Estimation of the Environmental Kuznets Curve Hypothesis with ARDL model in Turkey and Fourier Toda Yamamoto causality analysis

This study examines the validity of the Environmental Kuznets Curve (EKC) for the period 1971-2014 in Turkey with the variables of energy use, urban population, GDP per capita, CO2 emissions. In the study, autoregressive distributed lag model (ARDL) was used as a method. Another method that examines the validity of the EKC hypothesis and determines the turning point, Utest, has also been used. In addition, Toda Yamamoto and Fourier Toda Yamamoto causality test was applied to examine the causality relationship between variables, and the results of the two causality tests were compared. In the study, unit root tests of the stationary of variables; ADF, Fourier ADF, KPSS, Fourier KPSS, Phillips and Perron (PP) and structural single break unit root test; tested with Perron (1989) and Zivot-Andrew (1992). As a common result of unit root and structural break unit root tests, GDP, GDP square, CO2 emissions are stationary at the first level I(1), urban population variable, and energy use are stationary at the level I(0). In the study, has been found cointegration between the variables according to the ARDL bound test. Environmental Kuznets Curve hypothesis is valid in Turkey according to the results obtained from long-term ARDL coefficients; An inverse U-shaped relationship was found between GDP and CO2 emission variables. This relationship has also been proven with Utest and the turning point has been determined as $12,050. In addition, GDP, energy use, urban population variables have been found to have a positive effect on CO2 emissions. There is no significant causality relationship between variables according to the results of the TY causality test, Fourier TY causality test found a one-way causality relationship from CO2 emissions to GDP and energy use variables. Keywords: ARDL, Enviromental Kuznets Curve, Fourier ADF, Fourier KPSS, Fourier Toda Yamamoto