The role of energy, political stability, and real income on achieving carbon neutrality: asymmetric evidence

Apart from business considerations stemming from the marketplace, businesses, individuals, and the economy at large, political decisions also play a role on environmental quality. Governments make a series of policies that impact private businesses, sectors, the environment, and the economy at large. In this paper, we test the asymmetric role of political risk on CO2 emissions, while controlling for renewable energy, non-renewable energy, and real income: policy toward environmental sustainability objectives in the context of Turkey. To realize the motive of this study, we capture the asymmetric effect of the regressors by adopting the nonlinear autoregressive distributed lag method (NARDL). This research adds to the environmental literature in terms of methodological and empirical. Methodologically, the study shows that a nonlinear relationship exists among the variables, and it has a significant impact on environmental sustainability targets. The outcome of the NARDL indicates that the increasing political risk, non-renewable energy, and economic growth follow a trajectory trend on carbon emissions, which is unsustainable in Turkey, but renewable energy is sustainable. Moreover, decreasing real income and non-renewable energy decreases carbon emissions. This research also deployed the frequency domain test to capture the causal association of the concerned variables and the outcome indicates political risk, renewable energy, non-renewable energy use, and real income are predictors of CO2 in Turkey. From this result, policies geared toward promoting a sustainable environment were formulated.