Climate policy uncertainty, renewable energy transition, and sustainable economic development: Evidence from Türkiye using the Fourier-Augmented ARDL and TVP-VAR models

The transition toward renewable energy is a pillar of sustainable development and energy security strategies. However, climate policy uncertainty (CPU) may generate ambiguous investment signals, either discouraging or stimulating renewable energy development depending on institutional quality and market conditions. Although research on uncertainty and energy transition has expanded, evidence from emerging economies remains limited, particularly regarding the evolution of CPU effects over time. This study examines the short- and long-run impacts of climate policy uncertainty on renewable energy demand in Türkiye using quarterly data from 1990Q1 to 2025Q1. A Fourier-Augmented Autoregressive Distributed Lag (FARDL) model identifies long-run equilibrium relationships while accounting for structural changes, whereas a Time-Varying Parameter Vector Autoregression (TVP-VAR) model captures changes in dynamic responses. The findings show that climate policy uncertainty has a positive and statistically significant long-run effect on renewable energy demand. By contrast, short-run results indicate temporary negative responses to uncertainty shocks, suggesting that policy uncertainty initially delays renewable energy investment. TVP-VAR impulse responses reveal that the effect of CPU varies over time. Earlier periods display weak or negative responses, while recent years show stronger and more persistent positive effects, indicating that Türkiye’s renewable energy sector has become resilient and adaptive. These results suggest that climate policy uncertainty does not necessarily hinder the renewable energy transition in the long run when supported by credible institutions and consistent policies. Policymakers should strengthen regulatory credibility, expand green finance, encourage technological innovation, and maintain stable renewable energy support mechanisms to reduce short-run risks and accelerate sustainable energy transition.