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.