The Role of Renewable Energy, Technological Innovation, and Human Capital on Environmental Quality in Türkiye: Testing the LCC Hypothesis with Smooth Structural Shifts

Newly industrializing economies are ardently striving for rapid development, aspiring to emulate the affluence of Western nations. However, amidst this relentless economic dynamism, the world grapples with an escalating climate change crisis. Therefore, it becomes imperative to identify the factors contributing to improving developing nations' environmental quality while concurrently advancing their sustainable development objectives. In this regard, the present study aims to dissect the environmental implications of renewable energy consumption, technological innovation, and human capital and examine the "Load Capacity Curve" (LCC) hypothesis in Türkiye through an extension of the STIRPAT model. To achieve this objective, the research operates a novel econometric methodology, namely the "augmented autoregressive distributed lag" (A-ARDL) approach with Fourier terms, to analyze yearly data from 1980 to 2019. The empirical findings substantiate the validation of the LCC hypothesis in Türkiye, both in the short and long term. Furthermore, the results unveil that renewable energy consumption and human capital significantly bolster ecological welfare over the long term, whereas technological innovation exhibits no discernible impact on the environment. Additionally, the outcomes display that population growth positively impacts the environment in the short term; nevertheless, over the long term, it becomes detrimental to environmental quality.