The renewable energy, growth and environmental Kuznets curve in Turkey: An ARDL approach

This study examines the potential of renewable energy sources in reducing the impact of GHG emissions in Turkey. Using Autoregressive Distributed Lag (ARDL) approach, the relationship between CO2 emissions, electricity generated using renewables and GDP in Turkey has been investigated during 1961–2010. Moreover, the validity of Environmental Kuznets Curve (EKC) hypothesis has been tested. Model results show that the coefficient of electricity production from renewable sources (hydro power excluded) with respect to CO2 emissions is negative and significant in the long run. Although this effect is positive and statistically significant in the short run, since the ECM term is −0.82, it becomes negative around 1 year. This means that renewable electricity production will contribute to environmental enhancement with a one year lag. Our results also suggest a U-shaped (EKC) relationship between per capita GHGs and income. Estimations from a long-run regression show that, although the peak point of GDP per capita has been calculated to be 9920 US Dollars, this turning point was outside of the observed sample period. Therefore, GHG emissions start to decrease with an increase in per capita GDP in the following years. Model research implies the potential and the importance of renewable energy sources in controlling of emissions in Turkey.

[1]  J. Kraft,et al.  Relationship between energy and GNP , 1978 .

[2]  H. Pao,et al.  Modeling and forecasting the CO 2 emissions, energy consumption, and economic growth in Brazil , 2011 .

[3]  Nicholas Apergis,et al.  CO2 emissions, energy usage, and output in Central America , 2009 .

[4]  A. Robalino-López,et al.  Studying the relationship between economic growth, CO2 emissions, and the environmental Kuznets curve in Venezuela (1980–2025) , 2015 .

[5]  Perry Sadorsky.  Renewable energy consumption, CO2 emissions and oil prices in the G7 countries , 2009 .

[6]  Mine Tükenmez,et al.  Renewable energy policy in Turkey with the new legal regulations , 2012 .

[7]  J. Ang.  CO2 emissions, energy consumption, and output in France , 2007 .

[8]  A. López-Menéndez,et al.  Environmental costs and renewable energy: re-visiting the Environmental Kuznets Curve. , 2014, Journal of environmental management.

[9]  Peter C. B. Phillips,et al.  Statistical Inference in Instrumental Variables Regression with I(1) Processes , 1990 .

[10]  P. Phillips,et al.  Testing the null hypothesis of stationarity against the alternative of a unit root: How sure are we that economic time series have a unit root? , 1992 .

[11]  W. Fuller,et al.  LIKELIHOOD RATIO STATISTICS FOR AUTOREGRESSIVE TIME SERIES WITH A UNIT ROOT , 1981 .

[12]  B. Ewing,et al.  Energy consumption, income, and carbon emissions in the United States , 2007 .

[13]  Chien-Chiang Lee,et al.  A Panel Data Analysis of the Demand for Total Energy and Electricity in OECD Countries , 2010 .

[14]  Ferda Halicioğlu,et al.  An econometric study of CO2 emissions, energy consumption, income and foreign trade in Turkey , 2009 .

[15]  Jang C. Jin,et al.  Cointegration tests of energy consumption, income, and employment , 1992 .

[16]  G. A. Marrero.  Greenhouse gases emissions, growth and the energy mix in Europe: a dynamic panel data approach , 2009 .

[17]  Wei Ming Huang,et al.  GHG emissions, GDP growth and the Kyoto Protocol: A revisit of Environmental Kuznets Curve hypothesis , 2008 .

[18]  Kees van Montfort,et al.  Energy consumption and GDP in Turkey: is there a co-integration relationship? , 2007 .

[19]  D. Shaw,et al.  Economic Growth and the Environmental Kuznets Curve in Taiwan: A Simultaneity Model Analysis , 2004 .

[20]  B. Saboori,et al.  The Potentialof Renewable Energy: Using The Environmental Kuznets Curve Model , 2013 .

[21]  Ramazan Sari,et al.  Energy consumption and GDP: causality relationship in G-7 countries and emerging markets , 2003 .

[22]  S. Johansen.  Likelihood-Based Inference in Cointegrated Vector Autoregressive Models , 1996 .

[23]  Xingping Zhang,et al.  Energy consumption, carbon emissions, and economic growth in China , 2009 .

[24]  Soumyananda Dinda.  Environmental Kuznets Curve Hypothesis: A Survey , 2004 .

[25]  Yasemin Dumrul.  THE RELATIONSHIP BETWEEN ECONOMIC GROWTH AND ENVIRONMENTAL POLLUTION: THE ESTIMATION OF ENVIRONMENTAL KUZNETS CURVE WITH A COINTEGRATION ANALYSIS OF STRUCTURAL BREAKS FOR TURKISH ECONOMY , 2012 .

[26]  A. Jalil,et al.  Environment Kuznets curve for CO2 emissions: A cointegration analysis for China , 2009 .

[27]  J. E. Payne,et al.  Renewable and non-renewable energy consumption-growth nexus: Evidence from a panel error correction model , 2012 .

[28]  Richard J. Smith,et al.  Bounds testing approaches to the analysis of level relationships , 2001 .

[29]  H. M’henni,et al.  Energy Consumption, Economic Growth and CO2 Emissions in Middle East and North African Countries , 2012, SSRN Electronic Journal.

[30]  Jin-Li Hu,et al.  Renewable energy: An efficient mechanism to improve GDP , 2008 .

[31]  Umit Erol,et al.  Time series analysis of the causal relationships between U.S. energy and employment , 1987 .

[32]  Muhammad Shahbaz,et al.  What role of renewable and non-renewable electricity consumption and output is needed to initially mitigate CO2 emissions in MENA region? , 2014 .

[33]  Sun Bo,et al.  A Literature Survey on Environmental Kuznets Curve , 2011 .

[34]  Ilhan Ozturk,et al.  On the relationship between energy consumption, CO2 emissions and economic growth in Europe , 2010 .

[35]  P. Narayan,et al.  The saving and investment nexus for China: evidence from cointegration tests , 2005 .

[36]  R. E. Omay.  The Relationship between Environment and Income:Regression Spline Approac , 2013 .

[37]  S. Johansen.  STATISTICAL ANALYSIS OF COINTEGRATION VECTORS , 1988 .

[38]  C. S. Holling,et al.  Economic growth, carrying capacity, and the environment , 1995, Environment and Development Economics.

[39]  E. Zervas,et al.  The Environmental Kuznets Curve (EKC) theory—Part A: Concept, causes and the CO2 emissions case , 2013 .

[40]  R. Kaufmann,et al.  Is there a turning point in the relationship between income and energy use and/or carbon emissions? , 2006 .

[41]  Elif Akbostancı,et al.  The relationship between income and environment in Turkey: Is there an environmental Kuznets curve? , 2009 .

[42]  G. Grossman,et al.  Economic Growth and the Environment , 1994 .

[43]  S. Johansen,et al.  MAXIMUM LIKELIHOOD ESTIMATION AND INFERENCE ON COINTEGRATION — WITH APPLICATIONS TO THE DEMAND FOR MONEY , 2009 .

[44]  Jin-Li Hu,et al.  Renewable energy and macroeconomic efficiency of OECD and non-OECD economies , 2007 .

[45]  N. Shafik.  Economic Development and Environmental Quality: An Econometric Analysis , 1994 .

[46]  J. E. Payne,et al.  Renewable energy consumption and economic growth: Evidence from a panel of OECD countries , 2010 .

[47]  D. Holtz-eakin,et al.  Stoking the Fires? Co2 Emissions and Economic Growth , 1992 .

[48]  Sarantis Lolos,et al.  Energy consumption and economic growth: assessing the evidence from Greece , 2002 .

[49]  J. E. Payne,et al.  A survey of the electricity consumption-growth literature , 2010 .

[50]  C. Granger,et al.  Co-integration and error correction: representation, estimation and testing , 1987 .

[51]  A. M. Masih,et al.  Energy consumption, real income and temporal causality: results from a multi-country study based on cointegration and error-correction modelling techniques , 1996 .

[52]  Christophe Rault,et al.  The Environmental Kuznets Curve and Sustainability: A Panel Data Analysis , 2014, SSRN Electronic Journal.

[53]  J. E. Payne,et al.  The emissions, energy consumption, and growth nexus: Evidence from the commonwealth of independent states , 2010 .

[54]  D. Stern.  The Rise and Fall of the Environmental Kuznets Curve , 2004 .

[55]  M. Mert,et al.  Fossil & renewable energy consumption, GHGs (greenhouse gases) and economic growth: Evidence from a panel of EU (European Union) countries , 2014 .

[56]  Perry Sadorsky.  Renewable energy consumption and income in emerging economies , 2009 .

[57]  Terciane Sabadini Carvalho,et al.  THE GLOBALENVIRONMENTAL KUZNETS CURVE AND THE KYOTO PROTOCOL , 2011 .