Forecasting Emissions of Carbon Dioxide (CO2), Methane (CH4) and Energy Consumption in Egypt Using VECM and ARIMAX Models

Abstract

Greenhouse gas emissions are one of the important environmental problems in Egypt that do not harm only humans, but also contribute to climate changes all over the world. The emissions of carbon dioxide (CO2) and methane (CH4) are the most important of these emissions. The decision makers seek to use renewable energies to reduce greenhouse gas emissions. Therefore, this paper aims to measure the factors affecting CO2 and CH4 emissions in Egypt during the period from 1980 to 2019 and to predict of these emissions and energy sources from 2020 to 2030. The study applied the Vector Error Correction Model (VECM) and Autoregressive Integrated Moving Average with Exogenous variables (ARIMAX) models. The study results found that the most influential variables on CO2 gas emissions are energy consumption, gross domestic product, and international trade. It was also found that livestock production, energy consumption and agricultural fertilizers are the most influential variables on CH4 emissions. It was also found that the predictability of VECM is better than the ARIMAX model, so we can use it to predict emissions of CO2 and CH4.