The Impact of Energy Consumption on Carbon Emissions in Turkish Economy

Abstract

The main aim of this study is to emprically investigate the impact of energy consumption on carbon emissions in Turkish economy over the period of 1960-2014 in the context of Environmental Kuznets Curve (EKC) hypothesis. Based on the existing literature, economic growth, trade openness and financial development are added to the empirical models as other independent variables. The stationarity properties of the variables are conducted by the Ng-Perron and PP tests. The presence of cointegration between the variables is analyzed by the Johansen-Juselius and Phillips-Ouliaris tests. The long run parameters are estimated by the Generalized Method of Moments (GMM) and Dynamic OLS (DOLS) estimators. Empirical results indicate that the variables are stationary at their first difference and cointegrated. The presence of EKC hypothesis is confirmed for Turkish economy. Empirical results also indicate that energy consumption increases carbon emissions. The study can provide important policy implications for Turkish economy.