Investigating the Link Between Trade Openness and Environmental Degradation: The Case of the Organization of Turkic States

Abstract

In an era of rapidly expanding global trade, the environmental costs of trade openness (TO) are a crucial area of study in relation to sustainable development goals. This study investigates the link between TO and environmental degradation by analysing the carbon emission patterns of five developing Organization of Turkic States (OTS) members. This study employs panel data methods over the period 1993–2021 and includes economic growth (EG) and renewable energy consumption (REN) as control variables. The panel cointegration test results verify that the TO, EG, REN, and CO₂ have a long-term relationship. According to the AMG and CCEMG estimation results, TO has a significant and positive long-term impact on CO₂ emissions. This finding implies that trade liberalisation causes environmental degradation in the context of OTS countries through scale effects, and it provides empirical evidence for the Pollution Haven Hypothesis (PHH). On the other hand, the analysis illustrates that REN decreases CO₂ emissions, highlighting the importance of the energy transition to maintain environmental sustainability. The results emphasise the need to design trade policies in OTS countries with regard to the environment. Under these circumstances, it is recommended to integrate trade policies with environmental regulations, to promote and adopt green technologies for renewable energy and production, and to strengthen environment-focused regional trade cooperation mechanisms in the OTS countries. JEL Classification : C33 , Q50 , Q56

Keywords

• Trade Openness
• CO₂ Emissions
• Environmental Degradation
• Organization of Turkic States
• Panel Data Analysis

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