The Dynamic Implications of Globalization and Renewable Energy in Turkey: Are They Vital for Environmental Sustainability? An SVAR Analysis

Year 2021, Volume: 23 Issue: 2, 288 - 314, 30.11.2021

Mohammed Alnour Hayriye Atik

Abstract

This study aims to analyze the dynamic effect of renewable energy use and globalization on the environmental quality in Turkey by utilizing quarterly time series data spanning the period 1990- 2017. After identifying the series order of stationarity by utilizing ADF test, this study makes use of SVAR model. The reason is that SVAR is powerful method in testing contemporaneous and past shock among the variables. In addition, SVAR is the powerful in variance decomposition and the possibility of observing long run forecast. The results disclose that environmental quality reacts negatively to the shocks in hydro energy and economic growth, while the globalization seems positively impact the degradation of the environment. These outcomes are consistent with relevant theories and empirical findings. The only striking result is the positive impact of biofuel and waste energy on the environment. Although Turkey has recently implemented a range of energy policies to promote renewables but some challenges still there, future policymaking should enhance the development in renewables and create more competitive environment for investment in the renewables market.

Keywords

Turkey, SVAR, globalization, renewable energy, and ecological footprint

The Dynamic Implications of Globalization and Renewable Energy in Turkey

Abstract

This study aims to analyze the dynamic effect of renewable energy use and globalization on the environmental quality in Turkey by utilizing quarterly time series data spanning the period 1990- 2017. After identifying the series order of stationarity by utilizing ADF test, this study makes use of SVAR model. The reason is that SVAR is powerful method in testing contemporaneous and past shock among the variables. In addition, SVAR is the powerful in variance decomposition and the possibility of observing long run forecast. The results disclose that environmental quality reacts negatively to the shocks in hydro energy and economic growth, while the globalization seems positively impact the degradation of the environment. These outcomes are consistent with relevant theories and empirical findings. The only striking result is the positive impact of biofuel and waste energy on the environment. Although Turkey has recently implemented a range of energy policies to promote renewables but some challenges still there, future policymaking should enhance the development in renewables and create more competitive environment for investment in the renewables market.

Keywords

SVAR, globalization, renewable energy, and ecological footprint, Turkey

References

• Adebayo, T. S., & Kirikkaleli, D. (2021), “Impact of Renewable Energy Consumption, Globalization, And Technological Innovation on Environmental Degradation in Japan: Application of Wavelet Tools”, Environment, Development and Sustainability, 1-26.
• Adewuyi, A.O., and Awodumi, O.B., (2017), “Biomass Energy Consumption, Economic Growth and Carbon Emissions: Fresh Evidence from West Africa Using a Simultaneous Equation Model”, Energy, 119: 453-471.
• Ahmed, A., Uddin, G.S. and Sohag, K., (2016), “Biomass Energy, Technological Progress and The Environmental Kuznets Curve: Evidence from Selected European Countries”, Biomass and Bioenergy, 90:202-208.
• Al-Mulali, U., Saboori, B., & Ozturk, I. (2015), “Investigating the Environmental Kuznets Curve Hypothesis in Vietnam”, Energy Policy, 76: 123-131
• Alnour, M., Abdalla, A., Khalil & Alzain, A. (2021), “Does Trade Openness Promote Economic Growth? The Case of Sudan”, Sudanese Online Research Journal, 2(2): 123-132.
• Aslam, B., Hu, J., Hafeez, M., Ma, D., AlGarni, T. S., Saeed, M., ... & Hussain, S. (2021), “Applying Environmental Kuznets Curve Framework to Assess the Nexus of Industry, Globalization, And CO2 Emission”, Environmental Technology & Innovation, 21: 101377.
• Bilgili, F., Koçak, E. and Bulut, Ü., (2016), “The Dynamic Impact of Renewable Energy Consumption on CO2 Emissions: A Revisited Environmental Kuznets Curve Approach”, Renewable and Sustainable Energy Reviews, 54:838-845.
• Boamah, K. B., Du, J., Bediako, I. A., Boamah, A. J., Abdul-Rasheed, A. A., & Owusu, S. M. (2017), “Carbon Dioxide Emission and Economic Growth of China—The Role of International Trade”, Environmental Science and Pollution Research, 24(14): 13049-13067.
• Destek, M. A., & Aslan, A. (2020), “Disaggregated Renewable Energy Consumption and Environmental Pollution Nexus In G-7 Countries”, Renewable Energy, 151: 1298-1306.
• Dickey, David. A. and Wayne Fuller. A. (1979), “Distribution of The Estimators for Autoregressive Time Series with A Unit Root. Journal of the American Statistical Association, 74(366): 427-431.
• Dreher, A. (2006), “Does Globalization Affect Growth? Evidence From a New Index of Globalization”, Applied Economics, 38(10): 1091–1110.
• Dreher, A., Gaston, N., & Martens, P. (2008), “Measuring Globalization - Gauging Its Consequences”, New York: Springer
• Enders, W. (2015), “Applied Econometric Time Series”, 4th edition. John Wily & Sons, Hoboken.
• Gao, J. and Zhang, L., (2021), “Does Biomass Energy Consumption Mitigate CO2 Emissions? The Role of Economic Growth and Urbanization: Evidence from Developing Asia”, Journal of the Asia Pacific Economy, 26: 96-115.
• Gygli, S., Haelg, F., Potrafke, N., & Sturm, J. E. (2019), “The KOF Globalisationindex–Revisited”, The Review of International Organizations, 14(3): 543-574.
• Hassan, S. T., Baloch, M. A., &Tarar, Z. H. (2020), “Is Nuclear Energy a Better Alternative for Mitigating CO2 Emissions in BRICS Countries? An Empirical Analysis”, Nuclear Engineering and Technology, 52(12): 2969-2974.
• Haseeb, A., Xia, E., Baloch, M. A., & Abbas, K. (2018), “Financial Development, Globalization, And CO 2 Emission in The Presence Of EKC: Evidence from BRICS Countries”, Environmental Science and Pollution Research, 25(31): 31283-31296.
• Ibrahim, R. L., &Ajide, K. B. (2021), “Nonrenewable and Renewable Energy Consumption, Trade Openness, And Environmental Quality In G-7 Countries: The Conditional Role of Technological Progress”, Environmental Science and Pollution Research, 1-18.
• Ibrahim, M. H., & Sufian, F. (2014), “A Structural VAR Analysis of Islamic Financing in Malaysia”, Studies in Economics and Finance.
• Johansen, S. (1988), “Statistical Analysis of Cointegration Vectors”, Journal of economic dynamics and control, 12(2-3): 231-254.
• Jun, W., Mughal, N., Zhao, J., Shabbir, M. S., Niedbała, G., Jain, V., & Anwar, A. (2021), “Does Globalization Matter for Environmental Degradation? Nexus Among Energy Consumption, Economic Growth, And Carbon Dioxide Emission”, Energy Policy, 153: 112230.
• Kalayci, C. (2019), “The Impact of Economic Globalization on CO2 Emissions: The Case of NAFTA Countries”, International Journal of Energy Economics and Policy, 9(1): 356.
• Karasoy, A., &Akçay, S. (2019), “Effects of Renewable Energy Consumption and Trade on Environmental Pollution: The Turkish Case. Management Of Environmental Quality”, An International Journal.
• Khan, M. K., Teng, J. Z., Khan, M. I., & Khan, M. O. (2019), “Impact of Globalization, Economic Factors and Energy Consumption on CO2 Emissions in Pakistan”, Science of the total environment, 688: 424-436.
• Khan, M. W. A., Panigrahi, S. K., Almuniri, K. S. N., Soomro, M. I., Mirjat, N. H., &Alqaydi, E. S. (2019), “Investigating the Dynamic Impact of CO2 Emissions and Economic Growth on Renewable Energy Production: Evidence from FMOLS And DOLS Tests. Processes, 7(8): 496.
• Lacheheb, M., Rahim, A. A., &Sirag, A. (2015), “Economic Growth and Carbon Dioxide Emissions: Investigating the Environmental Kuznets Curve Hypothesis in Algeria”, International Journal of Energy Economics and Policy, 5(4): 1125-1132.
• Liu, M., Ren, X., Cheng, C., & Wang, Z. (2020), “The Role of Globalization in CO2 Emissions: A Semi-Parametric Panel Data Analysis for G7”, Science of the Total Environment, 718: 137379.
• Magazzino, C., Mele, M., Schneider, N., & Shahbaz, M. (2021), “Can Biomass Energy Curtail Environmental Pollution? A Quantum Model Approach to Germany”, Journal of Environmental Management, 287: 112293.
• Nguyen, T., & Le, Q. (2020), “Impact of Globalization on CO2 Emissions in Vietnam: An Autoregressive Distributed Lag Approach” Decision Science Letters, 9(2): 257-270.
• Nkoro, E., &Uko, A. K. (2016), “Autoregressive Distributed Lag (ARDL) Cointegration Technique: Application and Interpretation”, Journal of Statistical and Econometric methods, 5(4): 63-91.
• Obobisa, E. S., Chen, H., Boamah, K. B., Ayamba, E. C., Mensah, C. N., &Amowine, N. (2021), “Environmental Pollution of China to Foreign Investors: Detrimental or Beneficial? Environmental Science and Pollution Research, 28(11): 13133-13150.
• Pata, U. K. (2021), “Renewable and Non-Renewable Energy Consumption, Economic Complexity, CO 2 Emissions, And Ecological Footprint in the USA: Testing the EKC Hypothesis with A Structural Break”, Environmental Science and Pollution Research, 28(1): 846-861.
• Pata, U. K. (2021), “Linking Renewable Energy, Globalization, Agriculture, CO2 Emissions and Ecological Footprint in BRIC Countries: A Sustainability Perspective”, Renewable Energy, 173: 197-208.
• Padhan, H., Padhang, P. C., Tiwari, A. K., Ahmed, R., & Hammoudeh, S. (2020), “Renewable Energy Consumption and Robust Globalization (S) In OECD Countries: Do Oil, Carbon Emissions and Economic Activity Matter”? Energy Strategy Reviews, 32: 100535.
• Rahman, M. M., &Alam, K. (2021), “Clean Energy, Population Density, Urbanization, And Environmental Pollution Nexus: Evidence from Bangladesh”, Renewable Energy, 172: 1063-1072.
• Sarkodie, S. A., Adams, S., & Leirvik, T. (2020), “Foreign Direct Investment and Renewable Energy in Climate Change Mitigation: Does Governance Matter? Journal of Cleaner Production, 263: 121262.
• Sarkodie, S. A., Adams, S., Owusu, P. A., Leirvik, T., & Ozturk, I. (2020), “Mitigating Degradation and Emissions in China: The Role of Environmental Sustainability, Human Capital and Renewable Energy”, Science of the Total Environment, 719: 137530.
• Shahbaz, M., Balsalobre, D. and Shahzad, S.J.H., (2019), “The Influencing Factors of CO 2 Emissions and The Role of Biomass Energy Consumption: Statistical Experience From G-7 Countries”, Environmental Modeling & Assessment, 24:143-161.
• Shahbaz, M., Shahzad, S. J. H., &Mahalik, M. K. (2018), “Is Globalization Detrimental to CO 2 Emissions in Japan? New Threshold Analysis. Environmental Modeling & Assessment, 23(5): 557-568.
• Shafiei, S., & Salim, R. A. (2014), “Non-Renewable and Renewable Energy Consumption and CO2 Emissions in OECD Countries: A Comparative Analysis”, Energy Policy, 66: 547-556.
• Sirag, A., Matemilola, B. T., Law, S. H., &Bany-Ariffin, A. N. (2018), “Does Environmental Kuznets Curve Hypothesis Exist? Evidence From Dynamic Panel Threshold”, Journal of environmental economics and policy, 7(2): 145-165.
• Sims, C. A. (1980), “Macroeconomics and Reality. Econometrica”, journal of the Econometric Society, 1-48.
• Solarin, S.A., Al-Mulali, U., Gan, G.G.G. and Shahbaz, M., (2018), “The Impact of Biomass Energy Consumption on Pollution: Evidence From 80 Developed and Developing Countries”, Environmental Science and Pollution Research. 25: 22641-22657.
• Solarin, S. A., and Bello, M. O. (2018), “Persistence of Policy Shocks to An Environmental Degradation Index: The Case of Ecological Footprint In 128 Developed and Developing Countries”, Ecological indicators, 89” 35-44.
• Syed, A. A., Kamal, M. A., & Tripathi, R. (2021), “An Empirical Investigation of Nuclear Energy and Environmental Pollution Nexus in India: Fresh Evidence Using NARDL Approach”, Environmental Science and Pollution Research, 1-12.
• Sulaiman, C., and Abdul-Rahim, A.S., (2020), “Can Clean Biomass Energy Use Lower CO 2 Emissions in African Economies? Empirical Evidence from Dynamic Long-Run Panel Framework”, Environmental Science and Pollution Research. 27: 37699-37708.
• Uddin, G.A., Salahuddin, M., Alam, K. and Gow, J., (2017), “Ecological Footprint and Real Income: Panel Data Evidence from the 27 Highest Emitting Countries”, Ecological Indicators. 77: 166-175.
• Ulucak, R., &Ozcan, B. (2020), “Relationship Between Energy Consumption and Environmental Sustainability in OECD Countries: The Role of Natural Resources Rents”, Resources Policy, 69: 101803.
• Umar, M., Ji, X., Kirikkaleli, D. and Alola, A.A., (2021), “The Imperativeness of Environmental Quality in The United States Transportation Sector Amidst Biomass-Fossil Energy Consumption and Growth”, Journal of Cleaner Production, 285:124863.
• Van, D. T. B., & Bao, H. H. G. (2018), “The Role of Globalization on CO2 Emission In Vietnam Incorporating Industrialization, Urbanization, GDP Per Capita And Energy Use”, International Journal of Energy Economics and Policy, 8(6): 275.
• Wang, Z., (2019), “Does Biomass Energy Consumption Help to Control Environmental Pollution? Evidence From BRICS Countries”, Science of the total environment. 670:1075-1083.
• You, W., &Lv, Z. (2018), “Spillover Effects of Economic Globalization on CO2 Emissions: A Spatial Panel Approach”, Energy Economics, 73: 248-257.
• Yurtkuran, S. (2021), “The Effect of Agriculture, Renewable Energy Production, And Globalization on CO2 Emissions in Turkey: A Bootstrap ARDL Approach”, Renewable Energy, 171: 1236-1245.
• Zafar, M.W., Sinha, A., Ahmed, Z., Qin, Q. and Zaidi, S.A.H., (2021), “Effects of Biomass Energy Consumption on Environmental Quality: The Role of Education and Technology in Asia-Pacific Economic Cooperation Countries”, Renewable and Sustainable Energy Reviews, 142:110868.
• Zaidi, S. A. H., Zafar, M. W., Shahbaz, M., & Hou, F. (2019), “Dynamic Linkages Between Globalization, Financial Development and Carbon Emissions: Evidence from Asia Pacific Economic Cooperation Countries. Journal of Cleaner Production, 228: 533-543.