Trade Openness and CO2 Emissions: Evidence from Tunisia

We investigated the asymmetrical effects of trade openness on CO2 emissions and the environmental Kuznets curve (EKC) hypothesis in Tunisia during the period 1971–2014. The integration analysis suggests a mixed order of integration and the cointegration analysis corroborates the long- and short-run relationships. The EKC was proved true with a turning point gross domestic product (GDP) of approximately 292.335 billion constant US dollars, and Tunisia was found at the first phase of EKC. Moreover, we corroborate the asymmetrical effects of trade openness on CO2 emissions. The effects of increasing and decreasing trade openness are found to be positive and insignificant on CO2 emissions, respectively. The pollution haven hypothesis is found to be true in Tunisia, along with negative environmental effects associated with increasing foreign trade.

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