Investigating the Role of Oil Prices in the Conventional EKC Model: Evidence from Turkey

Abstract

The present article tests the effect of oil price movements in the conventional Environmental Kuznet’s Curve of the Turkish economy. Contemporary time series analysis has been adapted with this respect. Results of the study reveal that oil prices and carbon emissions are in long-term equilibrium relationship in Turkey; carbon dioxide emissions converge to long-term paths as contributed by oil price changes very rapidly as much as 103.5 percent. The effects of oil prices on carbon dioxide emissions are negative and they are significant in proving that increases in oil prices lead to declines in the levels of carbon emissions. Finally, the major finding of this study confirmed the oil-induced EKC hypothesis in the case of Turkey.