1st Edition
Low Carbon Transition in Emerging Economies Climate Policy, Carbon Pricing and the Effect on Employment
Many emerging economies are on the front line of the devastating impacts of global warming such as desertification and extreme weather events, but, for historical and political reasons, they follow ambitious growth targets with seemingly little concern for climate change and environmental degradation. Focusing on the case of Turkey, this book investigates the economic impacts of possible climate change policies to help meet the required mitigation targets and transition to a low carbon economy. In order to reach net-zero targets by 2050 in compliance with the Paris Agreement, Turkey must introduce policies that promote low carbon investments, green jobs and low carbon employment more broadly. This book explores the empirical evidence on the effectiveness of a carbon pricing mechanism by developing an econometric vector autoregression (VAR) model to analyse key data sets. This time series analysis provides insights on a macro level, dealing with aggregate data in which the role and complexity of micro interferences disappear, allowing for the discovery of patterns and changes over time. Thus, the book contributes to the literature on methodology by arguing that time series analysis is one of the best-fitting approaches to estimate possible impacts of climate change policies on an economy. Additionally, the results of the model are compared and contrasted with similar data from other emerging economies to identify potential common policy solutions between countries at a similar stage of development. This book is vital reading for researchers interested in climate policy, the economics of climate change and environmental economics.
1 Introduction
1.1 Relevance
1.2 Contribution of the Study
1.3 Scope of the Research
1.3.1 Research Questions
1.3.2 Objectives
1.3.3 Methodology
2 The Concept of Transition to Low Carbon Economy
2.1 Nature and Economic Systems
2.2 Dynamics of the Climate Crisis
2.3 Policy Instruments for a Low Carbon Economy and Their Theoretical Background
2.3.1 Carbon Tax
2.3.2 Carbon Markets
2.3.3 Clean Development Mechanism
2.3.4 The Case of Emerging Economies and Turkey’s Path: From Voluntary Carbon Markets to Paris Agreement
2.4 Critiques of the Established Mechanisms
2.4.1 Carbon Colonialism
2.4.2 Structural Issues
2.4.3 Political Economy of Fossil Fuels
3 Macroeconomics of the Environmental Policy in Turkey
3.1 Trends in the Macroeconomic Policy
3.1.1 The Growth Imperative After 1980
3.1.2 Economics of AKP Governments
3.1.3 Employment Policy
3.2 Environmental Policy and Sectoral Outlook
3.3 A Critical Literature Review on the Possible Impacts of Climate Change Policies in Turkey
3.3.1 Qualitative Studies
3.3.2 Quantitative Studies
4 Empirical Analysis
4.1 Data Description and the Model
4.1.1 Classification of Sectors Based on the CO2 Intensity
4.1.2 Output Data of High and Low Carbon Intensive Sectors
4.1.3 Employment Data of High and Low Carbon Intensive Sectors
4.1.4 Greenhouse Gas Emissions Data of High and Low Carbon Sectors
4.1.5 Unrestricted VAR Model and Stability Check
4.1.6 Policy Scenario 1: Carbon Pricing and Subsidy for LCIS Output
4.1.7 Policy Scenario 2: Carbon Pricing and Support for Employment in LCIS
4.1.8 Policy Scenario 3: Carbon Pricing and Support for Employment in HCIS and LCIS
4.2 An Experiment with the Aggregate Sectoral Data from Turkey
4.2.1 Data Description and the Model (without Agriculture Sector)
4.2.2 Output Data of High and Low Carbon Sectors (without Agriculture sector)
4.2.3 Employment Data of High and Low Carbon Sectors (without Agriculture sector)
4.2.4 Greenhouse Gas Emission Data of High and Low Carbon Sectors (without Agriculture sector)
4.2.5 Unrestricted VAR Model (without Agriculture) and Stability Check
4.2.6 Policy Scenario 4: Carbon Pricing (without Agriculture) and Subsidy for LCIS Output
4.2.7 Policy Scenario 5: Carbon Pricing (without Agriculture) and Support for Employment in LCIS
4.2.8 Policy Scenario 6: Carbon Pricing (without Agriculture) and Support for Employment in HCIS and LCIS
5 Conclusions
Appendices
Biography
Erkin Erdoğan is an independent researcher based in Berlin, Germany. He obtained his doctoral degree in economics at the University of Hamburg. His research focuses on the economic impacts of climate change policies, carbon pricing and energy transition in emerging economies.
