Effects of institutional quality, agriculture, and industry on CO2 emissions in Tunisia: Evidence from an ARDL approach

This paper investigates the impact of institutional quality, the agricultural and industrial sectors, as well as renewable and non-renewable energy consumption on CO2 emissions in Tunisia, while accounting for institutional challenges and the energy transition. Using the Autoregressive Distributed Lag (ARDL) bounds testing approach for the period 1996-2023, the analysis explores the linear relationships between these variables and CO2 emissions, incorporating the evolution of the country?s economic and energy policies. The results show that, in the long term, non-renewable energy consumption and industrial added value significantly contribute to the increase in CO2 emissions, whereas institutional quality plays a moderating role by influencing the trajectory of emissions. This suggests that improvements in governance and institutional frameworks could be instrumental in reducing CO2 emissions. In the short term, non-renewable energy consumption, industrial added value, and agriculture emerge as key drivers of rising emissions, although institutional quality acts as a stabilizer, mitigating fluctuations and facilitating adjustments to past imbalances. This study highlights the complex interactions among institutional, economic, and energy policies and their effects on the environment, emphasizing the importance of strengthening institutions to support a sustainable energy transition.