Environmental Kuznets curve: an empirical analysis for carbon dioxide emissions in Egypt

The aim of the study is to address the relationship between environmental degradation and economic growth in Egypt. In this regard, the study examines the relationship between carbon dioxide emissions (CO2), economic growth (real GDP per capita), energy consumption, trade openness and population density employing Johansen cointegration analysis over time series data of 1980-2010. Specifically, the study investigates the existence of Environmental Kuznets Curve (EKC) hypothesis, the relationship between CO2 emissions and real GDP per capita. The results of the study confirm the existence of long-run relationship between the variables. In addition, the study does not support the existence of EKC either in the short or the long run. Also, it is concluded that energy consumption is correlated positively with CO2 emissions, while trade openness and population are correlated negatively with it. Granger causality test indicates bilateral causality between economic growth and CO2 emissions and unilateral causality running from economic growth to energy consumption and from trade openness to economic growth. Important policy implications will be recommended based on these results.