Does Globalization Affect Energy Consumption in Turkey? Its Implication on Environmental Quality

This study employs time series econometrics techniques to examine the direction of causality relationship between globalization, carbon emissions, energy consumption and economic growth in the case of Turkey. The objective of this research is to examine whether causality relationship exist between globalization and energy consumption for Turkey. In order to control for omission variable bias, we employ real GDP per capita and carbon dioxide emissions as some additional variables to proxy for economic growth and environmental quality over the periods of 1980-2014. In order to achieve research objective, we conduct Granger causality test. Empirical results show bidirectional causality between CO2 emissions and globalization and between energy consumption and globalization. In addition, results also show the presence of a unidirectional causality relationship running from energy consumption to CO2 emissions and from globalization to economic growth. Lastly, we find neutrality hypothesis between CO2 emissions and economic growth and between energy consumption and economic growth. Based on the results, we are of the opinion that the bidirectional causality relationship established between globalization and energy consumption would have grievous impact on the environmental quality, as increase in energy demand through the channel of globalition via international trade would increase carbon emissions level in Turkey. In addition, results also show that environmental pollution in the sampled country are not output driven. Thus, energy conservation policies would not hurt or retard economic performance and hence, economic growth of Turkey. Globalization and energy consumption appears to influence environmental pollution in the case of Turkey. Keywords: Energy consumption, Globalization, Carbon dioxide emissions, Economic growth, Turkey.