Economic Growth and Environmental Quality: Stylist Facts and Environmental Kuznets Curve : Case of Tunisia

In this paper we studied the link between economic growth and the environment. We discussed the inverse U-shaped relationship between environmental pollutants and economic growth. First, we analyzed the long-term observation of the growth of CO2 emissions which is characterized by three phases. Second, we estimated the EKC curve for Tunisia. The results of our estimates revealed a problem of autocorrelation of errors which we solved by using the Cochran-Orcutt method. The model was corrected for ρ = 0.4. In addition, we noticed that the Durbin-Watson model without the dummy variable is better than the model that incorporates the dummy variable. This finding confirmed the existence of an inverted U-shaped CEK. Our results show that the country has not yet reached the threshold of development from which economic growth is accompanied by a reduction of pollutant emissions. More precisely, the value of GDP* is $2062,647 which is much lower than the $8,000 found by Seldon and Song (1994) characterizing the reversal point of the inverted U curve. Tunisia is therefore in the phase where an increase in GDP is accompanied by a deterioration of the environment.