An ARDL approach to the CO2 emissions, renewable energy and economic growth nexus: Tunisian evidence

Abstract

This paper examines the relationship between CO2 emissions, renewable energy consumption (RENEC) and economic growth in Tunisia via an Autoregressive Distributed Lag model. Our research question is to what extent renewable energies can be used as an alternative to conventional energies, which are very well known by their strong emissions of greenhouse gases. We use Granger causality tests to check the short and long-run equilibrium relationship. Furthermore, we try to determine the causality direction between these three variables for the Tunisian economy. The results reveal that for the gross domestic product (GDP), CO2 emissions and RENEC are stable in the long-term. However, the Granger causality tests indicate a bidirectional relationship between GDP and CO2 emissions as well as between RENEC and GDP but no relationship between CO2 emissions and RENEC. Thus, to succeed an energy transition project and to benefit from positive impacts on economic growth and environment protection, an appropriate strategy encouraging renewable energy use should be adopted.