This study examines the linkages among economic growth, energy consumption, financial development, trade openness and CO2 emissions over the period of 1975Q1-2011Q4 in the case of Indonesia. The stationary analysis is performed by using Zivot-Andrews structural break unit root test and the ARDL bounds testing approach for a long run relationship between the series in the presence of structural breaks. The causal relation between the concerned variable is examined by the VECM Granger causality technique and robustness of causal analysis is tested by innovative accounting approach (IAA). Our results confirm that the variables are cointegrated; it means that the long run relationship exists in the presence of structural break stemming in the series. The empirical findings indicate that economic growth and energy consumption increases CO2 emissions, while financial development and trade openness compact it. The VECM causality analysis has shown the feedback hypothesis between energy consumption and CO2 emissions. Economic growth and CO2 emissions are also interrelated i.e. bidirectional causality. Financial development Granger causes CO2 emissions. The study opens up a new policy insights to control the environment from degradation by using energy efficient technologies. Financial development and trade openness can also play their role in improving the environmental quality.

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Economic growth, energy consumption, financial development, international trade and CO2 emissions in Indonesia

This article extends the recent findings of Liu (2005), Ang (2007), Apergis et al. (2009) and Payne (2010) by implementing recent bootstrap panel unit root tests and cointegration techniques to investigate the relationship between carbon dioxide emissions, energy consumption, and real GDP for 12 Middle East and North African Countries (MENA) over the period 1981–2005. Our results show that in the long-run energy consumption has a positive significant impact on CO2 emissions. More interestingly, we show that real GDP exhibits a quadratic relationship with CO2 emissions for the region as a whole. However, although the estimated long-run coefficients of income and its square satisfy the EKC hypothesis in most studied countries, the turning points are very low in some cases and very high in other cases, hence providing poor evidence in support of the EKC hypothesis. Thus, our findings suggest that not all MENA countries need to sacrifice economic growth to decrease their emission levels as they may achieve CO2 emissions reduction via energy conservation without negative long-run effects on economic growth.

https://papers.ssrn.com/sol3/Delivery.cfm/dp6412.pdf?abstractid=2028212&mirid=1

Energy Consumption, Economic Growth and CO2 Emissions in Middle East and North African Countries

https://www.econstor.eu/bitstream/10419/58503/1/715714074.pdf

Energy consumption, economic growth and CO2 emissions in Middle East and North African countries $

This paper extends the work of Al-Mulali and Ozturk (2015) [1] by re-investigating the Environment Kuznets Curve (EKC) hypothesis for 15 MENA (Middle East and North African) countries using the Ecological Footprint (EF) as a proxy of environmental degradation over the period 1975–2007. Unlike the existing studies, we augment the basic EKC relationship by considering life expectancy at birth, fertility rate and political institutional index variables as new possible determinants of environmental degradation. The estimation of this relationship has been conducted for all MENA 15 countries, for oil-exporting and non-oil-exporting countries sub-samples. The results show that energy use worsens ecological footprint, whereas real GDP per capita exhibits an inverted U-shaped relationship with EF in oil-exporting countries and in the sample as a whole, i.e., the EKC hypothesis is validated. For the non-oil-exporting countries, the relationship between EF and economic growth is U-shaped. Moreover, our findings show that socio-demographic variables such as urbanization, life expectancy at birth and fertility rate improve the environment in the long term. We also found that the improvement of political institutions in those countries has not been accompanied by a reduction of environmental stress. The Granger causality results support evidence of the existence of an error correction mechanism between the EF, real GDP, energy use and the fertility rate. Specifically, in the short term, we found strong evidence for bidirectional causality among the ecological, real GDP and energy-use variables.

The impact of economic development and social-political factors on ecological footprint: A panel data analysis for 15 MENA countries

We use the autoregressive distributed lag (ARDL) b ounds testing approach for cointegration with structural breaks and the ve ctor error correction model (VECM) Granger causality approach in order to investigate relationships between per capita CO 2 emissions, GDP, renewable and non-renewable energy consumption and international trade (exports or imports) for Tunisia during the period 1980-2009. We show the existence of a short-run unidirectional causality running from tra de, GDP, CO 2 emission and non-renewable energy to renewable energy. Our long-run estimates show that non-renewable energy and trade have a positive impact on CO 2 emissions, whereas renewable energy impacts weakly and negatively CO 2 emission when using the model with exports and this impact is statistically insignificant when using the model wi th imports. The inverted U-shaped environmental Kuznets curve (EKC) hypothesis is not supported graphically and analytically in the long-run. This means that Tunisia has not ye t reached the required level of per capita GDP to get an inverted U-shaped EKC. Our main policy recommendations for Tunisia are the following: (i) to radically reform the subsidies system granted b y the Tunisian government for fossil fuels consumption; (ii) to encourage the use of renewable energy and ener gy efficiency by reinforcing actual projects and regulatory frame work; (iii) to locate ports near exporting industrial zones (or vice versa) to reduce emission of pollution caused by the transport of merchandise; (iv) to elaborate a strategy for maximizing its benefit from renewable energy technology transfer occurring when importing capita l goods; (v) to encourage the creation of renewable energy projects for export to the EU with a proportion of production for national consumption.

/pdf/the-environmental-kuznets-curve-economic-growth-renewable-30qn9bu47w.pdf

The environmental Kuznets curve, economic growth, renewable and non-renewable energy, and trade in Tunisia

By reallocating resources among more or less polluting sectors, trade reforms affect pollution levels directly. They also affect pollution indirectly through their impact on economic activity and income levels, which then affect not only emissions, but also the demand for higher environmental standards. The sign of the direct and indirect effects is ambiguous. In other words, whether trade openness leads to more or less pollution is an empirical question. Using cointegration techniques, we disentangle the long- and short-run relationship between trade openness, income per capita and CO2 emissions in Tunisia, as well as 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. The overall effect is positive both in the short and long run, highlighting the importance for trade reforms to be accompanied by strong environmental pol...

Trade openness and co2 emissions in tunisia

This paper provides some insights into the linkages between energy consumption, carbon emissions and the sectoral components of output growth using Tunisian data over the period 1971 to 2005.Results of the long–run analysis do not support the neutrality hypothesis between energy consumption and sectoral output growth in Tunisia. Results from short–run dynamics indicate that linkages between energy consumption and economic growth, as well as economic growth and environmental pollution are not uniform across sectors (agriculture, industry and services). These outcomes suggest that prudent energy and environmental policies should distinguish the differences in the relationship between energy consumption and output growth by sector.

Long and short–run linkages between economic growth, energy consumption and co2 emissions in tunisia

−− The aim of this country specific study is to understand long and short-run linkages between economic growth, energy consumption and CO 2 emission using Tunisian data over the period 1971-2004. Statistical findings indicate that economic growth, energy consumption and CO 2 emission are related in the long-run and provide some evidence of inefficient use of energy in Tunisia, since environmental pressure tends to rise faster than economic growth. In the short run, results support the argument that economic growth exerts a positive “causal” influence on energy consumption growth. In addition, results from impulse response do not confirm the hypothesis that an increase in pollution level induces economic expansion. Although Tunisia has no commitment to reduce Greenhouse Gas emissions, energy efficiency investments and emission reduction policies will not hurt economic activities and can be a feasible policy tool for Tunisia. Keywords −− CO 2 emissions, Energy Consumption, Economic Growth, Tunisia.

CO2 emissions, energy consumption and economic growth in Tunisia

The objective of this paper is to analyze trade potential versus actual realized trade among North African trading partners. Following the literature on production economics, we built a stochastic frontier gravity model. The underlying assumption is that all deviations from trade potential is not due to white noise but may also be due to inefficiencies. Time-variant country-specific trade efficiency estimates are obtained and analyzed. Our results indicate that Mauritania, as a country both of destination and of origin, is where the regionâs trading relationship is the least efficient. Tunisia, followed by Morocco, faces the fewest behind- and beyond-the-border effects. Our analysis of market integration and trade efficiency at the disaggregated level indicates that trade efficiency scores exhibit high variability between categories of products. Moreover, North African market integration is worst when considering the goods from âTextiles; Footwear & Headgearâ category. Our estimates indicate that trade efficiency for agricultural products is relatively low, indicating the existence of significant behind- and beyond-the-border inefficiencies. Our estimates also underline the importance of improving domestic policies to encourage entrepreneurial development and business facilities.

Trade performance and potential of North African countries: An application of a stochastic frontier gravity model

For the past two decades, Tunisia has been undertaken important structural reforms, which call in most cases for market and trade liberalization (agricultural structural adjustment program, GATT reforms, free trade area with the European Union). The private-led type of growth strategy with less government intervention has culminated these last years into a more rapid economic growth and openness.
Within this context, this paper examines the agricultural sector role into the economic growth and its interactions with the other sectors using time-series co-integration techniques. We use annual data from 1961 to 2005 to estimate a VAR model that includes GDP indices of five sectors in Tunisian economy.
Empirical results from this study indicate that in the long-run all economic sectors tend to move together (co-integrate). But, in the short-run, the agricultural sector seems to have a limited role as a driving force for the growth of the other sectors of the economy. In addition, growth of the agricultural output may not be conducive directly to non-agricultural economic sector in the short-run.

Houssem Eddine Chebbi

Papers

Trade openness and co2 emissions in tunisia

Long and short–run linkages between economic growth, energy consumption and co2 emissions in tunisia

CO2 emissions, energy consumption and economic growth in Tunisia

Trade performance and potential of North African countries: An application of a stochastic frontier gravity model

Agricultural sector and economic growth in Tunisia: Evidence from co-integration and error correction mechanism