Testing the Environmental Kuznets Curve (EKC) Hypothesis in the Agricultural Sector in Egypt using the ARDL

Agriculture in Egypt is the lifeblood of the economy, but it is also one of the largest consumers of resources and the most significant environmentally impactful sector. Despite the country's ambitious and substantial efforts in renewable energy, overall emissions continue to rise, and the decline is accelerating with economic growth, as the country faces unique pressures from population size, water scarcity, and climate change. This research aims to test the Ecological Kuznets Curve (EKC) hypothesis in the Egyptian agricultural sector. The Autoregressive Distributed Lag (ARDL) methodology was employed as the analytical tool for testing the EKC hypothesis. Secondary data in the form of annual time series on greenhouse gas emissions from the agricultural sector for the period 1973–2022 were used. This period was divided into two periods: the first (1973–1996) and the second (1997–2022), based on the results of the Chow Breakpoint test.
The results showed that all estimated models were statistically significant and that current values ​​for greenhouse gas emissions in the agricultural sector were driven by values ​​from previous periods. The most significant variables positively influencing greenhouse gas emissions in the Egyptian agricultural sector were greenhouse gas emissions in Egypt and in the agricultural sector in the previous year, energy use, population size, industrialization, and the number of machines. Conversely, the most significant negative
 
 variables were trade openness, financial development, and expenditure on research and development.
The main finding is that greenhouse gas emissions (GHG) in Egyptian agricultural sector increase consistently and synchronously with rising real income (economic growth) without any clear decline during the three study periods. The results did not provide strong evidence of a decrease in these emissions with rising income, as no significant relationships were found between real agricultural income variables (in their linear, quadratic, and cubic forms) and greenhouse gas emissions in the agricultural sector, either in the short or long run. Furthermore, the signals for the real income variables in both the short and long run do not support the existence of an environmental Kuznets curve hypothesis. This means that there is no inverted U-shape pattern, i.e., the environmental Kuznets curve (EKC) hypothesis is not confirmed, and there is no clear environmental Kuznets curve was found in the Egyptian agricultural sector. Thus, it can be confirmed that economic growth alone is insufficient to improve the environment and reduce environmental degradation without robust environmental policies. In other words, economic growth alone cannot be relied upon to solve environmental problems.