Relationship between Industrial Production, Financial Development and Carbon Emissions: The Case of Turkey

It is widely accepted that industrialization causes air pollution due to increased fossil fuel consumption. On the other hand, recent literature related with the impacts of financial development on air pollution has produced some mixed results. It is argued that not having proper energy policies has become a more severe problem for Turkey as the industrial activities have been accelerated in the country. The present study investigates the long run relationship between industrialization, financial development and carbon emissions by using Granger causality test in Turkey. Findings of the present study reveal a unidirectional relationship from financial development to carbon emissions.