Investigating the Impact of Economic Globalization on Greenhouse Gas Emissions in Türkiye: Empirical Evidence from the NARDL Method

Investigating the macroeconomic determinants of greenhouse gas emissions as an indicator of environmental pollution is of great importance within the scope of sustainable development goals. The purpose of this study is to analyze the impact of economic globalization on greenhouse gas emissions using the nonlinear autoregressive distributed lag (NARDL) approach in Türkiye for the period 1970-2022. Economic growth, financial development, industrialization and population growth are included as additional explanatory variables in the estimation models focusing on the economic globalization – greenhouse gas emission relationship. The estimation findings of this study are as follows: i) It is determined that there is asymmetric cointegration proving the existence of a long-run relationship between the variables included in the estimation models. ii) The main finding of the study reveals that long-run positive shocks to economic globalization trigger greenhouse gas emissions for Türkiye. iii) The analysis findings indicate that positive economic growth shocks increase greenhouse gas emissions, while negative economic growth shocks decrease greenhouse gas emissions. iv) Long-run negative shocks to Türkiye’s financial development worsen environmental quality by raising greenhouse gas emissions. v) Positive industrial value-added shocks improve environmental quality by reducing greenhouse gas emissions. vi) A positive shock to population growth boosts greenhouse gas emissions and thus causes environmental degradation. vii) The dynamic multiplier analysis findings produce results consistent with the long-run coefficient estimates. All these findings enable the presentation of important recommendations to guide Türkiye’s policymakers in the economic integration process to achieve sustainable development goals.