How Does Tourism Development Shape Carbon Emissions in the Long-Run? An Empirical Investigation for Western Balkan Economies

Tourism, despite being popularly regarded as a leisure activity, is shaped by a complex set of influencing factors and itself generates complex consequences—economic, societal, and environmental. The interaction between economic growth, tourism, and the environment is a crucial policy challenge for transitional economies striving to achieve sustainable development. This paper analyzes the impact of income, international tourism receipts, and energy use on CO2 emissions as a proxy for environmental deterioration for five Western Balkan economies over the period of 2007–2022. The empirical investigation is conducted following the Autoregressive Distributed Lag (ARDL)—Pooled Mean Group (PMG) approach, favoring a long-run relationship among all the variables with a moderate convergence towards the long-run equilibrium. Tourism development and energy use are significantly and positively associated with carbon emissions in the region, with energy use emerging as the most robust long-run driver of emissions. The results do not support the conventional Environmental Kuznets Curve (EKC). Instead, a U-shaped income–emissions relationship is found, with income levels in all the five economies lying above the corresponding thresholds implied by the common long-run relationship by the end of the sample period. These results call for urgent policy action towards sustainable tourism development and energy transition in the Western Balkan countries.