article · Energies
An analysis of data from 1971 to 2014 examines how economic growth and trade openness influence energy consumption in Egypt. The study evaluates asymmetric relationships, looking at whether positive and negative shifts in growth and trade have unequal impacts. Findings reveal that economic growth and trade openness both exhibit asymmetric effects on energy consumption across the short and long run. Both increases and decreases in economic expansion generally raise energy consumption across both timeframes, though a decrease in growth has an insignificant short-run impact. Similarly, rising and falling trade openness both lead to higher energy consumption, with the exception of decreasing trade openness in the long run, which is insignificant. Because growth and open trade drive higher energy use, they risk generating negative environmental consequences. In response, policy advice urges the Egyptian government to diversify its energy use away from fossil fuels.
Expanding international trade and economic activities often fuel heavier energy demands, leading to heightened environmental risks. Understanding that growth and trade changes do not affect energy use symmetrically helps governments plan realistic infrastructure demands. For Egypt, it highlights the pressing necessity to move away from fossil fuel dependency towards cleaner energy sources to sustain long-term economic development without worsening environmental degradation.
The abstract does not indicate a commercial application pathway, as it represents macroeconomic policy analysis rather than a product or technology. However, the recommendation to diversify from fossil fuels suggests relevant strategic insights for clean energy project developers, utility planners, and policymakers. This research provides early-stage macroeconomic evidence to guide government energy policy and clean energy planning rather than a deployable commercial asset.
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Trade openness may support the economic growth of any country but its environmental effects due to increasing energy consumption cannot be ignored. This research hypothesizes the asymmetrical effects of both economic growth and trade openness on the energy consumption of Egypt from 1971–2014. Our estimates suggest that both economic growth and trade openness have asymmetrical effects on the energy consumption in both long and short runs because magnitude of the effects are found unequal. Both increasing and decreasing economic growth have positive effects on the energy consumption in the long and short runs except an insignificant effect of decreasing economic growth in the short run. Increasing and decreasing trade openness have also positive effects on the energy consumption in the long and short runs except an insignificant effect of decreasing trade openness in the long run. The increasing energy consumption, as results of increasing economic growth and/or trade openness, may have environmental consequence. Therefore, we recommend the Egyptian government to diversify the energy consumption from fossil fuel sources.
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DOI: 10.3390/en12102018
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