Does trade openness improve environmental quality? New evidence from the CO₂–renewable energy nexus

This study analyses the relationships between trade openness, renewable energy consumption, and economic growth on CO₂ emissions in Türkiye over the period 1990-2021, employing Granger Causality tests and the Autoregressive Distributed Lag (ARDL) approach to capture both short- and long-run dynamics. The ARDL results reveal a stable long-run cointegration among the variables. Economic growth is found to increase CO₂ emissions, with a 1% rise in income per capita raising emissions by approximately 0.70%, reflecting the carbon-intensive nature of economic expansion. In contrast, renewable energy consumption significantly reduces emissions, with a 1% increase leading to a decline of about 0.16%. Trade openness also exerts a negative long-run effect on emissions, while remaining insignificant in the short run. Granger causality results suggest short-run causal effects from GDP and CO₂ emissions to trade openness, highlighting trade as the most responsive channel in the short term. The results highlight the importance of distinguishing between short-run and long-run effects when assessing the environmental impacts of economic activities.