The Impact of Trade and FDI on Pollution and Environmental Degradation in Tunisia

This project analyzed the impact of trade reforms on pollution levels and whether trade openness leads to more, or less, pollution in Tunisia using co-integration techniques. The research suggested that the direct effect of trade openness on CO2 emissions is positive both in the short and the long runs, while the indirect effect is negative, at least in the long run. The overall effect is positive both in the short and long runs, highlighting the importance for trade reforms being accompanied by strong environmental policies.