Carbon Hysteresis in Turkey: Implications for Environmental Policies

This study aims to examine whether the carbon hysteresis hypothesis is valid in Turkey. As a significant global carbon emitter, Turkey has been developing policies to reduce carbon emissions and enhance environmental sustainability. In this context, the study analyzes the long-term behavior of carbon emissions and the presence of hysteresis using annual data from 1999 to 2023. The presence of carbon hysteresis was first examined using ADF and PP unit root tests to determine whether the series was stationary. The findings indicate that carbon emissions are not stationary at the level but become stationary after taking the first difference. This suggests that the carbon hysteresis hypothesis may be valid. However, since conventional unit root tests do not account for structural breaks, Lee and Strazicich (2013) single-break and Lee and Strazicich (2003) two-break unit root tests were applied to provide a more accurate analysis of the long-term dynamics of the series. The results reveal that the carbon emissions series exhibited structural breaks in 2005 and 2019. These breaks are associated with changes in Turkey's environmental regulations, global economic fluctuations, and shifts in environmental policies. According to the analysis, when structural breaks are considered, the carbon emissions series contains a unit root, confirming that the carbon hysteresis hypothesis is valid for Turkey. This finding indicates that shocks to carbon emissions have long-term persistent effects and that emissions do not naturally return to lower levels.