Abstract
Understanding how major institutional and economic reforms influence environmental outcomes is essential for countries undergoing political transitions. This study examines how Tunisia’s CO₂ emissions trajectory evolved during the post-revolution institutional transition relative to a synthetic counterfactual constructed using the Synthetic Control Method (SCM). Rather than identifying the causal effectiveness of specific reforms, the analysis assesses whether Tunisia’s emissions trajectory diverged from that of a comparable synthetic unit following the reforms implemented after 2014 within a robust counterfactual framework. A synthetic version of Tunisia is constructed using a weighted combination of comparable North African countries, Algeria, Egypt, Libya, Morocco, and Sudan, based on pre-intervention data from 2000 to 2013 for key predictors, including GDP, renewable energy consumption (REC), non-renewable energy consumption (NREC), and foreign direct investment (FDI) inflows. The SCM results indicate that, following the post-2014 institutional transition, Tunisia’s CO₂ emissions trajectory diverged from its synthetic counterpart, with observed emissions rising more rapidly over the study period. While the estimated gap reaches approximately 58.3% by the end of the sample, placebo tests and RMSPE ratios indicate that this divergence is only weakly distinguishable from donor-country placebos, underscoring the need for cautious interpretation. These findings indicate that the post-revolution transition did not coincide with an immediate or statistically robust reduction in CO₂ emissions relative to the counterfactual, rather than providing definitive evidence of reform success or failure. From a policy perspective, the results highlight the importance of aligning institutional and economic reforms with clearly operationalized climate and energy policies. In particular, accelerating renewable energy deployment, improving energy efficiency, phasing down fossil-fuel subsidies, and strengthening regulatory and governance frameworks are essential to ensure that future reform efforts translate into meaningful environmental improvements. The findings provide critical insights for Tunisia and other North African countries seeking to balance economic development with environmental sustainability during periods of institutional transition.