Environmental sustainability statement of economic regimes with energy intensity and urbanization in Turkey: a threshold regression approach.

Abstract

In recent time, the investigation of the state of environmental quality has largely been conducted with less attention on the situation of environment sustainability especially in different economic regimes (expansion and recession). In the current context, the role of income per capita, energy intensity, and urbanization in driving the ecological footprint of Turkey is examined in the framework of Environmental Kuznets Curve (EKC) hypothesis over the period of 1990-2015. Considering the potential evidence of regime switching, we employed the Threshold Autoregressive Model (TAR) method with a regime change threshold of 14.43505 per hectare per capita and found that the EKC hypothesis is valid for all the 4 models. Moreover, eight observations are below the threshold value in the first regime while fifteen observations are equal or higher than the threshold value in the second regime. With a threshold per capita income of 9340.1326 USD, the study found that Turkey begin to experience a decline in environmental degradation resulting from income growth in 2015. However, this desirable outcome was short-lived in 2018 because the per capita income slightly decreases to 9340.1326 USD. In addition, increases in energy intensity and urbanization level hamper environmental sustainability drive of the country. The frequency domain causality test further supports the nexus evidence among the implied variables. By virtue of observation, this study offers that the government should work toward achieving a sustainable growth in order to attain the country's environmental sustainability agenda.