The renewable energy consumption – growth nexus in Turkey

Energy is one of the major factor for the economic growth. Countries have to produce more in order to achieve sustainable growth target. Thus, they have to consume more energy. Developed economies are trying to minimize the eco-logical damage as they are achieving their target economic growth rate. Effi-cient usage of renewable energy sources is the corner stone of this effort. Tur-key has planned to have high, sustainable economic growth rate. . 21st century is the time that CO2 emission has peaked. Hence, scientists has become more and more curious about high, sustainable and eco-friendly economic growth since the early days of 21st century There are four hypothesizes regarding this matter. First hypothesis states that there are no causal relationship between economic growth and renewable energy consumption. Second hypothesis indi-cates that there is a unidirectional causality between economic growth and re-newable energy consumption and causality runs from renewable energy con-sumption and economic growth. Third hypothesis stands for this; there is a unidirectional causality between economic growth and renewable energy con-sumption and it runs from economic growth and renewable energy consump-tion. Last hypothesis is called feedback hypothesis. It means that there is a bi-directional causal relationship between two variables. The current study investigates the causal relationship between economic growth and renewable energy consumption in Turkey between 1980 and 2013. Granger causality test is used to examine the causal relationships between eco-nomic growth and renewable energy consumption. Empirical evidence shows that, based on the Granger Causality Test, there is bi-directional Granger cau-sality exists between economic growth and renewable energy consumption, results indicate that the renewable energy consumption cause real GDP, which can explain the role of renewable energy in stimulating economic growth in Turkey. Keywords: Renewable energy, Economic growth, Granger Causality, Green economy, Environment