Proceedings of the 17th International Academic Conference, Vienna

THE RELATIONSHIP BETWEEN RENEWABLE ENERGY CONSUMPTION AND CARBON EMISSIONS IN TURKEY: AN ARDL BOUNDS TESTING APPROACH

FAHRI SEKER, MURAT CETIN

Abstract:

This paper deals with the relationship between renewable energy consumption and carbon emissions by incorporating economic growth, population density and trade openness as potential determinants of environmental pollution function in case of Turkey over the period 1960 to 2010. The ARDL bounds testing approach to cointegration and vector error correction model (VECM) are used to investigate the long-run and causal relationships between the variables. The empirical results reveal that there exist a long-run equilibrium relationship between renewable energy consumption, economic growth, population density, trade openness and carbon emissions. The empirical results also reveal that renewable energy consumption has a negative long run effect on carbon emissions. There exists an evidence supporting the presence of a positive relationship between carbon emissions and the other variables in the long run. However, there exists no evidence of short run relationship between renewable energy consumption and carbon emissions. The results show bi-directional long run Granger causality between trade openness, population density and carbon emissions and also uni-directional Granger causality running from economic growth and renewable energy consumption to carbon emissions in the long run. Besides, the findings present some policy implications for Turkish economy.

Keywords: Carbon emissions, Renewable energy consumption, ARDL bounds test, VECM Granger causality, Turkey

DOI: 10.20472/IAC.2015.017.078

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