Carbon dioxide emissions, total factor productivity, ICT, trade, financial development, and energy consumption: testing environmental Kuznets curve hypothesis for Tunisia.

Abstract

The main objective of this study is to examine the linkage between CO2 emissions, total factor productivity as a measure of income, information and communication technology (ICT), trade, financial development, and energy consumption in Tunisia from 1975 to 2014. To achieve this goal, the autoregressive distributed lag (ARDL) with the break point method is performed. The results demonstrate the rejection of the Kuznets environmental curve (EKC) hypothesis by obtaining a higher value of the long-term total factor productivity parameter compared to the short-term one. Moreover, our result shows an insignificant impact of ICT on CO2 emissions as a measure of pollution. In addition, trade, financial development, and energy consumption affect negatively the environmental quality. As a result, Tunisian policymakers should enhance the total factor productivity, expand the information and communication technology, further develop the financial sector, enhance the share of renewable energy consumption, and reduce the energy consumption resulting in import and export goods. These goals will be achieved by improving Tunisia's technological and innovation capacity, enhancing the use of ICT in transport, building, and industry sectors considered as the most pollutant ones, and creating renewable energy projects.