Exploring the role of renewable energy and foreign and non-foreign patents on mitigating emissions: evidence for Tunisian economy

This study investigates the relationships among renewable energies (RE), carbon dioxide (CO2) emissions, foreign direct investment (FDI), foreign and non-foreign patents (FP, NFP), and trade (TR) for the case of Tunisia using time series data spanning the period 1980-2017. The autoregressive distributed lags (ARDL) model approach of Pesaran et al. (J Appl Econ 16:289-326, 2001) and the causality of Granger are employed to explore the dynamic association between the underlined variables. The results from the long-run elasticities show that FDI and TR have negative and statistically significant impacts on RE, while NFP has a positive and statistically significant effect on the consumption of RE. Both FP and CO2 emission variables are insignificant in the long run. In the short run, there are no Granger causal links between RE and patents (FP and NFP), but we have one-way causality running from CO2 emissions to patents (FP and NFP). In the long run, there are bidirectional causalities between RE, NFP, and TR. The Tunisian authorities must impose more stringent environmental standards to attract foreign investments that are more respectful of the environment, and import and export cleaner. It is also necessary to encourage R&D and innovation which appear to be beneficial for the environment.

Automated summary

The study found that foreign direct investment and trade have negative impacts on the consumption of renewable energies in Tunisia, while non-foreign patents have a positive impact. In the short term, there is a one-way causality from CO2 emissions to patents, while in the long term there are bidirectional causal relationships between renewable energies, non-foreign patents, and trade.