Formulating Eco-Friendly Strategies: Transition to Green Economy

Turkey is attempting to achieve carbon neutrality targets by implementing environmentally friendly techniques. This study aims to assess the short- and long-term relationships between Turkey’s annual carbon emissions and economic growth, as well as annual electricity generation from renewable fossil fuels. Data for this study were obtained from the World Bank and the official website of the Turkish Statistical Institute (TURKSTAT) from 1986 to 2020. The Autoregressive Distributed Lag Bound Test (ARDL) technique was used to estimate variable cointegration. The cointegration test shows a long-run relationship between the selected variables. A 1% increase in the GDP, COAL, and PTRLGZ variables increases CO2 emissions by 0.65%, 33%, and 7%, respectively. The RE variable was found to have a negative effect on CO2 emissions. The effect of the RE variable on CO2 emissions is −0.10. This result indicates that a 1% increase in the RE variable reduces CO2 emissions by 0.10%. Looking at the short-term data, the error correction coefficient (CointEq (−1)) was found to be negative (−0.832) and significant. Based on the error correction variable, it is expected that the short-run deviations from equilibrium will be corrected and that a long-run equilibrium will be reached in less than one year. The long-run results also suggest that the factors used in the model have a statistically significant effect on the dependent variable. While this effect is negative for annual electricity production from renewable energy sources, it is positive for annual electricity production from fossil fuels and gross domestic product (GDP).