Causality relationship between CO₂ emissions, GDP and energy intensity in Tunisia

Ben Mbarek, Mounir; Ben Ali, Nadia; Feki, Rochdi

Causality relationship between CO₂ emissions, GDP and energy intensity in Tunisia

2014

Ben Mbarek, Mounir | Ben Ali, Nadia | Feki, Rochdi

This article analyzes the causality between the economic growth, the energy and the environment, measured by CO₂ emissions. Our empirical study is based on a series of annual data from 1980 to 2010 in Tunisia. Our study was conducted using the Granger causality test and variance decomposition. The empirical results confirm the presence of a positive effect between the energy consumption and the economic growth measured by gross domestic product (GDP). Thus, there is a unidirectional relationship between GDP and CO₂ emissions in the short term. This analysis shows, as is common to relatively fast-growing economies in Tunisia, that the biggest contributor to the rise is CO₂ emissions. Hence, in congruence with the result of variance decomposition, the GDP affects CO₂ emissions in the short and medium term at an almost constant level (10 %). The non-renewable energy intensity in Tunisian economy is responsible for a modest reduction in CO₂ emissions, which suggests the implementation of conservation policies aimed at energy efficiency and the orientation toward renewable energy.

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