Green Accounting and Climate Change Problem: A New Evidence from the Turkish Economy

The motivation of the paper is to include the environmental quality indicators in the national accounts of a country in high economic growth. We took as an example Turkey. Since the country has been rapidly growing both in terms of economy and population during the 1980s. During the last decade, its demand for energy increased about 4.4 percent per year, with electricity consumption growing at an average annual rate of about 8.5 percent. The use of the most common fuel (domestic lignite) has doubled between 1980 and 1997. Naturally, a growing energy consumption has negative impacts on the environmental quality. However, the determination of the optimal environmental policy without reducing the economic growth is still a challenge for the Turkish decision makers. In this paper, the level of environmental quality is deÖned by GHG emissions and the economic performance is determined by the Weitzman criteria. A dynamic applied general equilibrium model (DAGEM) is used in order to quantify the impact of taking into account of national environmental quality on the Turkish national accounts. We run the model under GAMS for the period 1980-2050 using Turkish data.