In 2024, Egypt’s GDP was estimated at around $380 billion, making it the second-largest economy after South Africa, whose GDP was estimated at $403 billion. To incentivize environmentally friendly behavior, the Egyptian economy has incorporated environmental considerations into its tax system and fiscal policies over time, addressing negative externalities such as pollution and resource depletion by internalizing their costs into the prices of goods and services. Significant developments have occurred in recent years. This study examines the impact of environmental taxes on economic growth in Egypt. Using annual data from 2002 to 2020, the study employs the Autoregressive Distributed Lag (ARDL) model and the Dynamic Ordinary Least Squares (DOLS) method to investigate the long run equilibrium relationship and long-run elasticities for the Egyptian economy. The results revealed a long-run equilibrium relationship between environmental taxes and economic growth. This implies that as the economy grows, environmental degradation increases alongside it, but at a certain point, with further economic development, the environmental taxes may rise to mitigate pollution and promote sustainable practices, potentially leading to a decrease in environmental damage, in the long run, depending on the specific environmental policies implemented in Egypt. The study recommendations include identifying a critical tax level that balances environmental protection with economic impact, potentially using green tax shifts to offset other taxes and maintain revenue, and investing in resource efficiency and renewable energy to mitigate adverse effects and promote sustainable growth.