The environmental and economic impacts of defence expenditures: An empirical investigation for ürki̇ye

Military spending is essential for a country's security, but this spending has economic and environmental implications. The relationship between military spending and economic growth has been extensively analyzed by economists in the past, and the environmental impact of this spending has generally been assessed in terms of carbon emissions. However, carbon emissions only show the demand side of environmental problems and neglect the supply side. To prevent this neglect, this study analyzes the effects of military expenditures on the load capacity factor for Türkiye in the period 1985-2022. The load capacity factor reflects both the damage caused by humanity to the environment as a global hectare area and the ability of nature to compensate for this damage. Therefore, assessing the effects of military spending on the load capacity factor allows for a more comprehensive environmental analysis. The study uses the Johansen-Juselius cointegration test, the fully modified least squares approach and the canonical cointegration regression (CCR) estimator for the empirical analysis. The results of the empirical analysis show that oil consumption supports economic growth, while military expenditure plays a negative role for economic growth. In addition, military spending and economic growth have a negative impact on environmental quality by reducing the load capacity factor. Geopolitical risk has no significant impact on economic growth and load capacity factor. These findings show that military spending has a negative effect on both the environment and economic growth. Türkiye should consider these findings and promote environmentally friendly practices in military sector.