The Effect of Energy Consumption and Economic Growth on Environmental Sustainability in Egypt: Financial Development and Globalization, Do They Have a Role?

Faculty Commerce Year: 2024
Type of Publication: ZU Hosted Pages:
Authors:
Journal: المجلة العلمية للبحوث والدراسات التجارية كلية التجارة و إدارة الأعمال – جامعة حلوان Volume:
Keywords : , Effect , Energy Consumption , Economic Growth , Environmental    
Abstract:
The realization of environmental sustainability and the mitigation of the impact of climate change has become a global objective. The present paper tackles the effect of energy consumption, economic growth, financial development and globalization on the scale, intensity, and damage effects of carbon dioxide emissions in Egypt during the period 1990 – 2020. In addition, causality directions in the short run and the long run are investigated and the dynamic behavior of environmental sustainability is described. In order to achieve its objective, the present study relied on the co-integration analysis using the Autoregressive Distributed Lag (ARDL) technique, Sasabuchi-Lind-Mehlum test, and Granger causality test within the framework of the Vector Error Correction Model (VECM) and Toda-Yamamoto causality analysis; in addition to impulse response functions and the analysis of variance components. The results of the co-integration test revealed a long run correlation between carbon dioxide emissions and the explanatory factors. The study findings also showed that economic growth, energy consumption, globalization, and financial development reduce environmental sustainability. Moreover, the validity of the environmental Kuznets curve (EKC) hypothesis was confirmed when applied to the Egyptian economy. Hence the income level effect on the emissions scale becomes negative when the annual real income per capita exceeds the amount of 33841.5 Egyptian Pounds. According to the study results, causality directions proved to be weak and sensitive to the causality test applied in this study. A mutual causality relationship was revealed between the level of globalization and the scale and the damage of carbon dioxide emissions. A one-way relationship ran from the income level to the scale and the intensity of emissions; and a one-way relationship flowed from the scale of emissions to financial development.
   
     
 
       

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