Renewable Energy Production, Energy Consumption and Sustainable Economic Growth in Turkey: A VECM Approach

Abstract

There exists a highly interrelated relationship between energy, the environment and growth where the efficient management of this nexus is not only a must for sustainable development and human wellbeing but is also a basis for formulating sound economic policies harnessed with energy and environmental policies. Thus, this paper aims at investigating the causal relationships among renewable energy production, total energy consumption and economic growth for Turkey both in the long and short runs. The analyses are conducted by using the Johansen–Juselius co-integration test, the vector error correction model, Granger causality, impulse-response functions and variance decomposition for the period 1980–2016. Our findings obtained for the causal relationship between renewable energy and economic growth points to a bidirectional relationship both in the short and in long runs that promote feedback hypothesis, and it also reports a causal relationship running from energy consumption to economic growth both in the short and long runs, supporting the growth hypothesis. However, no consistent result could be obtained for the short run relationship from economic growth to energy consumption. These results indicate that increased renewable energy production and decreased energy consumption are vital for Turkey’s sustainable development.

Renewable Energy in the Electricity Sector and GDP per Capita in the European Union

“…The uncertain context of Brexit creates more barriers. Germany made big progress in the consumption of fossil and nuclear fuels, while France and Italy have serious problems in meeting the targets for 2020 [64][65][66][67][68][69]. Netherlands also encountered difficulties because its final energy consumption is based on a natural gas network that is quite cheap; government subsidies for the RES promotion are not attractive, being lower than in Scandinavian countries.…”

Factors Influencing Energy Consumption in the Context of Sustainable Development

“…Whereas, in countries like Turkey, where there is an abundance of geothermal sources, the rapidly growing population and economic growth do not allow for a stagnation in the use of pollutant energy sources (such as coals) and the investment in harnessing the renewable energy source [47]. After Temiz Dinç and Akdogan [48] demonstrate a bidirectional causal relationship between renewable energy and economic growth based on 1980-2016 data, they claim that increasing renewable energy production and decreasing energy consumption are a must for ensuring Turkey's sustainable development. Some authors [49] come with solutions appropriate for reducing the final energy consumption, based on a multi criteria analysis on the case of Italy, which proves the efficiency of using solar thermal panels combined with the heat pumps instead of the current system used for providing hot water and heat.…”

Renewable Energy, Economic Growth and Economic Development Nexus: A Bibliometric Analysis

“…As in the case of the BRICS, European countries were studied separately: Portugal by [84]. Portugal, Spain, Denmark and the USA by [85], Ukraine by [86,87], Turkey by [88,89], Romania by [90], Czech Republic and Slovakia by [91], Wales by [92], Poland by [93,94], Estonia, Latvia and Lithuania by [95], Scotland by [96] and Russia [97]. The American continent, to be more precise, Latin America, was also the target of research by [98][99][100][101].…”