On the Causal Nexus of Road Transport CO2 Emissions and Macroeconomic Variables in Tunisia: Evidence from Combined Cointegration Tests

Muhammad Shahbaz, Naceur Khraief and Abderrazak Dhaoui

MPRA Paper from University Library of Munich, Germany

Abstract: This paper investigates the causal relationship between road transportation energy consumption, fuel prices, transport sector value added and CO2 emissions in Tunisia for the period 1980-2012. We apply the newly developed combined cointegration test proposed by Bayer and Hanck (2013) and the ARDL bounds testing approach to cointegration to establish the existence of long-run relationship in presence of structural breaks. The direction of causality between these variables is determined via vector error correction model (VECM). Our empirical exercise reveals that the cointegration is present. Energy consumption adds in CO2 emissions. Fuel prices decline CO2 emissions. Road infrastructure boosts in CO2 emissions. Transport value-added also increases CO2 emissions. The causality analysis indicates the bidirectional casual relationship between energy consumption and CO2 emissions. Road infrastructure causes CO2 emissions and similar is true from opposite side in Granger sense. The bidirectional causality is also found between transport value-added and CO2 emissions. Fuel prices cause CO2 emissions, energy consumption, road infrastructure and transport value-added. This paper provides new insights to policy makers to design a comprehensive energy, transport and environment policies for sustainable economic growth in long run.

Keywords: Road Transport; CO2 Emissions; Tunisia (search for similar items in EconPapers)
JEL-codes: C1 (search for similar items in EconPapers)
Date: 2015-10-12, Revised 2015-10-15
New Economics Papers: this item is included in nep-ara, nep-ene, nep-env and nep-tre
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (24)

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Related works:
Journal Article: On the causal nexus of road transport CO2 emissions and macroeconomic variables in Tunisia: Evidence from combined cointegration tests (2015)
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