The Impact of Financial Development, Foreign Direct Investment and Geopolitical Risk on CO2 Emissions: Evidence from Turkey

Year 2024, Volume: 8 Issue: 3, 1617 - 1640, 27.09.2024

Şehmus Aydın , Ferhat Öztutuş , İbrahim Halil Polat

https://doi.org/10.25295/fsecon.1513450

Abstract

The rise in greenhouse gas emissions, particularly carbon dioxide (CO₂), represents one of the most significant challenges facing humanity's existence in the 21st century. It is crucial to implement the measures to reduce these emissions to achieve environmental sustainability. Turkey, along with many nations, is striving to reduce its CO₂ emissions in accordance with the United Nations' 2030 Sustainable Development Goals. This study explores the effects of financial development (FIN), foreign direct investment (FDI), and geopolitical risk (GPR) on Turkey's CO₂ emissions, using annual data from 1985 to 2022. To investigate long-term relationships among these variables, we apply the RALS-Fourier ADF (RALS-FADF) unit root test, the Fractional Fourier ADL (FFADL) cointegration test, and the Fully Modified Ordinary Least Squares (FMOLS) method. The evidence from the FMOLS show that FIN, FDI, and GPR lead to higher CO2 emissions in Turkey over time. It is concluded that any policies designed to achieve a sustainable environmental quality in Turkey must consider mitigating the negative effects of the financial development, foreign direct investment and geopolitical risks on the environment.

Keywords

CO2 Emissions, Financial Development, Foreign Direct Investment, Geopolitical Risk, Turkey

Finansal Gelişme, Doğrudan Yabancı Yatırımlar ve Jeopolitik Riskin CO2 Emisyonları Üzerindeki Etkisi: Türkiye'den Kanıtlar

Abstract

Başta karbondioksit (CO₂) olmak üzere sera gazları emisyonlarındaki artış, 21. yüzyılda insanlığın karşı karşıya olduğu en önemli zorluklardan birini teşkil etmektedir. Çevresel sürdürülebilirliğin sağlanması için bu emisyonların azaltılmasına yönelik tedbirlerin uygulanması büyük önem taşımaktadır. Türkiye, birçok ülke ile birlikte, Birleşmiş Milletler'in 2030 Sürdürülebilir Kalkınma Hedefleri doğrultusunda CO₂ emisyonlarını azaltmaya çalışmaktadır. Bu bağlamda bu çalışma, 1985-2022 yılları arasındaki yıllık verileri kullanarak, finansal gelişme (FIN), doğrudan yabancı yatırımlar (FDI) ve jeopolitik riskin (GPR) Türkiye'deki CO₂ emisyonları üzerindeki etkilerini araştırmaktadır. Değişkenler arasındaki uzun vadeli ilişkileri ortaya koymak için RALS-Fourier ADF (RALS-FADF) birim kök testi, Kesirli Fourier ADL (FFADL) eşbütünleşme testi ve Tam Düzeltilmiş Sıradan En Küçük Kareler (FMOLS) yöntemleri kullanılmıştır. FMOLS metodundan elde edilen araştırma bulguları, FIN, FDI ve GPR'nin Türkiye'de uzun dönemde CO2 emisyonunu arttırdığını göstermektedir. Dolayısıyla, Türkiye'de sürdürülebilir bir çevre kalitesine ulaşabilmek için, finansal kalkınma, doğrudan yabancı yatırımlar ve jeopolitik risklerle ilgili olarak tasarlanacak politikaların çevre üzerindeki olumsuz etkilerini en aza indirecek şekilde tasarlanması gerekmektedir.

Keywords

CO2 Emisyonları, Finansal Kalkınma, Doğrudan Yabancı Yatırım, Jeopolitik Risk, Türkiye

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