Export product diversification and the environmental Kuznets curve: evidence from Turkey

Abstract

Countries try to stabilize the demand for energy on one hand and sustain economic growth on the other, but the worsening global warming and climate change problems have put pressure on them. This paper estimates the environmental Kuznets curve over the period 1971-2010 in Turkey both in the short and the long run. For this purpose, the unit root test with structural breaks and the cointegration analysis with multiple endogenous structural breaks are used. The effects of energy consumption and export product diversification on CO2 emissions are also controlled in the dynamic empirical models. It is observed that the environmental Kuznets curve hypothesis is valid in Turkey in both the short run and the long run. The positive effect on energy consumption on CO2 emissions is also obtained in the long run. In addition, it is found that a greater product diversification of exports yields higher CO2 emissions in the long run. Inferences and policy implications are also discussed.