Asymmetric impacts of energy, finance, and urbanization on CO₂ emissions: Evidence from Algeria and Egypt

Besma Talbi ()

Energy Economics Letters, 2025, vol. 12, issue 2, 112-125

Abstract: This study examines the dynamic relationship between carbon dioxide (CO₂) emissions and key determinants, including economic growth, renewable and non-renewable energy consumption, financial development, institutional quality, and urbanization, in Algeria and Egypt over 2000–2024. The purpose is to provide new insights into how these factors shape environmental sustainability in two North African economies. To achieve this, the analysis employs both Autoregressive Distributed Lag (ARDL) and Non-linear ARDL (NARDL) approaches, capturing short- and long-run effects and potential asymmetries in response to positive and negative shocks. The findings confirm the Environmental Kuznets Curve (EKC) hypothesis, indicating that economic growth initially increases emissions but eventually reduces them beyond a certain threshold. Moreover, significant asymmetric effects are observed, particularly regarding energy shocks and urbanization changes, highlighting the importance of directionality in influencing CO₂ emissions. These results provide practical implications for policymakers, emphasizing the need to promote renewable energy adoption, strengthen institutional frameworks, and manage urban expansion sustainably to achieve long-term environmental improvements. By integrating a comprehensive set of determinants and applying both symmetric and asymmetric econometric frameworks, this study offers a novel perspective on environmental dynamics in Algeria and Egypt.

Keywords: Algeria; ARDL; Carbon dioxide emissions; Egypt; Environmental Kuznets Curve; NARDL. (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:asi:eneclt:v:12:y:2025:i:2:p:112-125:id:5644

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