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Carbon Hysteresis Hypothesis is Valid in Turkey: Evidence from Fourier Unit Root Tests

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  • Abdullah Emre ÇAÄžLAR
  • Mehmet MERT

Abstract

The aim of this study is to investigate whether the carbon hysteria hypothesis is valid in Turkey. With this study, it is aimed to improve the environmental quality in Turkey, which is one of the most emitter countries. For the presence of carbon hysteresis, the unit root properties of the CO2 emissions series are primarily investigated by Fourier-based ADF and LM tests. The results from Fourier-based tests show that the trigonometric terms are insignificant in the model. Thus, ordinary ADF unit root test results are reliable for CO2 emissions. The results of the ADF unit root test indicate that the series of emissions has a unit root and this result provides evidence that the carbon hysteresis hypothesis is valid in Turkey. Then, using the sequential Bai-Perron approach for the determination of the direction of the hysteresis, the sample period has been divided into regimes and it has been seen that the positive carbon hysteresis has been valid in all regimes. In conclusion, this study presents important environmental policies for Turkey’s carbon reduction targets.

Suggested Citation

  • Abdullah Emre ÇAÄžLAR & Mehmet MERT, 2022. "Carbon Hysteresis Hypothesis is Valid in Turkey: Evidence from Fourier Unit Root Tests," Fiscaoeconomia, Tubitak Ulakbim JournalPark (Dergipark), issue 3.
    • Handle: RePEc:fis:journl:220330
    DOI: 10.25295/fsecon.1119030
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    JEL classification:

    • Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General

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