EMPIRICAL FINDINGS ON THE RELATIONSHIP BETWEEN RENEWABLE ENERGY PRODUCTION, EXPORT DIVERSIFICATION AND CO2 EMISSIONS IN TRANSFORMATION ECONOMIES

In order to contribute to the ongoing discussions on the environment-economy relationship, the relationship between renewable energy consumption, export diversification, economic growth and CO2 emission in the countries considered as transformation economies was investigated in the period between 1997 and 2014 in the current study. In the study, IPS, LLC unit root tests, Pedroni and Kao cointegration tests, and FMOLS and DOLS coefficient estimation methods, which are frequently used in the literature, were used. As a result of the analyses, it was concluded that renewable energy consumption, economic growth and export diversification have negative effects on CO2 emissions, while trade openness has a positive effect. In the Dumitrescu-Hurlin causality test results, a bidirectional causality relationship was found between renewable energy production and trade openness and CO2 emissions. Within the scope of these results, it is considered important to implement incentive policies for export diversification and renewable energy production in countries of transformation economy. Given the positive effect of trade openness on CO2 emissions, it is considered necessary to reduce the share of sectors polluting the environment in trade and to increase the share of sectors that do not have a negative impact on the environment.