The Impact of Trade Openness on the Algerian Environment During the Period (1970-2020) Using Combined CoIntegration Test

Abstract

The main aim of this paper is to investigate the effect of trade openness on
environmental quality in Algeria over the period 1970-2020 using the combined co-integration test
presented by Bayer and Hanck (2013). Thus, this study uses an augmented STIRPAT model with
the introduction of trade openness in addition to quadratic and cubic economic growth in order to
test the N shape of environmental Kuznets curve. Accordingly, the results revealed that trade
openness negatively affect the CO2 emissions both in short and long run. Moreover, the outcomes
confirmed the existence of the N shape of environmental Kuznets curve in Algeria but only in the
long run term. Besides, it was concluded that neither the short-term nor the long-term effects of
energy consumption on CO2 emissions were very significant. Instead, population and economic
growth were found to be major long-term contributors of environmental deterioration.
Keywords: Trade Openness ; CO2 ; Combined Co-Integration ; Environmental Kuznets Curve