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The Impact of Climate Change on Financial Performance of the Electricity Industry: The Case of Türkiye

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  • Çağdaş GÜNDÜZ

Abstract

The world is encountering increasingly frequent and intense extreme weather events, driven by climate change. There is a strong scientific consensus that warns of an existential threat if greenhouse gas (GHG) emissions are not dramatically reduced and global temperatures kept under control soon. In this context, alternative energy technologies have become essential, as they can generate energy without adding to GHG emissions. Türkiye’s electricity energy industry, as a core component of the country’s economic stability and energy security, plays a major role in adapting to climate change. This study specifically focuses on listed electricity energy firms in Türkiye over the period from 2008 to 2022, investigating how climate change impacts their financial performance using panel data methodology. The empirical findings show that climate change has a significant and positive influence on financial outcomes, suggesting that adapting to climate pressures can benefit the industry financially. As a result, it is essential for the electricity power industry to incorporate climate-related strategies into their corporate agendas. However, technological innovations will mean little without large-scale public action, where local and national governments work together with international organizations and nations.

Suggested Citation

  • Çağdaş GÜNDÜZ, 2025. "The Impact of Climate Change on Financial Performance of the Electricity Industry: The Case of Türkiye," Journal of Research in Economics, Politics & Finance, Ersan ERSOY, vol. 10(1), pages 92-106.
    • Handle: RePEc:ahs:journl:v:10:y:2025:i:1:p:92-106
    DOI: https://doi.org/10.30784/epfad.1588558
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    References listed on IDEAS

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    1. Yu, Xianyu & Wu, Zemin & Wang, Qunwei & Sang, Xiuzhi & Zhou, Dequn, 2020. "Exploring the investment strategy of power enterprises under the nationwide carbon emissions trading mechanism: A scenario-based system dynamics approach," Energy Policy, Elsevier, vol. 140(C).
    2. Baltagi, Badi H. & Wu, Ping X., 1999. "Unequally Spaced Panel Data Regressions With Ar(1) Disturbances," Econometric Theory, Cambridge University Press, vol. 15(6), pages 814-823, December.
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    Keywords

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    JEL classification:

    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities

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