Electricity Generation - Economic Growth - Environmental Pollution: VECM Analysis for Turkey

The aim of the article is to examine the relations of fossil and renewable electricity generation in Turkey with economic growth and environmental pollution in the period 1990-2017. Johansen-Juselius (1990) cointegration test and VECM causality analysis were followed to determine the relationships between variables. The results indicate that (i) there is a cointegration relationship between the variables, (ii) the conservation hypothesis seems valid in terms of fossil and renewable electricity generation in the long term, (iii) rise in carbon dioxide emissions increases renewable electricity generation more than fossil-derived electricity generation, (iv) according to the substitutive relationship of resources used in electricity generation, rise in fossil-based electricity generation reduces renewable electricity generation much more. As a result, it is seen that economic growth, environmental responses and the degree of substitution of resources are effective on electricity generation. In terms of ensuring environmental quality, it is necessary to pay attention to the interaction of factors with each other.