Renewables or Fossils: How Economic Growth and Financial Development Shape Egypt’s Energy Demand Under Globalization and Ecological Constraints

Energy remains fundamental to economic growth and national development, yet Egypt faces a persistent challenge in expanding energy supply without deepening dependence on conventional sources. Although earlier studies examined the determinants of energy use, limited evidence exists on whether macroeconomic and environmental factors differently affect renewable energy consumption (REC) and non-renewable energy consumption (NREC) in the Egyptian context. This study addresses this problem by examining the roles of economic growth, financial development, the ecological footprint, and economic globalization in shaping REC and NREC in Egypt over the period 1970 to 2024. To achieve this objective, the study employs the Autoregressive Distributed Lag (ARDL) approach, which is suitable for estimating short-run dynamics and long-run relationships among variables with mixed orders of integration. The results indicate that across the REC models, economic growth increases renewable consumption, while the ecological footprint reduces it, indicating that environmental pressure has not translated into stronger REC. Financial development exhibits as a negative in the long run, suggesting finance has not been consistently directed toward renewables. Although economic globalization is insignificant, trade and financial globalization reduce REC in the long run. For the NREC models in the long run, GDP, financial development, and ecological footprint increase NREC. Economic, trade, and financial globalization effects are mostly insignificant for NREC, implying that domestic fundamentals drive conventional energy use. Thus, the findings suggest that Egypt’s energy structure is still driven more by domestic growth and financial conditions than by external integration. However, these results should be interpreted as evidence of association within the ARDL framework rather than proof of causality. The study therefore highlights the need for policies that align economic growth with renewable energy expansion, improve the direction of finance toward green investment, and strengthen the institutional conditions necessary to support a more sustainable energy transition