Income, Energy Consumption, Trade Openness and Environmental Protection Expenditures in Turkey: A Regional Analysis of the EKC Hypothesis

Abstract

Environmental pollution is an important threat for sustainable economic development at the national and the regional level. Nevertheless, regional studies investigating the determinants of the environmental pollution in Turkey are limited. This study analyzes the effects of income, energy consumption, trade openness and environmental protection expenditures on the environmental pollution in NUTS 2 regions of Turkey for the period 2007-2019 within the framework of the Environmental Kuznets Curve (EKC) hypothesis. The findings obtained from the study using the Two Step System Generalized Moments Method show that the EKC hypothesis is not valid in Turkey for NUTS 2 regions. Morever, energy consumption has a statistically significant and positive effect on the environmental pollution, while trade openness has a negative effect. However, environmental protection expenditures do not have statistically significant effects on the environmental pollution. These results reveal that the effectiveness of the economic and fiscal policies implemented at the regional level to increase the environmental quality should be increased.

Keywords

• environmental kuznets curve
• government expenditures
• economic growth
• regional development
• dynamic panel data analysis