Dynamic Effects of Temperature Anomalies on Energy Consumption Shocks in Egypt: Assessing the Economic Burden of Climate Change Using VAR | ||
| مجلة الدراسات السياسية والاقتصادية | ||
| Volume 5, Issue 2 - Serial Number 9, October 2025, Pages 848-889 PDF (2.34 M) | ||
| Document Type: المقالة الأصلية | ||
| DOI: 10.21608/psej.2025.373108.1187 | ||
| Author | ||
| Ahmed El Refaay Mohamed A. Emam* | ||
| قسم الاقتصاد - كلية السياسة والاقتصاد والادارة - جامعة مايو، القاهرة - مصر | ||
| Abstract | ||
| Abstract This study analyzes the dynamic influence of temperature anomalies on energy consumption trends in Egypt from 1990 to 2023. Employing Vector Autoregression (VAR) methodology, we examined the impact of climate variability on electricity consumption, natural gas utilization, and the adoption of renewable energy. Results demonstrate strong correlations between temperature variations and energy consumption (electricity: 0.8294; natural gas: 0.7804), with intricate temporal dynamics corroborating our hypotheses that temperature anomalies substantially influence energy consumption and that these effects exhibit seasonal variability. The economic ramifications entail fluctuations in energy prices, where a 1% rise in temperature anomalies correlates with a 0.89% increase in energy costs. Urban expansion intensifies consumption trends, elevating electricity and natural gas demand by 4.02% and 39.04%, respectively, for each 1% increase in urbanization. Granger causality tests demonstrate that temperature anomalies significantly affect both electricity (p = 0.0257) and natural gas consumption (p = 0.0222). These findings validate the necessity for climate-resilient energy infrastructure, diversified supply chains, expedited renewable transition, and cohesive urban energy planning. This research quantifies the economic impact of climate change on Egypt's energy sector, offering evidence-based recommendations to bolster energy resilience in the face of escalating climate uncertainty, thereby advancing Egypt's sustainable development goals. | ||
| Keywords | ||
| Temperature Anomalies; Energy Consumption Shocks; Economic Burden; Climate Change and VAR Methodology | ||
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