Redesigning Sustainability: How Renewable Energy and Eco- Innovation Shape Ecological Footprints in Leading Tourist Destinations

Abstract

This study investigates the environmental determinants of ecological footprint in the top 25 tourist destination countries. The primary objective is to assess how renewable energy consumption, green growth, environmental innovation, and financial development influence ecological sustainability. Using annual data from 2002 to 2022, the study applies second-generation econometric techniques, including DSUR, CUP-FM, CUP-BC estimators, and Dumitrescu-Hurlin panel causality tests to account for cross-sectional dependence and heterogeneity. Results confirm that renewable energy consumption, green growth, and environmental innovation significantly reduce the ecological footprint, while financial development has a detrimental effect. Bidirectional causality exists between the ecological footprint and key predictors, except financial development, which shows a unidirectional link. The findings validate the Environmental Kuznets Curve (EKC) hypothesis. The study’s novelty lies in its focus on tourism-intensive economies and the integration of innovation and green policy variables into an ecological footprint framework, which remains limited in prior research. It contributes methodologically by applying robust second-generation estimators. Policy recommendations include enhancing investment in clean energy, promoting green innovation, and integrating sustainability into financial decision-making to align tourism growth with ecological resilience.