HOW COSTLY IS ENERGY CONSERVATION? THE ENERGY-GDP RELATIONSHIP RE-EXAMINED FOR TURKEY

Mehmet Canakci

doi:10.32479/ijeep.11428

Abstract

Economic structure, technology, consumption habits, cultural and similar values vary greatly between countries. Energy consumption included in this structure is theoretically thought to be related to growth output. Could slowing the growth be the cost of reducing energy consumption? In this study, using annual data between 1970 and 2019, it was investigated whether per capita energy consumption affects per capita income asymmetrically or not by using the NARDL model. The feature that makes this study different from similar studies is that it interprets the short and long-term asymmetric effects with the analysis model used and makes a unique contribution to the literature. The findings gave us the conclusion that income is affected in the same way by shocks experienced in energy consumption, and it has been observed that the effect of positive shocks is greater in the long run. However, we conclude that negative shocks are more effective than positive shocks in the short term. Thus, we see that the increase in energy consumption in the long term increases the per capita income, and the decrease in energy consumption has a high as well as negative impact on income per capita in the short term. Based on the fact that the conservation approach is managed in a balanced way, one of the reasons for the slowdown in the national income rates of the countries may be due to the decrease in energy consumption in the long term. Accepting that the conservation approach is managed in a balanced way, one of the reasons for the slowdown in the national income rates of the countries may be due to the decrease in energy consumption in the long term.Keywords: energy consumption, per capita income, economic growth, NARDL asymmetricJEL Classifications: Q43, P44, O47, C12DOI: https://doi.org/10.32479/ijeep.11428

Highlights

All activities of people and especially those that contribute to economic and social development live in a life based on energy consumption
The appropriate model was chosen if the integration instructions of the selected variables were known
The COVID-19 pandemic is shaking all countries of the world, regardless of the developed or developing economy

Summary

Introduction

All activities of people and especially those that contribute to economic and social development live in a life based on energy consumption. A significant part of the world’s energy consumption is used through daily individual electronic consumption materials. All transportation services (air, sea, road, rail) increase the dependency on energy with the goods and services sector along with the use of oil. The industry and transportation sector, which constitute the indicators of economic growth parameters, continues its activities with a significant amount of energy use. Due to the intensive use of technology, especially in developed countries, we can think that growth may change depending on commercial energy consumption. It is inevitable to increase and develop the diversity of sources in energy consumption with a sustainable growth. In response to the question of what should be done in this regard, policies should be created with an understanding of consumption for efficient growth and efficiency

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