This study analyses renewable energy and environmental policies and instruments to support a Green Economy transition in Tunisia. A descriptive and analytical approach is adopted in order to better understand links between energy systems, economic growth and environmental sustainability. There are considerable solar and wind resources in Tunisia, yet the energy sector remains largely dependent on fossil fuels. Currently, there are considerable structural barriers to the development of renewable energy in Tunisia, in particular with respect to financing, inadequate institutional and regulatory cooperation, and missing supportive infrastructure. Also the impact of path dependencies from current energy structures and existing investments in fossil fuel is discussed. A conceptual and causal model for explaining the transition to renewable energy, based on governance, investments and technological capabilities, is developed. Tunisia needs to adopt institutional reforms as well as green financing mechanisms and renewable energy technologies’ quick development to reach renewable energy targets in a sustainable and rapid low-carbon transition.