Green Energy & Regional Development I: An Empirical Investigation of Turkish Provinces

Executive Summary

This analysis examines the empirical relationship between green power transitions and socio-economic development at the province level in Turkey. Using propensity-score matching (PSM) and exact matching (CEM), it was found that provinces with a higher share of wind and solar power in their overall electricity production exhibit higher levels of socio-economic development. On the contrary, provinces with a higher share of hydroelectric power in their overall electricity output do not exhibit any significant differences in socioeconomic development compared to their respective control group. This study provides a framework for analyzing the developmental and cross-regional aspects of energy transitions with a focus on Turkey.

Introduction

The positive socioeconomic impact of energy transitions on the Turkish economy is shown through a calibrated macroeconomic model. These simulations suggest that Turkey can be carbon-free by 2050 and that the benefits of this transition drastically outweigh its costs.1 This analysis provides the initial framework for the analysis of the socioeconomic dimensions of wind, solar, and hydroelectric power transitions, which are considered the most significant both in terms of volume of energy produced and their share in overall electricity production. Using the 81 provinces of Turkey as the main unit of analysis (in Turkish, il), I observe a positive and significant empirical relationship between dependence on wind and solar power production and socioeconomic performance at the province level. This is particularly the case for average income, for which a positive and significant average treatment effect is reported both with a propensity-score matching (PSM) and a coarsened exact matching (CEM) estimator.