The impact of output volatility on CO(2) emissions in Turkey: testing EKC hypothesis with Fourier stationarity test

Genç, Murat Can; Ekinci, Aykut; Sakarya, Burçhan

This study uses the output volatility–augmented environmental Kuznets curve (EKC) model to determine the dynamic short- and long-term impacts of the volatility of economic growth (VOL) on carbon dioxide (CO(2)) emissions in Turkey from 1980 to 2015. The results of the autoregressive distributed lag (ARDL) approach indicate that there is a long-run relationship between CO(2), per capita real GDP, per capita energy use, and VOL. The coefficients obtained from the ARDL estimation indicate that economic growth and energy use increase CO(2) emissions, while VOL decreases CO(2) emissions in the long run. Moreover, the coefficients obtained from the ARDL error correction model show that VOL decreases CO(2) emissions in the short run, as well. We also find that the EKC is valid in Turkey. This implies for the Turkish case that achieving macro-stability under a “just transition” is key for achieving both economic and environmental benefits from ratifying international agreements such as Paris Agreement and EU Green Deal.