The asymmetric impact of industrial growth on carbon dioxide emissions: Evidence for the Tunisian economy

The primary sources of carbon dioxide (CO2) emissions (CO2em) in Tunisia are the combustion of fossil fuels for energy generation and industrial processes. The industrial sector consumes a substantial portion of energy, primarily derived from fossil fuels. This considerable dependence on carbon-intensive energy sources significantly impacts the CO2em profile of Tunisia's industrial sector. This study investigates the asymmetric impact of per capita industrial value-added (IVA) on per capita CO2em, incorporating per capita, real gross domestic product (GDP), and renewable and nonrenewable energy consumption (REC, NREC) as explanatory variables. The analysis employs the nonlinear autoregressive distributed lag (NARDL) model and the asymmetric pairwise Granger causality approach during the period 1990–2021. The results indicate that the variables are integrated of order one and cointegrated. The long-run NARDL analysis reveals that real GDP, REC, NREC, and positive shocks in IVA contribute to increased CO2em, while negative shocks in IVA result in decreased CO2em. Tunisia should establish policies aimed at advancing cleaner industrial practices, stimulating investment in REC, and diversifying its economic base. Essential strategies involve incentivizing the adoption of energy-efficient technologies, investing in REC infrastructure, introducing carbon pricing mechanisms to drive emission reductions, and enhancing environmental regulations to enforce stricter production standards.