The impact of the carbon border adjustment mechanism (CBAM) on steel producers' demand for and attitudes toward renewable energy in Türkiye

Undesirable effects of climate crisis become more visible every day, making it necessary to design policies to tackle them. One of the most critical steps to take in the right direction is promotion of switches to renewable energy sources so as to reduce carbon dioxide (CO2) emissions released into the atmosphere by manufacturing plants. The European Union's Carbon Border Adjustment Mechanism (CBAM) aims to reduce these carbon emissions by placing a surcharge on imported goods based on their carbon footprint. This thesis investigates possible effects of CBAM on steel producers' demand for, and attitudes toward renewable energy in Turkiye. For this purpose, a survey-based discrete choice experiment (DCE) is conducted to determine Turkish steel producers' marginal willingness to pay (MWTP) for renewable energy under alternative scenarios. Findings from the experiment indicate that the longer the duration of government guarantees to keep renewable energy prices constant, the more attractive the transition to renewable energy is. The survey responses also show that steel producers value renewable energy intrinsically more than its actual price. In addition, steel producers responding to the survey prefer that fixed and specific usage fees be employed during the transition to renewable energy. Based on these findings the thesis discusses the role that the Turkish government could potentially play in facilitating this transition, reducing steel producers' carbon footprint, and promoting renewable energy supply.