Revisiting Sustainable Development in OECD Economies: The Role of Tourism and Energy Transition

ABSTRACT

This study examines the relationship between tourism and sustainable development in a panel of 19 OECD countries, with a particular focus on the role of renewable energy adoption in promoting sustainable development. Moreover, this study examines the impact of tourism on sub‐indicators of sustainable development, such as development, CO ₂ emissions, and material footprint. The analysis uses the panel data from 19 OECD countries over the period 1995–2020. We employ a quantile regression approach, which estimates the coefficients at various levels of the Sustainable Development Index. The analysis proceeds in two stages. First, we examine the impact of tourism on sustainable development. Second, we assess its effects on the sub‐components of sustainable development, such as development, CO ₂ emissions, and material footprint. In doing so, it moves beyond single‐indicator approaches and evaluates tourism through an explicitly ecological‐efficiency lens. Unlike existing studies that mainly investigate either the economic benefits or environmental impacts of tourism, our study uses a multidimensional index of sustainable development, which captures education, health, income, CO ₂ emissions, and material footprint. We find that tourism, in isolation, negatively affects sustainable development in the selected OECD countries. However, a greener energy mix alters the relationship between tourism and sustainable development. The results suggest that the positive contribution of tourism to sustainable development is stronger in countries with higher shares of renewable energy. There is a need to promote renewable energy use alongside tourism growth. OECD countries need to enhance the sustainability benefits associated with tourism development.