Drivers of carbon emissions in Turkey: considering asymmetric impacts

Abstract

This study investigates the impacts of income, (renewable and non-renewable) energy consumption, trade, and financial development on carbon dioxide emissions in Turkey for the 1965–2015 period by employing the non-linear autoregressive distributed lag method. Results show that non-renewable and renewable energy consumption, and trade openness have asymmetric impacts on pollution in long-run, while only renewable energy consumption has asymmetric impact on emissions in short-run. Results further reveal that the Environmental Kuznets Curve hypothesis is not valid in Turkey. Moreover, both financial development and trade positively affect emissions. Additionally, in long-run, positive shocks in renewable and non-renewable energy consumption increase emissions, but the impact of renewable energy consumption is infinitesimally small compared to the impact of non-renewable energy consumption. However, negative shocks in renewable energy consumption increase emissions, whereas negative developments in non-renewable energy consumption decrease emissions. Further, in short-run, positive developments in renewable energy consumption decrease emissions, and negative developments in non-renewable energy consumption have the same influence on emissions. In accordance with the findings, some policy suggestions are proposed.

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