Abstract:

The causal mechanisms between energy consumption, environmental degradation and economic growth are empirically less studied in transport sector. This study examines causality relationship between road transport-related energy consumption, CO2 emissions from transport sector and GDP in Tunisia using time series data (1980-2009), cointegration analysis and environmental Kuznets curve (EKC) approach.

Empirical results refute the hypothesis of neutrality between energy and income and do support the EKC hypothesis. The results verify the existence of unidirectional causality running from road transport-related energy consumption to income in the long-run and assume an inverted U-shaped relationship between income and environmental degradation, with income turning point approximately equal to $2646 (constant 2000 prices). This implies that climate policy, economic policy and road transport policy must be closely linked to formulate strategy increasing Tunisia’s transport sustainability.

The policymakers should reinforce the investment in road infrastructure and improve the development of renewable energy in road transport.