Two essays on the relationship between renewable energy and foreign trade

Renewable energy plays a critical role in achieving sustainable development goals, offering both environmental and economic benefits. For developing economies like Türkiye, renewable energy consumption has become increasingly significant due to its implications for trade balance, economic growth, and energy security. The intricate relationship between renewable energy and trade extends beyond direct interactions, encompassing indirect and multifaceted linkages that warrant detailed investigation. This study examines Türkiye's renewable energy and trade dynamics from two distinct perspectives. First, the symmetric and asymmetric effects of trade on renewable energy consumption are analyzed using linear and nonlinear models. This analysis investigates how trade expansions and contractions affect renewable energy consumption differently, alongside the roles of variables such as per capita GDP, FDI, oil prices, and inflation. Second, the indirect effects of renewable energy consumption on trade are explored, focusing on how renewable energy shapes exports and imports through its positive impact on per capita income. Findings suggest that renewable energy projects, often domestically funded and state-supported, may deter foreign direct investment (FDI) while simultaneously promoting economic growth and trade balance. Both analyses offer valuable insights into the renewable energy-trade nexus in Türkiye. While renewable energy indirectly influences trade and economic growth, the asymmetric impacts of trade on renewable energy consumption underscore the need for aligned energy policies and trade strategies. The findings highlight the importance of fostering investments to enhance domestic renewable energy capacity, reducing dependency on imported technologies, and developing policies that harmonize with sustainable development goals. By adopting these strategies, Türkiye can strengthen its energy sustainability while improving its trade performance and economic growth.