A Causality Analysis of Economic Growth and Primary Energy Supply in Türkiye's Economy

Introduction

Energy has been an indispensable part of human life by using it in different ways for different purposes from the primitive ages to the present day. Technological developments that make life easier for people inevitably increase energy consumption (briefly EC). With the events such as the industrial revolutions, the second world war and oil shocks, the effect of energy on society and economy has gradually increased and clean energy technologies additionally gained importance during the third and the fourth industrial revolutions (Okur Dinçsoy, 2020). The use of energy, which is one of the important needs of life and humanity, as an input in production increases the importance of energy in terms of economic growth. Countries make great efforts to avoid events that will hinder their economic development. In order for countries to grow and develop economically, they must increase their production levels in a way that does not disrupt their foreign trade balance (Kazaz & Dinçsoy, 2019). With the increase in production, EC will also increase and it will be an essential input to the energy production process (Yanar & Kerimoğlu, 2011).

Although macroeconomic stability is an indispensable part of a sustainable economic growth, it is directly or indirectly affected by several internal and external progresses (Dinçsoy & Okur Dinçsoy, 2020). Energy is also an important civilization tool and is a critical factor that provides information about the development levels of countries around the world. The fact that the production costs of countries with energy resources decreases significantly makes energy a strategic product. Therefore, countries aim to increase energy production regionally and globally and to become a regional trade center in energy. Factors such as reducing foreign dependency in energy, increasing the use of national resources, increasing the rate of renewable energy sources (briefly RES) in the local energy mix are among the strategies developed by countries in order to contribute to their economies (MFA, 2023).

The unequal distribution of energy in the world, scarcity of energy, environmental pollution and the need for new energy sources have necessitated some developments in the system of economic thought. In addition to these, increasing environmental problems have increased the importance of RES, which are a sustainable energy source in the world. RES are important in terms of preventing environmental pollution caused by carbon emissions and meeting the increasing energy need (Karamıklı & Şaşmaz, 2021). Renewable energy source is defined as “the energy source that can be available the next day in the evolution of nature itself” (Republic of Türkiye Ministry of Foreign Affairs, 2023). The most important feature of RES is that they are environmentally friendly by reducing carbon dioxide emissions. In addition, the fact that it reduces foreign dependency in energy due to its domestic nature increases the importance that should be given to RES. Wind energy, wood, geothermal energy, hydrogen energy, biomass energy, hydroelectric energy, wave energy and solar are among the RES. Being clean and sustainable means that RES have low carbon emissions, and that they are produced in harmony with the environment without harming the natural balance of the world, leaving a clean world for future generations (Republic of Türkiye Ministry of Foreign Affairs, 2023).

It is needed to ascend the importance given to RES in order to use energy resources effectively, to descent of energy costs in the economy and to protect the environment. Increasing the allocation of RES in EC and reducing energy import dependency constitute an important part of energy policies. Some of the policies that countries should implement in order to minimize sustainable growth and environmental problems are as follows: Supporting RES, increasing domestic production, diversification of energy sources, increasing and promoting production facilities based on RES, subsidies to investments made by the private sector in this area and/or introduction of applications such as low-interest loans (Republic of Türkiye Ministry of Foreign Affairs, 2023).

Energy, along with many different economic indicators, has been studied by many authors. In this study, it is aimed to provide a broader perspective on the concept of energy by using the concept of energy export, energy import, energy production, international bunkers and stock changes, which are all evaluated together and defined as primary energy supply by the OECD.