Towards the vision of going green: The role of different energy research and development investments, urbanization and income in load capacity factor

Abstract

Environmental sustainability, one of the agendas of the 21st century, is an essential step in the transition to a low-carbon economy in developing countries. The motivation of this study is to investigate the impact of fossil energy research and development investments on environmental quality within the framework of the load capacity curve hypothesis, and urbanization is also added to the model to avoid omitted variable bias. To this end, the Augmented ARDL analysis examines the relationship between economic growth and ecological well-being in Turkiye from 1986 to 2022. The results from the empirical analysis support the accuracy of the load capacity curve hypothesis. Furthermore, it is observed that renewable energy research and development investments, which are the main component of the study, improve environmental quality.On the other hand, it has been found that research and development investments in fossil fuels and urbanization reduce the load capacity factor. Based on the study’s findings, the Turkish government should allocate more research and development budget to transition to a low-carbon economy. Considering Turkiye’s intense fossil resource consumption, the government should plan research and development budget arrangements supported by law regarding energy efficiency.