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Trade Openness and CO2 Emissions in Tunisia


  • Houssem Eddine Chebbi

    () (Faculty of Economic Sciences and Management of Nabeul (FSEGN), Tunisia.)

  • Marcelo Olarreaga
  • Habib Zitouna


The literature on trade often focuses on its impact on economic growth. However, more recently attention has been paid to the impact of openness on other important aspects of individual welfare, such as the environment. Because openness affects economic activity it will also affect pollution levels. But changes in economic activity also imply changes in the levels of income per capita which may lead to changes in the demand for environmental standards. Moreover, trade will affect pollution levels directly through its impact on the composition of the production bundle, as resources get reallocated across more, or less polluting sectors. All this suggests that the impact of trade openness on pollution is likely to depend on initial conditions and therefore cross-country results are likely to hide significant heterogeneity which may lead to the wrong policy conclusions. The objective of this paper is to assess the impact of Tunisia’s trade reforms over the last four decades on its CO2 emissions by taking into account not only the direct effect of trade on emissions, but also its indirect effect through growth. Using cointegration techniques we disentangle the long and short-run relationship between trade openness, income per capita and CO2 emissions in Tunisia, and explore the extent of Granger causality among these variables. Results suggest that the direct effect of trade openness on CO2 emissions is positive both in the short and the long run, but the indirect effect is negative at least in the long run.

Suggested Citation

  • Houssem Eddine Chebbi & Marcelo Olarreaga & Habib Zitouna, 2010. "Trade Openness and CO2 Emissions in Tunisia," Working Papers 518, Economic Research Forum, revised 04 Jan 2010.
  • Handle: RePEc:erg:wpaper:518

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    Cited by:

    1. Sahbi Farhani & Anissa Chaibi & Christophe Rault, 2014. "A study of CO2 emissions, output,energy consumption, and trade," Working Papers 2014-56, Department of Research, Ipag Business School.
    2. Debashis Chakraborty & Sacchidananda Mukherjee, 2013. "Do Trade and Investment Flows Lead to Higher CO2 Emissions? Some Panel Estimation Results," Working Papers 1321, Indian Institute of Foreign Trade.
    3. Ling, Chong Hui & Ahmed, Khalid & Muhamad, Rusnah binti & Shahbaz, Muhammad, 2015. "Decomposing the trade-environment nexus for Malaysia: What do the technique, scale, composition and comparative advantage effect indicate?," MPRA Paper 67165, University Library of Munich, Germany, revised 09 Oct 2015.
    4. Arouri, Mohamed El Hedi & Ben Youssef, Adel & M'henni, Hatem & Rault, Christophe, 2012. "Energy consumption, economic growth and CO2 emissions in Middle East and North African countries," Energy Policy, Elsevier, vol. 45(C), pages 342-349.
    5. Zaman, Rubaiya, 2012. "CO2 Emissions, Trade Openness and GDP Percapita : Bangladesh Perspective," MPRA Paper 48515, University Library of Munich, Germany.
    6. Ben Jebli, Mehdi & Ben Youssef, Slim, 2015. "The environmental Kuznets curve, economic growth, renewable and non-renewable energy, and trade in Tunisia," Renewable and Sustainable Energy Reviews, Elsevier, vol. 47(C), pages 173-185.
    7. AROURI, Mohamed El Hedi & BEN YOUSSEF, Adel & M'HENNI, Hatem & Rault, Christophe, 2012. "Empirical Analysis of The EKC Hypothesis for Sulfur Dioxide Emissions in Selected Middle East and North African Countries," MPRA Paper 46185, University Library of Munich, Germany, revised 2012.
    8. repec:eco:journ1:2017-03-6 is not listed on IDEAS
    9. Ben Jebli, Mehdi & Ben Youssef, Slim, 2015. "Renewable Energy Consumption and Agriculture: Evidence for Cointegration and Granger causality for Tunisian Economy," MPRA Paper 68018, University Library of Munich, Germany.
    10. Hatem M'henni & Mohamed El Hedi Arouri & Adel Ben Youssef & Christophe Rault, 2011. "Income Level and Environmental Quality in The MENA Countries: Discussing the Environmental Kuznets Curve Hypothesis," Working Papers 587, Economic Research Forum, revised 05 Jan 2011.
    11. Houssem Eddine Chebbi & Marcelo Olarreaga, 2011. "Agricultural Trade Balance and Exchange Rate Depreciation: The Case of Tunisia," Working Papers 610, Economic Research Forum, revised 08 Jan 2011.
    12. Atif Awad & Mohammed Hersi Warsame, 2017. "Climate Changes in Africa: Does Economic Growth Matter? A Semi-parametric Approach," International Journal of Energy Economics and Policy, Econjournals, vol. 7(1), pages 1-8.
    13. repec:spr:jknowl:v:8:y:2017:i:1:d:10.1007_s13132-015-0323-y is not listed on IDEAS
    14. Ben Jebli, Mehdi & Ben Youssef, Slim, 2015. "The role of renewable energy and agriculture in reducing CO2 emissions: evidence for North Africa countries," MPRA Paper 68477, University Library of Munich, Germany.

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