Energy Efficiency and Environmental Sustainability: Investigating the Moderating Role of Trade Openness in Türkiye

This study investigates the role of fossil fuel energy efficiency (FFE) in shaping environmental sustainability in Türkiye, with particular emphasis on the moderating effect of trade openness (TO) over the period 1982–2023. Environmental sustainability is proxied by the Load Capacity Factor (LCF), which integrates ecological footprint and biocapacity within the Load Capacity Curve (LCC) framework. Long-run relationships are examined using the Fourier ARDL bounds testing approach to account for structural breaks, while coefficient robustness is ensured through Fully Modified Ordinary Least Squares (FMOLS) and Canonical Cointegrating Regression (CCR) estimators. The empirical findings indicate that improvements in energy efficiency contribute positively to environmental sustainability, and this effect is significantly strengthened when energy efficiency interacts with trade openness (FFE × TO). This suggests that trade openness enhances the environmental gains of energy efficiency through technological spillovers. In addition, the results reveal an inverted-N-shaped nonlinear relationship between economic growth and environmental sustainability, indicating varying environmental pressures across different income levels. Overall, the findings highlight the importance of integrating trade policies with energy efficiency-oriented green technology strategies to achieve sustainable environmental outcomes in Türkiye.