Revisiting the role of renewable and non-renewable energy consumption on Turkey’s ecological footprint: Evidence from Quantile ARDL approach

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Highlights

  • We re-investigate the impact of renewable and non-renewable energy consumption on Turkey’s ecological footprint.

  • This study applies Quantile Autoregressive Lagged approach for the period of 1965Q1-2017Q4.

  • Renewable energy decrease ecological footprint in long-run on each quantile.

  • The results of QARDL confirmed the EKC in Turkey.

  • There is a bi-directional causal relationship between renewable energy consumption, energy consumption and economic growth with ecological footprint.

Abstract

The current study re-investigates the impact of renewable and non-renewable energy consumption on Turkey’s ecological footprint. This study applies Quantile Autoregressive Lagged (QARDL) approach for the period of 1965Q1-2017Q4. We further apply Granger-causality in Quantiles to check the causal relationship among the variables. The results of QARDL show that error correction parameter is statistically significant with the expected negative sign for all quantiles which confirm an existence of significant reversion to the long-term equilibrium connection between the related variables and ecological footprint in Turkey. In particular, the outcomes suggested that renewable energy decrease ecological footprint in long-run on each quantile. However, the results of economic growth and non-renewable energy impact positively to ecological footprint in long-short run period at all quantiles. Finally, we tested the Environmental Kuznets Curve (EKC) hypothesis and the results of QARDL confirmed the EKC in Turkey. Furthermore, the findings of causal investigation from Granger-causality in quantiles evident the presence of a bi-directional causal relationship between renewable energy consumption, energy consumption and economic growth with ecological footprint in the Turkish economy.

Introduction

When a nation tries to traverse along the path to achieve economic growth, it has to rely on its resource pool, which includes the natural and intellectual resources. During the earliest phases of this economic growth, a nation relies on the pool of natural resources, as it is easier to utilize and consume. Consumption of the natural resources helps the nations to grow, while this pattern of consumption deteriorates the environmental quality of these nations. Continuous consumption of natural resources gradually raises the level of environmental degradation, and this is the time, when the nations start to embrace the intellectual resources in pursuit of alternate energy sources. However, owing to the high implementation cost, it might not always be possible for the nations to carry out the implementation of alternate energy sources, as the implementation cost might have implications on the economic growth pattern itself. Therefore, in order to boost the industrialization in a nation, majorly fossil fuel consumption takes place in pursuit of energy generation. Because of the environmental degradation caused by the consumption of fossil fuel-based solutions, the biocapacity of the nation is hampered, as the absorptive capacity of the land, water, and air of the nation might not be sufficient for the waste generated in the due course of economic growth. This carrying capacity of the nation is generally referred to as the “Ecological footprint”. In general, ecological footprint is “the aggregate area of land and water that is claimed by participants in this economy to produce all the resources they consume and to absorb all their wastes they generate on a continuous basis, using prevailing technology” (Wackernagel and Rees, 1997). Now, as the world has ushered in the regime of Sustainable Development Goals (SDGs), it is gradually turning out to be more important for the nations around the globe to comply with the SDG objectives by 2030. Therefore, the nations are in pursuit of redesigning their energy and environmental policies, so that they can create the basis for addressing the SDG objectives by having a control over the environmental degradation created by them, by means of the ecological footprint.

Now, when we discuss about having a control over the ecological footprint being created by the nations, we are fundamentally referring to the economic growth pattern being attained by those nations. In such a situation, it should be remembered that giving preference to fossil fuel based solutions over the alternate energy solutions might be a likely character of the emerging nations, as achievement of economic in the primary preference of these nations, rather than retaining the environmental quality. Turkey is a nation, which demonstrates such characteristic traits. According to Ozay et al. (2019), the present economic growth pattern in Turkey is creating a problem in the way of implementing the objectives of SDG 13 (by high ambient GHG discharges), SDG 14 (poor fortification of Black Sea ecosystem), and SDG 15 (poor fortification of land quality). These SDGs collectively represent the ecological footprint of a nation, and in case of Turkey, addressing the objectives of these SDGs has turned out to be an issue, owing to their growth pattern. In order to address this issue, the policymakers are striving to reduce the dependence on fossil fuel-based energy solutions, by means of discovering and designing alternate renewable energy solutions. Even though Turkey has made substantial progress in the amount of renewable energy production after 2009, the usage of renewable energy is still far less than the non-renewable energy. In 2018, approximately 32 % of Turkey’s total electricity energy is produced from renewable sources. The hydropower takes the major share of Turkey’s renewable energy portfolio. Because of its geographical location, Turkey has a comparative advantage in terms of renewable energy generation (i.e., solar, wind). Therefore, it has the potential which may turn the environmental threats to opportunities. However, inefficiency of the educational infrastructure in Turkey might turn out to be a predicament in the way of renewable energy implementation. A reflection of this condition can be visualized in terms of the inability of Turkish policymakers in attaining the objectives of SDG 9 (inadequate R&D and patents) and SDG 4 (poor academic outcome in science) (Ozay et al., 2019). Therefore, while on one hand, the fossil fuel-driven economic growth is deteriorating the environmental quality by augmenting the ecological footprint, on the other hand, full potential of renewable energy generation is yet to be realized. There lies the focus of the study.

The present study takes a cue from the famous “Limits to Growth” approach, according to which the natural resource-driven economic growth pattern in the nations is constrained and unsustainable (Meadows, 1974). Continuous dependence on fossil fuel energy solutions might provide Turkey a short run economic benefit, but it might cause ecological unsustainability. Turkey was one of the 197 signatories of the 2015 Paris climate agreement, and they are also one of the 10 nations, which did not ratify with the accord (Apparicio and Sauer, 2018). In 2019 COP21 Barcelona Convention, several issues have been pointed out regarding the problems of climatic shift in Turkey (International Institute for Sustainable Development (IISD), 2019). Legislative obstacles have been identified as one of the reasons behind these issues, alongside the failure to diffuse the innovations across the nation. In order to assess these issues at a deeper level, the COP22 International Convention on the Protection of the Mediterranean Marine Environment and Coastline in 2021 will be organized in Turkey, and the major focus of this summit will be to look into the governance-climatic shift nexus, with special attention on Turkey. These recent developments on the sustainable policy design front calls for an analysis on the impact of economic growth and its drivers on ecological footprint.

For a country characterized by the problems of implementing sustainable development, it is necessary to assess the role of various forms of energy consumption on environmental quality. Although it can be understood that renewable energy consumption can help in improving the environmental quality, it might not be possible for the nation to implement it, as it might harm the economic growth pattern. Moreover, the social setting of the nation might not be ready to complement the nation-wide diffusion of the alternate energy technologies. Therefore, impact of the renewable energy solutions on the environmental quality might not be as per the expected standard, as the socio-economic caveats might be the hindrances on the way of implementing these solutions. In such a scenario, the nation has to rely on the existing fossil fuel-based energy resources, and experience the gradual deterioration in the environmental quality. In case of Turkey, the roles of renewable and non-renewable energy solutions in determining the level of ecological footprint need to be analyzed, as the socio-economic obstructions on the way of implementing the renewable energy solutions are not allowing these solutions to reach their full potential in tackling the environmental degradation issues, which are possibly being aggravated by the use of non-renewable energy solutions. The reason for choosing ecological footprint as an indicator of environmental degradation is motivated by the fact that it denotes the carrying capacity of earth, and therefore, it is a more inclusive indicator of environmental degradation, compared to any single pollutant. This association needs to be analyzed from the perspective of the SDGs, as Turkey is presently facing issues in attaining the SDG objectives, and the results to be obtained from this study might bridge the policy-level gaps existing in Turkey. There lies the policy-level contribution of the study.

While saying this, it also needs to be remembered that various levels of income growth, and renewable and non-renewable energy solutions might not have similar impacts on all the levels of ecological footprint. At the same time, this association needs to be analyzed for both short-run and long-run scenarios, as the results to be obtained by means of the analysis will be utilized for policy making. In this pursuit, Quantile Autoregressive Distributed Lag (QARDL) approach of Cho et al. (2015) has been employed. There are various advantages of QARDL technique vis-a-vis alternative methods. First, the QARDL approach allows analyzing the long-term relationship simultaneously with short-run dynamics throughout a span of quantiles of the conditional distribution of the explained variable (Mensi et al., 2019). Second, it allows for locational asymmetry between the variables in accordance with the location of the explained variable within its conditional distribution (Lahiani, 2018). Finally, the QARDL approach lets the cointegrating coefficients to change over the innovation quantile originated from shocks (Shahbaz et al., 2018). Now, from the policymaking perspective, this methodological application complements the policy-level contribution. It is likely that different levels of income growth, renewable and non-renewable energy solutions might have different levels of impact on ecological footprint, as the technology diffusion is a characteristic problem in Turkey, owing to low penetration in R&D and additional scientific developments. Therefore, the application of QARDL process complements the contextual development, and thereby contributing to the literature of environmental economics from the contextually-driven methodological perspective.

The contextual scenario in Turkey follows in Section 2. In Section 3, the empirical literature is viewed. In Section 4, the data set and the econometric methodology are presented. Empirical results are discussed in Section 5. In Section 6 a brief summary of the study and suggestions are discussed.

Section snippets

Ecological footprint in Turkey

Turkey’s ecological footprint of consumption per person was 3.36 gha while biocapacity per person was 1.44 gha in 2016. The ecological footprint is measured more than twice of biocapacity that year in Turkey. This means that people need more than 2 years to wait for the reproduction of natural resources they consume in 1 year and to keep the CO2 released into the atmosphere. This value also indicates that there are an unsustainable lifestyle and requirement of biocapacity import in Turkey (

Literature review

It is possible to find several articles on the relation among energy consumption, environmental degradation and economic growth. These studies can be categorized by three main groups. The first group studies are the ones that focus on the connection between energy (electricity) consumption and economic growth. There are also plenty of papers related to energy utilization and economic growth nexus in the literature. Especially after (Kraft and Kraft, 1978), several studies have emerged in the

Methodology

It is observed in empirical studies that unit root is generally encountered in time series analyzes using macroeconomic variables. In these analyses, the levels at which the variables are stationary are often used because the relationship between the non-stationary series is likely to be spurious. However, this situation causes loss of information in the long-term. Facing such problems led to the development of cointegration tests. According to the two-stage cointegration test, developed by

Data and descriptive statistics

In this current study, we empirically examine the role of renewable and non-renewable energy consumption on ecological footprint in EKC framework from 1965Q1 to 2017Q4 for Turkey. To this end, we use Gross Domestic Product (GDP), Renewable electricity consumption (RENC), Non-renewable electricity consumption (NENC) and Ecological footprint (EFP). Electricity consumption from renewable sources is used as a proxy of renewable electricity consumption while non-renewable electricity consumption is

Conclusion and policy implications

The current study re-investigates the impact of renewable and non-renewable energy consumption in testing EKC in Turkey by taking quarterly data from 1965 to 2017. This study applies Quantile Autoregressive Lagged (QARDL) approach introduced by Cho et al. (2015). This analysis is used because it checks that how a variety of quantiles of renewable energy, non-renewable energy and economic growth affect ecological footprint, thus giving a more detailed explanation of the general dependence of

Declaration of Competing Interest

The authors declare that they have no known competing financial interests or personal relationships that could have appeared to influence the work reported in this paper.

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