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Renewable Energy Consumption and Agriculture: Evidence for Cointegration and Granger causality for Tunisian Economy

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  • Ben Jebli, Mehdi
  • Ben Youssef, Slim

Abstract

This paper uses the vector error correction model (VECM) and Granger causality tests to investigate short and long-run relationships between per capita carbon dioxide (CO2) emissions, real gross domestic product (GDP), renewable and non-renewable energy consumption, trade openness ratio and agricultural value added (AVA) in Tunisia spanning the period 1980-2011. The Johansen-Juselius test shows that all our considered variables are cointegrated. Short-run Granger causality tests reveal the existence of bidirectional causalities between AVA and CO2 emissions, and between AVA and trade; unidirectional causalities running from non-renewable energy and output to AVA and to renewable energy, and from CO2 emissions to renewable energy. Interestingly, there are long-run bidirectional causalities between all considered variables. Our long-run parameters estimates show that non-renewable energy, trade and AVA increase CO2 emissions, whereas renewable energy reduces CO2 emissions. In addition, the inverted U-shaped environmental Kuznets curve (EKC) hypothesis is not supported. Our policy recommendations are to increase international economic exchanges because this gives new opportunities to the agricultural sector to develop and to benefit from renewable energy technology transfer. Subsidizing renewable energy use in the agricultural sector enables it to become more competitive on the international markets while polluting less and contributing to combat global warming.

Suggested Citation

  • 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.
    • Handle: RePEc:pra:mprapa:68018
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    References listed on IDEAS

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    Cited by:

    1. Ben Jebli, Mehdi & Ben Youssef, Slim, 2016. "Combustible renewables and waste consumption, agriculture, CO2 emissions and economic growth in Brazil," MPRA Paper 69694, University Library of Munich, Germany.
    2. Ben Jebli, Mehdi & Ben Youssef, Slim, 2017. "Investigating the interdependence between non-hydroelectric renewable energy, agricultural value added, and arable land use in Argentina," MPRA Paper 77513, University Library of Munich, Germany.
    3. Mollah Aminul Islam & Haiyun Liu & Muhammad Asif Khan & Sultanuzzaman MD Reza & Yassin Elshain Yahia & Layla Nasrin, 2018. "Causal Relationship between Economic Growth, Financial Deepening, Foreign Direct Investment and Innovation: Evidence from China," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 8(8), pages 1086-1101, August.
    4. 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.
    5. Ben Jebli, Mehdi & Ben Youssef, Slim, 2017. "Renewable energy, arable land, agriculture, CO2 emissions, and economic growth in Morocco," MPRA Paper 76798, University Library of Munich, Germany.

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    More about this item

    Keywords

    Renewable energy; Agriculture; Trade; Granger causality; Tunisia.;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • Q1 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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