Insurance Market Development, Energy Consumption, and Turkey’s CO2 Emissions. New Perspectives from a Bootstrap ARDL Test

Abstract

Many empirical studies have tested the linkage among CO2 emissions, economic growth, and consumption of energy; however, most have not tested the possible influence of insurance market development on their frameworks. This research aims to provide new perspectives on the empirical literature by exploring the role of insurance market development on environmental degradation. The study utilizes a new technique of the bootstrap Autoregressive Distributed Lag (ARDL) test as introduced by (McNown et al., 2018). The ARDL testing approach is utilized to explore the short and long linkage between the examined variables. Furthermore, the research utilized the Granger causality to explore the of causality linkage among the selected variables. The findings illustrate that economic growth and consumption of nonrenewable energy have positive influence on CO2 emissions. Furthermore, the findings illustrate that the insurance market development has a positive influence on the levels of Turkey’s carbon emissions; this finding is also confirmed through the economic growth channel. The outcomes of the current study suggested that the Turkish policy makers should make strategies and policies to ensure the sustainable development of insurance markets, to reduce environmental degradation by supporting the projects, and to invest in clean energy sources.