Pollution abatement and economic growth in the context of trade liberalization : A CGE approach applied to tunisia

Abstract EN

This paper tries to evaluate the impact of trade liberalization and regional integration on pollution emissions in Tunisia.

It also delves on the economic consequences of taxing thirteen categories of effluents, including air, water and land contaminants as instrument of pollution abatement policy in Tunisia.

A recursive dynamic computable general equilibrium model is used for this purpose.

Results indicate that economic integration of Tunisia with Europe will increase pollution and environmental degradation.

Economic implications of pollution abatement policies for Tunisia show that Tunisia can achieve pollution reduction targets (25% reduction in 2010 compared to the level of pollution emission in 2001) without seriously compromising economic growth objectives.

This negligible negative effects on growth may be explained by the changes in the composition of domestic Tunisian economic activity where productive resources are easily shifted from more to less polluting activities