Does Fiscal Decentralization Promote Renewable Energy Use? Evidence from Türkiye

The nexus between fiscal decentralization (FD) and the renewable energy transition remains theoretically and empirically inconclusive, particularly in developing economies characterized by fiscal constraints. This study examines the relationships between the revenue and expenditure dimensions of FD and the renewable energy share in Türkiye over the period 1975–2024 within an extended STIRPAT framework, controlling for GDP per capita, trade openness, and urban population. Fourier-based econometric techniques are employed to allow for potential smooth structural changes. Long-run relationships are examined using the Fourier Autoregressive Distributed Lag (FADL) cointegration test, while long-run coefficients are estimated using Fully Modified Ordinary Least Squares (FMOLS). Dynamic Ordinary Least Squares (DOLS) and Canonical Cointegrating Regression (CCR) are additionally employed to assess the robustness of the long-run findings, and predictive causality is examined using the Fourier Toda–Yamamoto causality test. The results confirm a long-run cointegrating relationship among the variables. The baseline FMOLS estimates indicate that both revenue and expenditure decentralization are negatively and statistically significantly associated with the renewable energy share, with revenue decentralization exhibiting a larger coefficient in absolute magnitude. The negative signs are preserved across FMOLS, DOLS, and CCR, although statistical significance is not maintained under DOLS, indicating some estimator sensitivity. The causality analysis further provides evidence of unidirectional predictive causality from expenditure decentralization to the renewable energy share, while no statistically significant predictive causality is detected between revenue decentralization and the renewable energy share. Overall, the findings suggest that greater FD does not necessarily correspond to a higher renewable energy share and that its relationship with the renewable energy transition may depend on the broader fiscal and institutional context. The results offer policy-relevant evidence for Türkiye and may also provide useful insights for developing economies with similar fiscal and institutional characteristics.