Environmental deterioration, renewable energy, natural resource rents, and schooling in Türkiye: Does the degree of energy transition matter for environmental quality?

Abstract

Within the literature on energy and environmental economics, it is generally acknowledged that renewable energy can improve environmental quality; however, certain papers suggest that an optimal level of the usage of renewable energy sources may exist. Consequently, the utilization of renewable energy sources can result in environmental degradation up to a certain threshold. Then, environmental quality can be enhanced through the continued application of renewables. This indicates that the link between renewable energy and environmental devastation is inverted U-shaped.This paper presents empirical evidence concerning this possible association between renewable energy and environmental destruction in Türkiye, a country where fossil energy predominates in the energy mix. Additionally, the paper investigates the environmental influences of natural resource rents and schooling. This study utilizes annual data from 1971 to 2020 and implements time series methodologies that rely on the Fourier approximation. The paper thus accounts for an undetermined quantity of structural breaks. The results suggest that an inverted U-shaped link occurs between renewable energy and environmental destruction, signifying renewable energy initially contributes to a diminution in environmental quality before subsequently improving it. Additionally, environmental quality is positively associated with natural resource rents and negatively associated with schooling, according to the findings. Furthermore, the findings reveal that schooling worsens the combined effect of renewable energy on environmental degradation. These conclusions are discussed in the paper.