Istanbul Journal of Economics
The Relationship Energy Sources Use-CO2 Emissions and Economic Growth: An Investigation on Developing EconomiesMustafa Yapar
Energy and all concepts related to energy are factors that affect the economic growth level of countries. When energy is examined in terms of developing economies, it is understood how vital energy is. Increasing energy demand is affected by various dynamics that affect the strategies and policies of countries. Since energy is an input for production, it is a determinant of the economic growth process. It is important to consider the resources used while assessing the energy required in production. There are two types of energy sources: renewable and non-renewable. Regarding the future of the world and the use of fossil fuels, there are concerns about climate change and global warming. It is seen that international cooperation on this issue is inevitable. In this paper, the relationship between energy use, CO2 emissions, and economic growth are analyzed for selected developing economies. The study examines the connections between the consumption of renewable and non-renewable energy, CO2 emissions per capita, and capita income between 1995 and 2014. Selecting the data for this period is due to the desire to include more developing economies in the model. Finally, it has been determined that all three independent variables have a positive effect on economic growth. In order to combat climate change, it is important for developing economies to encourage renewable energy for a sustainable life.
Enerji Kaynakları Kullanımı-CO2 Emisyonu ve İktisadi Büyüme İlişkisi: Gelişmekte Olan Ekonomiler Üzerine Bir İncelemeMustafa Yapar
Enerji ve enerjiye bağlı olarak ortaya çıkan bütün kavramlar ülkelerin ekonomik büyüme düzeylerini etkileyen unsurlardandır. Konu gelişen ekonomiler açısından incelendiğinde enerjinin ne kadar hayati bir öneme sahip olduğu anlaşılmaktadır. Giderek artan enerji talebi çeşitli dinamiklerden etkilenmekte ve ülkelerin strateji ve politikalarını etkilemektedir. Enerji üretimde girdi olarak kullanılmakta olduğu için ekonomik büyümenin önemli bir belirleyicisi durumundadır. Üretimde kullanılan enerjinin kaynaklar açısından da değerlendirilmesi gerekmektedir. Enerji kaynakları açısından yenilenemeyen ve yenilenebilir olarak sınıflandırılmaktadır. Fosil yakıtların durumu dikkate alındığında dünyanın geleceği açısından iklim değişikliği ve küresel ısınma sorunları bulunmaktadır. Bu konuda uluslararası bir işbirliğinin kaçınılmaz olduğu görülmektedir. Bu çalışmada enerji kaynakları kullanımı, CO2 emisyonu ve iktisadi büyüme ilişkisi seçilen gelişen ekonomiler bakımından analiz edilmektedir. Araştırma 1995 ve 2014 yılları arası için yenilenebilir enerji kullanım miktarı, yenilenemeyen enerji kullanım miktarı, kişi başına CO2 emisyonu ve kişi başına düşen gelir arasındaki ilişkiyi analiz etmektedir. Verilerin bu dönem için seçilmesi modele daha fazla gelişen ekonomi dahil etme isteğindendir. Analiz sonucunda üç bağımsız değişkenin de ekonomik büyüme üzerinde pozitif yönlü etkisi bulunduğu saptanmıştır. İklim değişikliği ile mücadele için gelişen ekonomilerin yenilenebilir enerjiyi teşvik etmesi sürdürülebilir yaşam açısından önemlidir.
Energy is gradually increasing its importance as an indispensable ingredient of life. In addition to its effects on daily life, it is also the subject of many academic studies. Energy is a concept that is associated with many sciences and disciplines and is constantly analyzed through certain variables. It is a working area that may maintain its modernization because of its close connection to technological innovation. In a globalizing world, it is a dynamic that sometimes brings countries closer to each other and sometimes causes conflicts.
The relationship between energy and economics develops through the energy economy, energy market, energy resources, energy policies, and its environmental effects. Energy sources, the focus of this study, fall into two categories: non-renewable and renewable. Non-renewable energy sources are also known as fossil fuels. They were formed by the transformation of the remains of organisms that lived in previous periods over many years. They are also known as traditional energy sources. As a result of long-termed habits, these nonrenewable energy resources have a significant ratio in global energy. Fossil fuels have a high share of 81% in today’s energy market.
Due to their way of formation, fossil fuels have some drawbacks. The first of these is the potential risk of not being enough to meet the increasing energy demand since they are exhaustible energy sources. The second negative aspect is that they threaten life due to the polluting gases they emit in the process of being used. It is known that the use of energy resources such as oil and coal and the gases that cause greenhouse gas emissions such as methane and carbon dioxide cause global warming and climate change problems. They grant political superiority to the nations with resources, which is another drawback. The importing nations’ energy security and independence are in danger. When several unfavorable circumstances are taken into account, it is evident that resource diversification is a difficulty for the countries involved. In this direction, renewable energy sources come to the forefront as clean and environmentally friendly. They contribute to economic growth and sustainable development goals. They also help to solve the problem of foreignsource dependency on energy.
The aim of this study is to show that Turkey and other developing countries can easily increase their renewable energy investments without leaving aside their economic growth targets. Since the energy markets of developed economies are more established, developing countries need to start this energy transformation. With this process, both economic policy goals and sustainable development goals will be achieved together.
Between 1995 and 2014 was chosen as the scope of the study. The group of developing countries, including Turkey, has been determined from the report titled “World Economic Situation and Prospects”. These countries are economies that pursue their economic policies intending to become a developed country. Considering this report, 67 developing countries were included in the study. When the data were examined, some countries were excluded because they experienced data loss in some years. In addition, due to the desire to add more countries to the model, data could be added to the analysis until 2014. All data used in the study were collected from the “World Bank Data Indicator” section.
The Generalized Method of Moments (GMM), which is a dynamic panel data analysis method, is used as the model of the study. In the study, the use of renewable energy resources, use of fossil fuels, economic growth, and CO2 emission variables are discussed in the form of annual data covering the years 1995 and 2014. The dependent variable among these factors is the economic growth indicator. The research focuses on how independent variables affect the dependent variable. In the dynamic model, the one-year lagged value of the dependent variable is added to the regression as an independent variable.
As a result of the study, the signs of the independent variables that affect the dependent variable are positive as expected. Increasing the use of renewable energy in developing nations has a positive impact on the pace of economic growth in those nations. Additionally, it does not seem to be a realistic goal to meet all of the world’s energy needs through the use of renewable energy sources. The main goal for developing countries, including Turkey, is to create a more sustainable energy resource management. In this direction, Turkey should both build a sustainable future by increasing the share of renewable energy and experience positive changes in terms of economic indicators. Economic policies should be prepared in line with energy policies.