Determinants of Greenhouse Gas Emissions in Turkish Manufacturing Industry

Abstract

Ever since the onset of the first Industrial Revolution in the United Kingdom, the world has experienced a rapid change in climate, and the surface and ocean temperatures have been increasing at unprecedented levels. The climate change, which has been predominantly caused by anthropogenic greenhouse gas emissions, has been receiving increasing attention from the major international institutions related to economic development from the beginning of the 1990s. There is a widespread consensus among the economics literature that the GHG emissions are the primary cause of the increase in global average temperatures. Considering the close relation between industrial activities and the GHG emissions, determining the causes of emissions is required in order to form policies to tackle climate change. Determining the causes of the GHG emissions for the Turkish manufacturing industry, therefore, can assist the Turkish government for forming effective policies in order to attain its sustainable development goals. This study makes two-panel data estimations for the periods of 2003-2016 and 2009-2016 in order to determine the causes of GHG emissions for the Turkish manufacturing industry. The results indicate that production value, capacity usage, capital intensity, and operating at medium-low technology levels increase the total emission levels, while environmental taxes, productivity, and R&D expenditures reduce GHG emissions. The results point out that taxing sectors with high emission levels and subsidizing R&D expenditures with the tax revenues can be an effective means to decrease greenhouse gas emissions generated by the manufacturing industry of Turkey.