The impact of financial development on renewable energy consumption: Evidence from Turkey

Global warming creates significant problems for people, such as severe droughts. One of the biggest causes of global warming is the preference of fossil fuels in energy production. Therefore, renewable energy projects should be increased to overcome this problem. However, there is a need for a new study that considers different indicators at the same time to understand the key issues for improving renewable energy projects. This study aims to evaluate the influence of financial development, economic growth, and energy prices on energy use. Within this framework, the VECM and ARDL techniques were employed to the data spanning from 1980 to 2019 for Turkey. The findings demonstrate that financial development has a positive and statistically significant influence on renewable energy consumption. According to the findings, a 1% increase in financial development leads to a 0.21% rise in renewable energy consumption. The main novelty of this study is to provide appropriate strategies for Turkey to increase renewable energy investments that contribute to sustainable social and economic development. Additionally, the analysis results of this study pave the way for other energy-importing countries. Thus, with the help of increasing renewable energy projects, it can be much easier to handle the global warming problem.