Is the Environmental Kuznets Curve Hypothesis a Viable Basis for Environmental Policy in Egypt?

Shaker, Victor

doi:10.21608/sjas.2022.144058.1238

Is the Environmental Kuznets Curve Hypothesis a Viable Basis for Environmental Policy in Egypt?

Document Type : Original Article

Author

victor shaker

Department of Agricultural Economics, Faculty of Agriculture, Cairo University

10.21608/sjas.2022.144058.1238

Abstract

Shifting to sustainable and durable economic growth has become necessary considering the dangerous consequences of climate change. The growing literature has tested the Environmental Kuznets Curve (EKC) hypothesis that links economic growth and environmental degradation. The validity of the EKC hypothesis has sparked heated disputes among scholars. The Autoregressive Distributed Lag approach, ARDL, examines the nexus between carbon dioxide (CO₂) as a dependent variable and real GDP, energy consumption, and trade openness as independent variables in the Egyptian setting. Unlike prior studies, the findings validate the inverted N-shaped EKC hypothesis. Thus, the results do not support the EKC hypothesis, implying that environmental degradation cannot be explained necessarily by economic growth. Although this discovery is interesting and difficult to explain, it could be the result of Egypt's initial environmentally-friendly mindset. Another interesting conclusion is that a 1 percent rise in per capita energy consumption increases CO2 emissions per capita by 1.14 and 0.84 percent in the long and short run, respectively. Policymakers should think about establishing regulations to ensure the use of green energy technologies in business, as well as investing in renewable energy to increase its share in the energy mix. Future research should use a nonlinear ARDL methodology and longitudinal data to develop further and corroborate these initial findings.

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