CO₂ Emission, Energy Consumption, and Economic Growth for Turkey: Evidence from a Cointegration Test With a Structural Break

Abstract

In this study, the existence of a long-run relationship among per capita CO₂ emission, per capita income, and per capita energy consumption is examined over the period from 1960 to 2007 in order to test the validity of the environmental Kuznets curve. To this end, beside the Johansen cointegration test, the Gregory and Hansen cointegration test which allows for a structural break was used. The results of the Johansen cointegration test shows there is a long-run relationship among per capita CO₂ emission, per capita income, and per capita energy consumption. According to the Gregory-Hansen test, the existence of a structural break in 1979 together with the long-run relationship cannot be denied. Thus, long-run and short-run analyses were performed for two different regimes: 1960 to 1978 and 1979 to 2007. The results have revealed that in the long-run, the Environmental Kuznets Curve Hypothesis is valid for both periods.

Keywords:

• CO₂ emission
• environmental Kuznets curve hypothesis
• structural break

Notes

Note: *** denotes statistical significance at 1%. For the Zivot-Andrews (1992) unit root test the critical values at 1%, 5%, and 10% significance levels are −5.57, −5.08, and −4.82 respectively. k shows the optimal lag length.

¹We applied the cumulative sum (CUSUM) and cumulative sum of squares (CUSUM-SQ) tests proposed by Brown et al. (1975) to the residuals of the model estimated for sub-periods in order to determine the stability of the elasticities of long-run equilibrium models. This result points to the stability of the estimated parameters for the 1960 to 1978 and 1979 to 2007 subperiods. We do not report the results of CUSUM and CUSUM-SQ here to conserve space but they are available from the author upon request.