Bianet, May 21,2021, Ebru Voyvoda
The global economic and social order is reshaping in the face of stagnation and climate crises. Turkey is strengthening the dimensions and effects of the structural emergencies by not being involved in these developments.
The global system has been struggling with the multidimensional effects of the Covid-19 outbreak and the uncertainties and vulnerabilities deepened by the epidemic since March 2021.
Before the coronavirus pandemic, the global economy had been already defined by the state of « continuous crisis » that gradually deepened and structuralized.
Increasing inequalities that started with the turmoil in the US financial markets in 2008 and reached a global dimension in a short time, weakening productivity dynamics, ‘trade and technology wars’ that threaten the global supply chains, and climate crisis and ecological problems which seem dragged into a deadlock…
On the other hand, the pandemic has deepened uncertainties, social inequality, and vulnerabilities while strengthening the trends that have continued since the 2008 global financial crisis.
However, the content of the ‘exit’ policies developed in the face of the epidemic, discussions on the world after Covid-19, and steps taken in this direction show that climate policies will be of critical importance in reshaping the global order in the coming period.
Where does the path go?
The Paris Agreement, which shapes global climate policies today, entered into force in November 2016. The agreement sets a goal of « limiting the rise in global average temperature well below 2 degrees above pre-industrial levels and pursuing efforts to limit the temperature increase even further to 1.5 degrees » to prevent climate disasters.
This goal, together with the aim of the Intergovernmental Panel on Climate Change (IPCC)- to move towards a path where there are no net greenhouse gas emissions in the middle of the century, constitute the main pillars of the policies for combating climate change.
The envisaged ‘net zero’ paths emphasize the need to use different tools/policies, from energy efficiency increases to renewable energy and major technological transformations.
New trends in the global economy
The « EU Green Deal » prepared by the European Commission in December 2019 and embodied with the European Climate Law adopted on April 21. It underlines that a critical period in terms of climate has started.
Green Deal sets out its wide-ranging goal as « a productive, competitive economy and a fair and prosperous society for EU economies, where there are no net greenhouse gas emissions in 2050, and growth separated from resource use ».
As a matter of fact, the scope of the policies designed in line with these goals emphasizes that elements such as clean and safe energy, labor-intensive low-emission technologies, infrastructure, construction and building renovations, smart transportation systems, transformation in the industry for the circular economy, and safe food systems will come to the fore in the green transformation.
It is planned to establish a financial system that encourages private capital to invest in the climate and environment under the leadership of the public for the necessary financing and investments to take the steps designed in line with this transformation (an additional 260 billion Euros per year in the EU, 1.5% of 2018 EU GDP).
The US and green transformation
The fact that the Joe Biden administration (re) joined the Paris Agreement on the first day he took office and the Leaders’ Summit held by the US on April 22-23 this year are important signals which show the criticality of the issue.
Again, the enormous American Rescue Plan ($1.9 trillion) proposed by the Biden administration in March 2021 and American Jobs Plan ($2 trillion), which plans to create qualified and permanent employment with a green transformation, constitute concrete policy proposals put forward by the US on the new global regime and green transition.
These policies have been put forward in the face of structural problems that have become multidimensional with the global pandemic.
They aim to intervene in economic and social crises which have gradually deepened and life-threatening climate crisis. So, they can rearrange the working conditions and dynamics of global capitalism.
Turkey: Static and historical perspective, sectors, possibilities
As the global economic and social order is reshaping in the face of the recession and climate crises, Turkey defines itself as an « outsider » by being one of the six countries that have not ratified the Paris Agreement as of May 2021.
Among 197 countries, six countries that have not ratified the Paris Agreement include Turkey, Iran, Eritrea, Iraq, Libya, and Yemen. As a reason for not passing the Paris Agreement through the parliament, Turkey puts forward the demand to be transferred from the developed country group to the developing country group and get financial support from the fund.
When evaluated in terms of the indicators of climate change, Turkey shows the characteristics of a « developing country. » In 2019, Turkey was responsible for 1.1% of global emissions with 506.1 million tons of CO2 equivalent of greenhouse gas emissions and 399 million tons of CO2.
In terms of per capita emissions, 4.7 tons (2016) is below the OECD average (9.0 tons) and close to the world average. Again, the energy consumption/output ratio is 63.1 kg (oil equivalent / 000 2017 SGP USD), lower than the OECD average of 95.7.
The 15th country with the largest emission share
However, the fact that the emission per revenue (0.18 kg / 2017 SGP USD) is close to the OECD average of 0.21 indicates that there is a close relationship between energy consumption, production, and emissions.
Turkey is a country that has failed to achieve production-emission decoupling, has high emission increases (first among OECD countries with an increase of 175% between 1990-2018), intensive fossil fuel (coal) subsidies, and is the 15th largest pollutant in 2019 with a global emission share of 1.1%. increase
When evaluated in terms of all these criteria, staying out of the Paris Agreement means staying out of the « green transformation » and global new order design, which is understood to have wide-ranging international reflections in the face of the climate crisis.
Approximately 80% of Turkey’s 506.1 million tons of CO2 equivalent of greenhouse gas emissions consist of CO2.
The biggest share in this number is emissions from energy (burning of fuels) with 350 million tons in 2019.
The remaining 12.5% is CO2 emissions, especially from mineral products (cement) and chemical industry production processes. The biggest share in emissions from energy is conversion and energy sector with 42%.
Coal power plants
Therefore, when evaluated in terms of CO2 emissions in Turkey, the biggest share emerges as the electricity generation sector. Here, the percentage of coal power plants, in particular, is around 75%. The remaining part belongs to natural gas power plants.
Emissions from coal and natural gas fossil fuels, which have a share of over 50% in total electricity generation, emerged as a result of Turkey’s coal incentive strategy.
Subsidizing coal is not rational
These numbers also point to significant potential in terms of climate policies. With the tremendous decreasing trends in wind and solar-based renewable energy costs, energy production based on fossil fuels is becoming increasingly costly in all respects.
In an environment entirely left to market conditions, it is clear that the natural trend in Turkey will also be towards renewable energy. When evaluated from this point of view, Turkey’s insistence on coal subsidies does not seem rational in terms of both climate policies and economic benefits.
The transport sector ranks second
Within the total (energy-related) CO2 emissions, the transportation sector has the largest share with 23%.
Here, it should be emphasized that Turkey has great potential in terms of both economic transformation and growth and climate policies.
Because Turkey is far behind the EU countries in terms of transition infrastructure to sustainable modes of transport and it is at a very weak point in the transformation of both inter-city public transport and urban transport systems.
Moreover, the increasing share of transportation in total public investments- and the share of highway investments in this total- caused a rapid increase in CO2 emissions from the transportation sector (228% cumulatively between 2000-19).
Thus, fossil fuels based on imports (natural gas, petroleum, coal) in the total energy supply arising from the demand of the conversion and energy sector and the transportation sector increase Turkey’s « pollution » and feeds the chronic current account balance problem.
Manufacturing sectors (manufacturing industry, construction, agriculture, and services) are another 25% source of CO2 emissions. Household energy use is another resource, with 10%.
Here, especially the construction industry-related iron-steel and cement sectors stand out with both energy-intensive production processes and non-energy CO2 emission contributions.
As a matter of fact, emissions from these sectors, linked with the production dynamics of the construction industry. The construction sector, which shrank around 9% in 2019, led to a 16% reduction in emissions from industrial processes, especially in the cement sector.
Growth policies based on the construction and real estate sectors, on the one hand, feed unproductive, outsourced growth dynamics, and on the other hand, play an increasing role in escalating CO2 emissions.
The structural crisis is getting stronger
Turkey’s structural transformation towards productive sectors is necessary for a sustainable growth path with many dimensions. Energy efficiency-especially in energy-intensive and critical sectors in terms of growth and export, and the shift from fossil fuels to electricity are important elements of this transformation.
While the global economic and social order is reshaping in the face of the long recession and climate crises, Turkey cannot produce broad-framed economic policies based on concrete sectoral targets that address structural transformation, productive investments and employment/wage problems together with sustainable growth and green economy.
The growth model, in which static policies prevail instead of forward-looking and dynamic policies, strengthens the dimensions and effects of the structural crisis that has deepened and progressed since 2018. (EV/SO/VK)
Dr Ebru Voyvoda is professor at Department of Economics, Middle East Technical University.