Muhammad, Shahbaz and Naceur, Khraief and Gazi Salah, Uddin (2012): Environmental Kuznets Curve in an Open Economy: A Bounds Testing and Causality Analysis for Tunisia.
Download (219kB) | Preview
The aim of this paper is to investigate the existence of environmental Kuznets curve (EKC) in an open economy like Tunisia using annual time series data for the period of 1971-2010. The ARDL bounds testing approach to cointegration is applied to test long run relationship in the presence of structural breaks and vector error correction model (VECM) to detect the causality among the variables. The robustness of causality analysis has been tested by applying the innovative accounting approach (IAA).
The findings of this paper confirmed the long run relationship between economic growth, energy consumption, trade openness and CO2 emissions in Tunisian Economy. The results also indicated the existence of EKC confirmed by the VECM and IAA approaches. The study has significant contribution for policy implications to curtail energy pollutants by implementing environment friendly regulations to sustain the economic development in Tunisia.
|Item Type:||MPRA Paper|
|Original Title:||Environmental Kuznets Curve in an Open Economy: A Bounds Testing and Causality Analysis for Tunisia|
|English Title:||Environmental Kuznets Curve in an Open Economy: A Bounds Testing and Causality Analysis for Tunisia|
|Keywords:||EKC, Energy, Tunisia|
|Subjects:||O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development
Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q4 - Energy
|Depositing User:||Muhammad Shahbaz|
|Date Deposited:||18. Nov 2012 13:58|
|Last Modified:||01. Jan 2016 18:10|
1]. Akbostanci, E., Tunc, G. I., Türüt-Asik, S. Pollution haven hypothesis and the role of dirty industries in Turkey’s exports. ERC Working Paper 0403. Middle East Technical University, Economic Research Center, February (2004).
2]. Ang, J. B. CO2 emissions, energy consumption, and output in France. Energy Policy 2007; 35: 4772-4778.
3]. Ang, J. B. Economic development, pollutant emissions and energy consumption in Malaysia. Journal of Policy Modeling 2008; 30: 271-278.
4]. Antweiler, W., Copeland, B., Taylor. S. Is free trade good for the environment?. American Economic Review 2001; 91: 877-908.
5]. Bartleet, M., Gounder, R. Energy consumption and economic growth in New Zealand: results of trivariate and multivariate models. Energy Policy 2010; 38: 3508–3517.
. Baum, C.F. A review of Stata 8.1 and its time series capabilities. International Journal of Forecasting 2004; 20: 151-161.
. Belloumi, M. Energy consumption and GDP in Tunisia: cointegration and causality analysis. Energy Policy 2009; 37: 2745-2753.
. Cheung, Y-W., Lai, K. A fractional cointegration analysis of purchasing power parity. Journal of Business & Economic Statistics 1993; 11: 103-112.
. Copeland, B. R., Taylor. M. S. North-South trade and the environment. The Quarterly Journal of Economics 1994; 109: 755-787.
. Copeland, B. R., Taylor. M. S. Trade and transboundary pollution. American Economic Review 1995; 85: 716-737.
. Dijkgraaf, E., Vollebergh. H. A note on testing for environmental Kuznets curves with panel data. Others 0409001, EconWPA. Washington University, St. Louis (2004).
. Egli, H. The environmental Kuznets curve: evidence from time series data for Germany. CER-ETH Economics Working Paper 03/28, Center of Economic Research, Swiss Federal Institute of Technology (ETH), Zurich (2004).
. Engle, R.F., Granger, C.W.J. Cointegration and error correction representation: estimation and testing. Econometrica 1987; 55, 251-276.
. ETAP. Tunisian Company of Oil Activities Annual report (2010) http://www.etap.com.tn/fileadmin/templates/etap/rapports/Rapport_ETAP_2010_Fr.pdf
. European Commission. Tunisia-Trade statistics. (2012) http://trade.ec.europa.eu/doclib/docs/2006/september/tradoc_122002.pdf
. Fodha, M., Zaghdoud, O. Economic growth and pollutant emissions in Tunisia: an empirical analysis of the environmental Kuznets curve. Energy Policy 2010; 38: 1150-1156.
. Frankel, J. A., Rose, A. K. Is trade good or bad for the environment? sorting out the causality. The Review of Economics and Statistics 2005; 87: 85-91.
. Gamper-Rabindran, S., Jha, S. Environmental impact of India’s trade liberalization. (2004) http://unpan1.un.org/intradoc/groups/public/documents/APCITY . Gonzalo, J. T.-H. Lee. Pitfalls in Testing for Long-Run Relationships », Journal of Econometrics 1998; 86, p. 129-154.
. Granger, C. W. J. Investigating causal relations by econometric models and cross-spectral methods. Econometrica 1969; 37: 424-438.
. Grossman, G. M., Krueger, A. B. Environmental impacts of a North American Free Trade Agreement. NBER Working Paper, No. 3914, Washington (1991).
. Halicioglu, F. An econometric study of CO2 emissions, energy consumption, income and foreign trade in Turkey. Energy Policy 2009; 37: 1156-1164.
. Ibrahim, M. Sectoral Effects of Monetary Policy: Evidence from Malaysia. Asian Economic Journal 2005; 191:83-102.
. International Energy Agency. CO2 Emissions from Fuel Combustions: Highlights. www.iea.org/co2highlights/co2highlights.pdf (2011)
. Johansen, S. Statistical analysis of cointegration vectors. Journal of Economic Dynamics and Control 1988; 12: 231-254.
. Johansen, S., Juselius, K. Maximum likelihood estimation and inference on cointegration with applications to the demand for money. Oxford Bulletin of Economics and Statistics 1990; 52: 169-210.
. Kuznets, S. Economic Growth and Income Inequality. The American Economic Review 1955; 45: 1-28. . Lean, H. H., Smyth, R. CO2 emissions, electricity consumption and output in ASEAN. Applied Energy 2010; 87: 1858-1864.
. Lucas, R.E.B., Wheeler, D., Hettige, H. Economic development, environmental regulation, and the international migration of toxic industrial pollution: 1960-88. The World Bank (1992).
. Lütkepohl, H. Structural vector autoregressive analysis for cointegrated variables. AStA Advances in Statistical Analysis 2006; 90: 75-88.
. Mani, M.S., Jha, S. Trade liberalization and the environment in Vietnam. Policy Research Working Paper 3879, World Bank, April (2006)
. Menyah, K., Wolde-Rufeal, Y. Energy consumption, pollutants emissions and economic growth in South Africa. Energy Consumption 2010; 32: 1374-1382.
. Ministry of the Environment and Sustainable Development, Republic of Tunisia. Initial Communication of Tunisia under the United Nations Framework Convention on Climate Change. October (2001).
. Nahman, A., Antrobus, G. Trade and the environmental Kuznets curve: Is Southern Africa a pollution haven? South African Journal of Economics 2005; 73: 803-814.
. Narayan, P.K. The saving and investment nexus for China: Evidence from co-integration tests. Applied Economics 2005; 37: 1979-1990.
. Nasir, M., Rehman, F-U. Environmental Kuznets curve for carbon emissions in Pakistan: An empirical investigation. Energy Policy 2011; 39:1857-1864.
. Pesaran, M.H., Shin, Y. An autoregressive distributed lag modelling approach to cointegration analysis. Chapter 11 in Econometrics and Economic Theory in the 20th Century: The Ragnar Frisch Centennial Symposium, Strom S. (ed.). Cambridge University Press: Cambridge (1999).
. Pesaran, M.H., Shin, Y., Smith, R.J. Bounds testing approaches to the analysis of level relationships. Journal of Applied Econometrics 2001; 16: 289-326.
. Republic of Tunisia. Law n. 62-8 dated on 03 April. Official Journal of the Republic of Tunisia.1962
. Republic of Tunisia. Law n. 62-16 dated on 24 May. Official Journal of the Republic of Tunisia.1962
. Republic of Tunisia. Law n. 70-58 dated on 22 December 1970. Official Journal of the Republic of Tunisia.1970
. Republic of Tunisia. Law n. 96-27 dated on 01 April. Official Journal of the Republic of Tunisia.1996
. Republic of Tunisia. Law n. 2004-72 dated on 06 August. Official Journal of the Republic of Tunisia n° 63.2004
. Republic of Tunisia. Law n. 2005-106 dated on 20 December. Official Journal of the Republic of Tunisia n° 101. 2005
. Saboori, B., Sulaiman, J. B., Mohd, S. An empirical analysis of the environmental Kuznets curve for CO2 emissions in Indonesia: the role of energy consumption and foreign trade. International Journal of Economics and Finance 2011; 4: 243-251.
. Saboori, B., Sulaiman, J.B., Mohd, S. Economic growth and CO2 emissions in Malaysia: A cointegration analysis of the environmental Kuznets curve. Energy Policy 2012; 51: 184-191.
. Sadorsky, Perry. Energy Consumption, Output and Trade in South America. Energy Economics 2012; 34: 476-488.
. Sari, R., Soytas, U. The growth of income and energy consumption in six developing countries. Energy Policy 2007; 35: 889-898.
. Shahbaz, M. Income inequality-economic growth and non-linearity: a case of Pakistan. International Journal of Social Economics 2010; 37: 613-636.
. Shahbaz, M., Lean, H. H., Shabbir, M. S. Environmental Kuznets curve hypothesis in Pakistan: Cointegration and Granger causality. Renewable and Sustainable Energy Reviews 2012; 16: 2947-2953.
. Shahbaz, M., Lean, H.H. Does financial development increase energy consumption? The role of industrialization and urbanization in Tunisia. Energy Policy 2012; 40: 473-479.
. Shahbaz, M., Mutascu, M., Azim, P. Environmental Kuznets curve in Romania and the role of energy consumption. Renewable and Sustainable Energy Reviews forthcoming issue 2013.
. Shan, J. Does financial development ‘lead’ economic growth? A vector autoregression approach. Applied Economics 2005; 37: 1353-1367.
. Song, T., Zheng, T., Tong, L. An empirical test of the environmental Kuznets curve in China: a panel cointegration approach. China Economic Review 2008; 19: 381-392.
. Stern, D.I., Common, M.S., Barbier, E.B. Economic growth and environmental degradation: The environmental Kuznets curve and sustainable development. World Development 1996; 24: 1151-1160.
. Stock, J. H., Watson, M. W. A simple estimator of cointegrating vectors in higher order integrated systems. Econometrica 1993; 61: 783-820.
. Tiwari, A.K. Energy consumption, CO2 emissions and economic growth: evidence from India. Journal of International Business and Economy 2011; 12: 85-122.
. Tunisian National Agency for Energy Conservation (ANME).The Renewable Energy and Energy Efficiency Plan 2008-2011. 2008
. Tunisian National Agency for Energy Conservation (ANME). Tunisian Solar Plan 2009-2016. 2009
. Turner, P. Response surfaces for an F-test for cointegration. Applied Economics Letters 2006; 13: 479-482.
. Uddin, M.G.S., Bidisha, S.H., Ozturk, I. Carbon emissions, energy consumption and economic growth relationship in Sri Lanka. Energy Sources, Part B: Economics, Planning, and Policy, forthcoming issue.2013
. Wyckoff, A.W., Roop, J.M. The embodiment of carbon in imports of manufactured products: Implications for international agreements on greenhouse gas emissions. Energy Policy 1994; 22: 187-194.
. Yeh, C-C. The relationships between the CO2 emissions and national income under quantiles inference. Asian Journal of Natural & Applied Sciences 2012; 1: 55-66.
. Zivot, E., Andrews, D. Further evidence on the great crash, the oil price shock, and the unit root hypothesis. Journal of Business and Economic Statistics 1992; 10: 251- 270.
. World Development Indicators. World Bank, Washington, DC 2012.
. Leow, Y. G. A reexamination of the exports in Malaysia’s economic growth: after Asian financial crisis, 1970-2000. International Journal of Management Sciences 2044; 11: 79-204.
. Shahbaz, M., Zeshan, M., Afza, T., Is energy consumption effective to spur economic growth in Pakistan? New evidence from bounds test to level relationships and Granger causality tests. Economic Modelling 2012; 23: 2310-2319.
. Khalil, S and Inam, Z. Is trade good for environment? a unit root cointegration analysis? The Pakistan Development Review 2006; 45: 1187-1196.
. Sharma, S. S. Determinants of carbon dioxide emissions: Empirical evidence from 69 countries. Applied Energy 2011; 88:376-382.
. The Global Enabling Trade Report, 2010. http://www.weforum.org.
. Energy Information Administration, 2011. http://www.eia.gov/forecasts/aeo/
. Energy Information Administration, 2012. http://www.eia.gov/forecasts/aeo/