The Impact of Multiple Dimensions of Globalization on CO2 Emissions in Egypt (1970-2020)

Document Type : Original Article

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Faculty of Economic Studies and Political Science, Alexandria University, Egypt

Abstract

Carbon emissions associated with increased globalization have emerged as a focal point of concern, particularly in countries highly vulnerable to climate change, such as Egypt. This paper investigates the impact of globalization on territorial CO2 emissions in Egypt during the period (1970‒2020). Since globalization is a multidimensional process, the paper considers four dimensions of globalization: trade, financial, informational, and political globalization. The globalization indices covered in this study are based on the KOF Globalization sub-indices. Using an Autoregressive Distributed Lag (ARDL) model, the results of this paper show that only financial globalization leads to mitigation of carbon emissions in Egypt in the long run. In contrast, both informational and political globalization are not environmentally friendly and contribute to higher CO2 emissions. In addition, trade globalization raises emission levels in the short run. Besides, both economic growth and primary energy consumption raise CO2 emissions in Egypt, whereas gross capital formation reduces emission levels. The paper's findings suggest that policies to enhance financial globalization should be encouraged. However, activities associated with informational and political globalization should be reshaped to consider environmental aspects and to help mitigate carbon emissions.

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