade and tourism, both of which have complex implications for environmental sustainability, particularly carbon dioxide (CO₂) emissions. While trade expansion may intensify pollution, tourism can either exacerbate or mitigate environmental degradation depending on structural and policy contexts. This study examines the effects of trade openness and tourism on CO₂ emissions in seven of Africa’s most-visited economies—Egypt, Tunisia, Kenya, South Africa, Zimbabwe, Ivory Coast, and Morocco—from 1995 to 2021, incorporating renewable energy as a moderating factor. Methods Grounded in Green Economics, the Pollution Haven/Halo Hypothesis, the Environmental Kuznets Curve, and Energy Transition Theory, the study formulates five testable hypotheses linking trade, tourism, renewable energy, and emissions. It employs panel quantile regression to capture heterogeneous effects across different points in the emissions distribution, enabling nuanced analysis beyond mean-based estimates. Results The findings reveal that trade openness increases CO₂ emissions across all quantiles, supporting the Pollution Haven Hypothesis. Tourism receipts are associated with reduced emissions across most quantiles, suggesting the influence of Africa’s ecotourism orientation and conservation-linked reinvestment. However, this result should be interpreted cautiously due to measurement limitations. Renewable energy consistently and significantly reduces emissions across the distribution. Importantly, renewable energy moderates both relationships: it weakens and, at higher quantiles, reverses the emissions impact of trade, while amplifying tourism’s emissions-reducing effect in low- to middle-emission contexts. Discussion These results underscore the critical role of renewable energy in mitigating the environmental impacts of trade and enhancing the sustainability benefits of tourism. The findings support differentiated policy approaches that prioritise scaling up renewable energy, particularly in high-emission contexts, while leveraging tourism revenues for environmental conservation. Such strategies are essential for advancing low-carbon development pathways in Africa’s tourism-dependent economies.