Relationship Between the Use of Renewable Energy, Carbon Dioxide Emission, and Economic Growth: An Empirical Application on Turkey

Introduction

The term “renewable energy” is energy from a wide range of sources, all based on self-regenerating energy sources such as wind, sunlight, running water, earth's internal heat, and biomass such as agricultural, energy crops and industrial waste and municipal waste (Bull, 2001; Demirbaş, 2006). Renewable energy (RE) sources can be utilized in many areas such as electricity, transportation and heating for various economic sectors all over the world.

Economic and social problems related to energy security and global warming increase awareness on the need for RE consumption day by day (Sadorsky, 2009b). Many countries face a serious challenge of growing their economies without disrupting the environment, and it is important to consider environmental quality as a key factor in development strategies to achieve this goal (Hoang Phong et al., 2018). Studies reveal that non-RE consumption increases carbon dioxide emissions (CO2-E), while RE consumption reduces CO2-E. In this context, good renewable energy is also a good substitute (Shafiei & Salim, 2014; Zoundi, 2017). Strategically, governments should provide necessary incentives for using RE for CO2-E, as well as increasing public awareness on climate change and CO2 (Xu et al., 2019).

There are many opinions on the relationship between RE, economic growth (EG) and CO2. The general view is that RE positively affects EG (Bakırtaş & Çetin, 2016; Çınar & Yılmazer, 2015; Emir & Bekun, 2019; Koçak & Şarkgüneşi, 2017; Ntanos et al., 2018; Rahman & Velayutham, 2020). It is also stated that there is a positive relationship between RE consumption and economic development (Özşahin et al., 2016). The use of RE has proved to be effective in reducing CO2-E (Apergis et al., 2010; Menyah & Wolde-Rufael, 2010; Qi et al., 2014). However, whether it is at the desired level is still a matter of debate (Menyah & Wolde-Rufael, 2010). In some studies, it is stated that there is no long or short term causality between CO2-E and RE consumption (Lin & Moubarak, 2014). It is also claimed that CO2 emission increases per capita RE consumption (Sadorsky, 2009a). RE is important for EG and likewise encourages greater use of RE resources in EG (Apergis & Payne, 2014). At the same time, the increase in per capita GDP grows the consumption of RE. In this context, it is stated that as per capita income raises, more RE is needed (Sadorsky, 2009a).

Globally, energy consumption increased by 2.3% in 2018, almost twice the average growth rate since 2010, due to a strong global economy as well as higher cooling and heating requirements in some region of the world. As a result of high energy consumption the world, CO2-E increased by 1.7% to 33.1 Gt CO2. Coal-fired electricity output continues to be the single biggest emitter, accounting for 30% of all energy-related CO2. As a result of high energy consumption, CO2-E increased by 1.7% last year and reached a new record (Global Energy & CO2 Status Report, 2019). When it comes to Turkey, a reduction in CO2 of 0.5% compared to 2017 was observed. However, when the period of 1990-2018 is examined in general, an increase of 176.7% was seen in CO2-E. In 2018, the biggest share in CO2-E was energy-related emissions with 71.6%, followed by industrial processes and product use with 12.5%, agricultural activities with 12.5% and waste with 3.4% (TUIK, 2020). Greenhouse gas per capita is approximately 6 million tons in Turkey. So significant investments in RE over the last 10 years took place in Turkey while it was understood that the case was of vital importance for Turkey in RE sources. According to TUIK data, that the proportion of RE from waste and electricity production in 2019 rose 43.9 percent from 26.4 percent in 2010 is an important outcome for Turkey.