Energy usage in Türkiye: An Index decomposition and econometric analysis

Understanding the drivers of energy consumption is essential for addressing global energy challenges. This study examines energy usage in Türkiye using Index Decomposition Analysis (IDA) and the Autoregressive Distributed Lag (ARDL) model. The IDA, applied to sectoral energy data for the industrial, service, and agricultural sectors from 1990 to 2023, reveals that production effect increased total energy consumption by nearly 87%, while structural changes reduced it by approximately 14%, and improvements in energy intensity reduced it by about 21%. The ARDL analysis, based on annual data from 1960 to 2023, confirms a long-run relationship among energy consumption per capita (EC pc), Gross Domestic Product per capita (GDP pc), (CO₂ pc), and the share of renewable energy in total energy production. The results indicate an adjustment toward the long-run equilibrium, with approximately 46% of any deviation corrected each year, reflecting both short-run and long-run relationships. We also examine the Environmental Kuznets Curve (EKC) and Energy-Environmental Kuznets Curve (EEKC) hypotheses. Our results support an inverted U-shaped EEKC between EC pc and GDP pc, and an EKC between CO₂ pc and GDP pc. To ensure robustness, Ordinary Least Squares (OLS) estimates are reported as a benchmark specification.