The causal link between electricity generation and co2 emissions:toda and yamamoto approach

Abstract

Th e link between energy consumption and CO2 emissions has received a signifi - cant research attention in the last few decades in the case of Turkey. Th e authors in general agree on the positive link between these two macroeconomic terms. However, the link between electricity generation and CO2 emissions did not receive much attention what was the motivation to conduct this study. Th us, this paper aims to provide empirical evidence on the link between these two variables while controlling for the role of the population growth. Th e time-series data are collected at annual basis in the period between 1974 and 2016. Our results reveal a bidirectional causal link between electricity generation and population growth. Th ese fi ndings imply that population growth stimulates the electricity generation. In addition, electricity generation tends to stimulate the population growth. Th is is since some of the countries in the World have big problems with electricity supply. It infl uences negatively the manufacturing sector, educational sector as well as many other sectors. Moreover, a bidirectional link between population growth and CO2 emissions are recorded. More population is expected to demand more working place, and fi rms especially those in industry sector are known as signifi cant energy gluttons. Th e empirical evidence of this paper can serve as an important insight for decision makers. At fi rst, it suggests the necessity to think of the possibilities to develop renewable energy in Turkey. Th is is since Turkey has a great potential in the fi elds of renewable energy. In this light, Turkey may solve the problem of the great reliance on the imported energy. Moreover, the business climate should be more favorable for investors tending to support the projects in the fi elds of renewable energy. Apart from these, it is of great importance to make a necessary eff ort to increase the energy effi ciency which will reduce the current energy consumption and CO2 emission consequently. At last, it would be necessary to educate both, the private and public sector, on the benefi ts of renewable energy.