How does democracy impact the environment? An economic and political analysis of load capacity in Egypt

Abstract

While it is essential to consider economic and political factors together to understand environmental degradation, the lack of sufficient efforts to grasp the political economy of the environment is cited as a key reason for the slowdown in achieving sustainable development goals. This study focuses on democracy in Egypt, a country with a complex economic and political history. It investigates the impacts of financial development, energy consumption, economic growth, trade openness, and urbanization on the load capacity factor from 1980 to 2022, employing the Fourier Augmented ARDL method. It adds to the literature from multiple perspectives as a pioneering study in Egypt. The results show that democracy decreases the load capacity factor, leading to a decline in environmental quality and indicating a trade-off between democracy and environmental preservation. Economic growth and energy consumption are identified as the most significant contributors to reducing the load capacity factor and accelerating environmental degradation. Conversely, trade openness enhances the load capacity factor, easing ecological pressure in Egypt. However, financial development and urbanization are found to have no significant impact. The findings highlight the urgent need for a balanced approach to economic, political, and environmental strategies in Egypt. This study underscores the importance of integrating economic and political efforts to achieve sustainable development goals.