Financial inclusion and environmental pollution in Türkiye: Fresh evidence from load capacity curve using AARDL method

Sustainability is an important concept for the whole world. Generally, in order to measure the sustainability of the environment, carbon dioxide emissions and ecological footprint indicators are used. However, these variables do not reflect the supply side of natural resources. Therefore, load capacity factor is an important environmental indicator for a sustainability. Environmental assessment based on the load capacity factor is more meaningful. Besides, improved access to financial services can contribute to environmental sustainability. The effect of financial inclusion on the load capacity factor in Türkiye has not been examined in the current literature. In this context, this study analyzes the impact of financial inclusion, hydropower energy consumption, and life expectancy at birth on environmental sustainability from a different perspective by focusing on load capacity factor. To this end, this study used the newly developed Augmented ARDL method to determine the cointegration relationship between the series and measure the values of the long-term coefficients. Based on the Augmented ARDL method, there is a cointegration relationship between the series. In the long run, hydropower energy consumption reduces pollution, while financial inclusion decreases load capacity factor. The effect of life expectancy at birth on pollution is not significant. Moreover, the results reveal that the load capacity curve hypothesis is valid in Türkiye. As a result, the Turkish government should promote renewable energy sources, especially hydropower energy consumption, align financial services with pollution reduction measures, and contribute to the creation of an environmentally conscious society.

Do life expectancy and hydropower consumption affect ecological footprint? Evidence from novel augmented and dynamic ARDL approaches

Human activities threaten the future of the ecosystem by emitting pollution to the air, water, and soil. Considering the increasing ecological footprint (EF), the study focuses on investigating the role of life expectancy and hydropower consumption by controlling also income, trade openness, and globalization on the environment under the environmental Kuznets curve (EKC) hypothesis for Turkey during 1971-2018. In this context, the study performs recently developed augmented autoregressive distributed lag (AARDL) and dynamic ARDL (DARDL) methods. The results show that (i) life expectancy increases the environmental pressure; (ii) hydropower consumption has no effect on the EF; (iii) globalization and trade openness reduce the EF; (iv) the EKC hypothesis is valid, but the estimated turning point lies between USD 19,914 and USD 20,571, which is far from the sample period in Turkey. From the overall results, it can be concluded that Turkey cannot solve environmental problems with insufficient income levels, an increasing elderly population, and ineffective use of hydropower. Hence, Turkey should rely on income much more, use hydropower much more efficiently, and benefit from the spillover effect of technological innovations related to globalization and foreign trade to significantly reduce the EF.

Is the EKC hypothesis valid in the five highly globalized countries of the European Union? An empirical investigation with smooth structural shifts

This study analyzes the impact of globalization and income on ecological footprint over the period of 1970 to 2018 in the five highly globalized countries of the European Union ranked by the KOF index. To this end, the study uses a Fourier autoregressive distributed lag cointegration and Fourier Toda-Yamamoto causality methods. Studies that examine the effects of globalization on environmental degradation often neglect structural changes, which can lead to biased results. Using Fourier approximations, this study is the first to conduct an environmental assessment incorporating smooth structural changes for the five highly globalized countries of the European Union. The results show that (i) cointegration exists in Switzerland, Sweden, the Netherlands, Austria, and Denmark. (ii) The EKC hypothesis is valid for Switzerland and Denmark, while in Sweden and Austria, there is a U-shaped relationship between income and ecological footprint. (iii) The turning point at which income improves environmental quality is $68,191 for Switzerland and $46,600 for Denmark, and both countries have exceeded this per capita income level. (iv) Globalization is a factor that promotes environmental sustainability in Switzerland and the Netherlands. In order to regulate and manage environmental issues effectively, policy-makers should take advantage of economic development in Switzerland and Denmark as well as globalization in the Netherlands and Switzerland.