Erkan Erdogdu

Electricity tariff setting in emerging economies often faces a governance trilemma between cost recovery, macroeconomic stability, and political acceptability. This paper develops and evaluates a transparent, rule-based tariff mechanism as an alternative to discretionary, audit-centered regulation. Using Turkiye as a case study for high-inflation and high-loss environments, we apply an Autoregressive Distributed Lag (ARDL) framework to examine whether residential electricity bills can be benchmarked against publicly observable cost drivers, specifically consumer price index (CPI) and wholesale market clearing prices (MCP). The empirical results indicate that the exchange rate does not enter the long-run tariff equation independently once wholesale market prices are included. Correlation and VIF diagnostics suggest that this reflects substantial collinearity among USD/TRY, CPI, and MCP, consistent with the interpretation that exchange-rate pass-through is largely embedded in wholesale market prices and broader inflationary dynamics. Residual diagnostics point to serial correlation, heteroskedasticity, and non-normality, especially after 2020. These patterns are consistent with delayed tariff adjustment and discretionary price smoothing. Building on the estimated relationship, the paper derives an illustrative rule-based benchmark that anchors regulated tariffs to observable macroeconomic and market variables and separates non-technical losses from standard tariff recovery. The proposed framework offers a replicable approach to tariff-rule design, showing how transparent indexation can improve policy discipline, reduce information asymmetry, and make subsidy choices more explicit in volatile electricity markets.

What problem does it examine?

How electricity tariffs in high-inflation, high-loss economies such as Turkiye get caught between cost recovery, macroeconomic stability and political acceptability, and how discretionary tariff setting distorts price signals.

What is the main finding?

Once wholesale prices are accounted for, the exchange rate adds no independent explanatory power for tariffs, as its effect is largely embedded in wholesale prices and inflation; post-2020 patterns point to delayed adjustment and discretionary price smoothing.

Why does it matter for policy?

A transparent rule linking tariffs to public indicators such as CPI and wholesale prices would strengthen policy discipline, reduce information asymmetry and make subsidy choices explicit by separating non-technical losses from standard tariff recovery.

This study develops an integrated ARMAX–GARCH anomaly-detection framework for identifying potential strategic bidding and manipulation in day-ahead electricity and other energy-commodity markets. By combining econometric modeling of fundamentals with conditional volatility dynamics, the framework distinguishes between normal, fundamentals-driven price movements and anomalies indicative of strategic behavior. Using Turkiye's day-ahead electricity market as a detailed case study of an emerging liberalized system, the analysis demonstrates how the method can uncover hidden irregularities within auction-based commodity exchanges. The results show that price anomalies—defined as statistically significant deviations unexplained by fundamentals—cluster systematically during low-liquidity hours and intensify during periods of external stress, such as pandemic disruptions or global energy crises. These findings challenge the view that commodity-price volatility is purely random, revealing that market design and participant behavior jointly shape observed dynamics. The model further indicates that greater renewable generation and higher system capacity mitigate the probability of anomalous outcomes, underscoring the stabilizing role of supply diversification. Beyond its national context, the study contributes to the broader literature on commodity-market volatility, market power, and regulatory surveillance, showing how econometric diagnostics can serve as early-warning instruments for policymakers and market operators. By linking volatility modeling with enforcement analytics, the proposed methodology offers a replicable blueprint for monitoring strategic conduct and strengthening integrity across global energy-commodity markets.

What problem does it examine?

How to distinguish normal, fundamentals-driven price movements from anomalies caused by strategic bidding or manipulation in liberalized day-ahead electricity markets.

What is the main finding?

In Turkiye's day-ahead market, price anomalies cluster in low-liquidity hours and intensify during stress periods such as the pandemic and global energy crises, while more renewable generation and system capacity reduce their likelihood.

Why does it matter for policy?

The method can serve regulators and market operators as an early-warning tool for market surveillance; closer monitoring of low-liquidity hours and supply diversification strengthen market integrity.

This paper critically examines economic policy reforms in energy markets, focusing on developing economies. It highlights that while standard reform models provide valuable guidelines, they often fail in less-developed institutional environments, leading to mixed results. By analyzing two decades of Turkish reforms, the study emphasizes the need to adapt strategies to local contexts, ensuring regulatory stability, transparency, and complete information. Additionally, the paper includes an econometric analysis of oil smuggling, offering empirical insights. The conclusion stresses that partial reforms do not yield proportional benefits, underscoring the importance of full implementation.

What problem does it examine?

Why standard energy-market reform models often fail to deliver the expected results in developing economies with weaker institutions.

What is the main finding?

Two decades of Turkish experience show that reform success depends on adaptation to local conditions, regulatory stability, transparency and complete information; partial reforms do not yield proportional benefits.

Why does it matter for policy?

Countries designing reforms should adapt off-the-shelf models to their own institutional realities and implement reforms fully rather than stopping halfway.

The transition to low-carbon energy sources presents critical challenges for competitive electricity markets, particularly in developing economies. This study examines the role of nuclear energy in achieving net-zero targets while addressing market inefficiencies and policy gaps. Using Turkiye as a case study, our findings reveal that nuclear power, despite its low-carbon benefits, faces financial and regulatory barriers that hinder its competitiveness. Through an empirically validated policy model, we propose market-compatible instruments, such as Contracts for Difference (CfD) and capacity remuneration mechanisms, to enhance nuclear investment. These insights offer actionable policy solutions to reconcile nuclear energy deployment with market efficiency.

What problem does it examine?

Why nuclear power, despite being low-carbon, struggles to attract investment in competitive electricity markets, especially in developing economies, because of financial and regulatory barriers.

What is the main finding?

The Turkish case shows that nuclear power can support net-zero goals but financial and regulatory barriers limit its competitiveness; market-compatible instruments such as Contracts for Difference and capacity remuneration can help overcome these barriers.

Why does it matter for policy?

It shows that support for nuclear investment can be designed within, rather than outside, competitive market structures, reconciling decarbonization with market efficiency.

Climate change demands transformative economic restructuring, posing unique challenges for emerging economies in transition. This study examines the critical role of carbon pricing and emissions trading systems (ETS) in advancing sustainable development while achieving net-zero greenhouse gas (GHG) emissions. Focusing on the EU-Turkiye relationship, the paper explores how transitional economies can align carbon markets with growth strategies, navigating the interplay of economic equity, environmental sustainability, and global cooperation. The research redefines climate change as a challenge of market design, arguing that integrating negative externalities into economic systems via carbon pricing can drive the shift to low-carbon economies. A key finding highlights the energy sector’s pivotal role, particularly through ETS, in balancing emissions reductions with economic resilience. The study advances existing literature by proposing equitable burden-sharing mechanisms between developed and developing nations, addressing the historical responsibility of developed countries and the developmental needs of emerging economies. This work offers a framework to harmonize climate policy with broader development goals, emphasizing scalable, market-based solutions. By presenting the EU-Turkiye partnership as a case study, the findings provide actionable insights for integrating economic restructuring with climate mitigation, contributing to a global model for sustainable transition.

What problem does it examine?

How transitional economies such as Turkiye can align carbon markets with growth strategies while pursuing net-zero emissions.

What is the main finding?

Carbon pricing, and emissions trading in the energy sector in particular, plays a pivotal role in balancing emission cuts with economic resilience; climate change can be treated as a problem of market design.

Why does it matter for policy?

By proposing equitable burden-sharing between developed and developing countries, it offers a workable framework for reconciling climate policy with development goals in partnerships such as EU–Turkiye.

The European Union's Carbon Border Adjustment Mechanism (CBAM) represents a groundbreaking policy to address global climate change by mitigating carbon leakage and aligning international trade with environmental objectives. As the first initiative of its kind, CBAM imposes carbon pricing on imported goods, encouraging non-EU producers to meet stringent environmental standards. This mechanism not only supports the EU's ambitious Green Deal targets but also drives innovation, fostering a global transition to low-carbon technologies. This paper offers an analysis of CBAM's design, phased implementation, and possible impacts. While CBAM drives technological advancements and strengthens climate governance, it also poses challenges, including compliance burdens for developing nations and potential geopolitical tensions. CBAM also promotes sustainable economic transformation by encouraging exporters in carbon-intensive sectors to adopt green technologies, enhancing competitiveness and resilience. However, without financial and technical assistance, compliance costs risk deepening global inequalities. This study underscores CBAM's dual role as an environmental policy and a catalyst for equitable sustainability, linking economic, environmental, and technological dimensions. The findings highlight how trade policies can address global challenges, drive innovation, and reshape international climate governance, offering insights for policymakers navigating the complexities of sustainable development.

What problem does it examine?

What opportunities and challenges the EU's Carbon Border Adjustment Mechanism (CBAM) creates for non-EU countries, particularly developing exporting economies.

What is the main finding?

CBAM can curb carbon leakage and accelerate the shift to low-carbon technologies, but without financial and technical assistance its compliance costs risk deepening global inequalities.

Why does it matter for policy?

It highlights why countries exporting to the EU need to prepare their carbon-intensive sectors for a green transition, and why international financial and technical support matters.

This paper uses high-frequency spot price data from fourteen wholesale electricity markets in Europe to analyze asymmetric volatility in European day-ahead power markets with Exponential GARCH (E-GARCH) and TARCH models. Our data set ranges from 1992 to 2015 and consists of approximately 926,000 observations. As such, this paper constitutes the most extensive and comprehensive work conducted so far on European power markets, to the best of our knowledge. Unlike most of the literature that treats price as a continuous variable and attempts to model its trajectory, this paper adopts a unique approach and regards each hour in a day a separate market. The results show, in post-2008 period, the most expensive electricity is consumed in Turkey, Ireland, and UK while the cheapest power is in Russia, Nordic countries, and Czech Republic. Russia, Poland, and Czech Republic have the least volatile markets while France, Ireland, and Portugal have the most volatile ones. Volatility has decreased in many European countries in post-2008 period. Besides, we find magnitude effect is usually larger than the leverage effect, meaning that the absolute value of price change is relatively more important than the sign of the change (whether it is an increase or a decrease) to explain volatility in European day-ahead power markets. Moreover, the results imply there is not a uniform inverse leverage effect in electricity prices; that is, price increases are more destabilizing in some European markets (e.g. Poland, Slovenia, Ireland, Netherlands) than comparable price decreases but vice versa also holds true in some other countries (e.g. Portugal and France). Leverage (or inverse leverage) effect in post-2008 period is relatively stronger in Portugal, France, and Ireland, but its impact is quite limited in Turkey and Germany. Furthermore, although the impact of seasonality on prices is obvious, a specific pattern cannot be identified. Finally, large changes in the volatility will affect future volatilities for a relatively longer period of time in Nordic countries, Ireland, and the UK while changes in current volatility will have less effect on future volatilities in Czech Republic, Russia, and Turkey.

What problem does it examine?

How price volatility differs across European day-ahead power markets and over time, and whether price rises and falls affect volatility asymmetrically.

What is the main finding?

Volatility fell in many European markets after 2008; the size of a price change matters more than its sign, and the direction of asymmetry varies by country. After 2008, electricity was most expensive in Turkey, Ireland and the UK.

Why does it matter for policy?

It shows that market design, risk management and surveillance should account for each market's own volatility structure rather than assume a uniform pattern.

More than half of the countries in the world have introduced a reform process in their power sectors since 1980s. Adapting a political economy perspective, this paper attempts to discover the impact of political economic variables on the liberalization process in electricity markets. Empirical models are developed using panel data from 55 developed and developing countries covering the period 1975- 2010. The research findings clearly show that political variables have a significant impact on the reform progress. Consistent with public choice theory and economic theory of regulation, our results suggest that a portion of the differences in the reform experiences of reforming countries in the past three decades can be explained by differences in the relative strength of interest groups. We find that industry sector has a significant impact on the pace of power market liberalization process; and as its size gets larger, so does its influence. Our results also imply that countries receiving foreign financial support are more likely to liberalize their electricity markets, which underlines the point that reforms may not be always voluntary. In addition, our findings suggest that government ideology is one of the determinants of the progress in electricity market reform process. Finally, the paper also questions whether politicians' education and profession matter for the electricity market reforms. Overall, the results show they do.

What problem does it examine?

How political-economy factors such as interest groups, foreign financial support, government ideology and politicians' backgrounds shape how far and how fast countries liberalize their electricity markets.

What is the main finding?

Data for 55 countries over 1975–2010 show that the strength of the industrial sector, foreign financial support, government ideology and politicians' education and profession significantly affect reform progress.

Why does it matter for policy?

It shows that reform is not only a matter of technical design: political feasibility and stakeholder interests must be built into reform strategy from the start, and reforms may not always be voluntary.

The world's most expensive motor fuel (gasoline, diesel and LPG) is sold most likely in the Republic of Turkey. This paper investigates the key issues related to the motor fuel prices in Turkey. First of all, the paper analyses the main reason behind high prices, namely motor fuel taxes in Turkey. Then, it estimates the elasticity of motor fuel demand in Turkey using an econometric analysis. The findings indicate that motor fuel demand in Turkey is quite inelastic and, therefore, not responsive to price increases caused by an increase in either pre-tax prices or taxes. Therefore, fuel market in Turkey is open to opportunistic behavior by firms (through excessive profits) and the government (through excessive taxes). Besides, the paper focuses on the impact of high motor fuel prices on road transport associated activities, including the pattern of passenger transportation, motorization rate, fuel use, total kilometers traveled and CO2 emissions from road transportation. The impact of motor fuel prices on income distribution in Turkey and Turkish public opinion about high motor fuel prices are also among the subjects investigated in the course of the study.

What problem does it examine?

Why motor fuel in Turkey is among the most expensive in the world, and how high prices affect demand, transport, emissions and income distribution.

What is the main finding?

Taxes are the main driver of high prices, and because demand is highly inelastic the market is open to excessive profits by firms and excessive taxation by the government.

Why does it matter for policy?

Inelastic demand means fuel taxation and market oversight need careful, consumer-protective design, with attention to the distributional effects of taxes.

The last three decades have witnessed many electricity industry reform processes in more than half of the countries in the world. The reforms have aimed, inter alia, at encouraging private investments in electricity infrastructure, enhancing security of electricity supply and making power industry operate in line with the requirements of the sustainable development. Using an original panel dataset from 55 developed and developing countries covering the period from 1975 to 2010, this study aims at finding out to what extent these objectives have been materialized so far. Econometric models are used to identify the effects of electricity market liberalization on these variables. The research findings suggest that the progress toward the electricity market reform is associated with a decline in private investments in the electricity industries of developing countries, higher levels of self-sufficiency in electricity supply and lower CO2 emissions from electricity generation.

What problem does it examine?

To what extent three decades of power-sector reform have delivered on their goals of private investment, security of supply and sustainability.

What is the main finding?

Data from 55 countries show that reform progress is associated with lower private investment in developing countries, but with greater self-sufficiency in electricity supply and lower CO2 emissions from generation.

Why does it matter for policy?

It shows that in developing countries liberalization alone does not guarantee private investment, so the investment climate needs separate support.

The paper explores whether the question of why some countries are able to implement more extensive reforms is closely related to the question of why some countries have better institutions than others. We analyze this question by using an empirical econometric model based on Poisson regression with cross-section data covering 51 states in the US, 13 provinces in Canada and 51 other countries. In the course of the study, we check the validity of three important arguments of New Institutional Economics (NIE) for the power market liberalization process. The first argument is the "path-dependency". To test its impact on the reform progress, we try to explain whether the background of the chairperson of the regulatory agency when reforms started or that of the governor/minister responsible for energy policy at that time has an impact on the subsequent reform progress. The second argument is the impact of "democracy" as an institution on the reform progress. We look at the effect of two important indicators of democracy (i.e., civil liberties and political rights) on the reform progress. The final argument of NIE is about transaction costs. We concentrate on the level of corruption in a country as one of the key factors that determine transaction costs and try to explore its impact on the reforms. The results show that the backgrounds of the chairperson and the minister/governor, the level of democracy and corruption in a country are significantly correlated with how far reforms have gone in that country. The negative relationship between reform progress and civil liberties may indicate that reforms may be limited in democratic countries with strong civil society institutions such as trade unions or other organized structures in the society that may consider reforms as 'harmful' to their self-interest.

What problem does it examine?

Why some countries and states implement more extensive electricity market reforms than others, and whether this is linked to the quality of their institutions.

What is the main finding?

Data from US states, Canadian provinces and 51 other countries show that the backgrounds of the regulator's chair and the responsible minister or governor, the level of democracy and corruption are all significantly correlated with how far reforms have gone.

Why does it matter for policy?

It shows that reform success depends as much on institutional quality, appointments and anti-corruption efforts as on market design, and that strong organized civil-society groups may limit the scope of reform.

Since the early 1980s, electricity industry reforms have been initiated in more than half of the countries in the world. Among the primary targets of these reform schemes, there has been an increase in efficiency of the sector; and it is implicitly assumed that government support to energy technology R&D will progress in line with the reform process as the former is required to sustain improved efficiency in the middle and long run. The paper reviews the relation between reform process in electricity markets and government support to energy R&D. Using panel data from 27 countries covering the period from 1974 to 2008, this study aims at finding out to what extent the expected correlation between reform process and government support to energy R&D has in practice been materialized so far. The findings suggest that, contrary to expectations, the progress toward electricity market reform is associated with reduced government support to a variety of energy R&D activities, which threatens sustainable efficiency improvements in the power industry.

What problem does it examine?

How electricity market reforms affect government support for energy R&D, which is needed to sustain efficiency gains.

What is the main finding?

Panel data for 27 countries over 1974–2008 show that, contrary to expectations, reform progress is associated with reduced government support for a range of energy R&D activities.

Why does it matter for policy?

It suggests that, for efficiency gains to last in liberalized markets, public support for energy R&D must be protected and planned deliberately rather than left to the reform process.

The last two decades have witnessed widespread power market reforms in both developed and developing countries that have cost billions of dollars. Among the key aims (and assumptions) of these reforms, there has always been realization of improvements in power sector efficiency. This paper questions the validity of this hypothesis. Using panel data from 92 countries covering the period 1982-2008, empirical models are developed and analyzed. The research findings suggest that the impact of the reforms on electricity industry performance is statistically significant but also limited. The results imply that, after controlling for country-specific variables, application of liberal market models in electricity industries slightly increases efficiency in power sector. Besides, we detect a positive relationship between reform process and the percentage share of network (transmission and distribution) losses in total electricity supplied, meaning that as countries take more reform steps the network losses as a fraction of power generated tend to increase. Moreover, the study puts forward that income level and other country specific features are more important determinants of industry efficiency than the reform process. Overall, contrary to expectations of substantial increases in sector efficiency, the paper concludes that introducing a decentralized market model with competition in the electricity sector has a limited increasing effect on power industry performance.

What problem does it examine?

Whether electricity market reforms, which have cost billions of dollars, actually improved sector efficiency, one of their key justifications.

What is the main finding?

Data for 92 countries over 1982–2008 show that reforms raised efficiency only slightly, network losses tended to rise with reform steps, and income level and country-specific features mattered more than reform.

Why does it matter for policy?

It suggests that reforms should be designed with realistic expectations about efficiency gains, and that network losses in particular need close monitoring.

One of the main expectations from power market reform has been a reduction in both price-cost margins and cross-subsidy levels between industrial and residential consumers. This paper focuses on this issue by looking at the impact of the electricity industry reforms on residential and industrial electricity price-cost margins and their effect on cross-subsidy levels between consumer groups. Using panel data for 63 developed and developing countries covering the period 1982-2009, empirical models are developed and analyzed. The research findings suggest that there is no uniform pattern for the impact of reform process as a whole on price-cost margins and cross-subsidy levels. Each individual reform step has different impact on price-cost margins and cross-subsidy levels for each consumer and country group. Our findings imply that reform steps have different impacts in different countries, which supports the idea reform prescription for a specific country cannot easily and successfully be transferred to another one. So, transferring the formal and economic structure of a successful power market in a developed country to developing countries is not a sufficient condition for good economic performance of the electricity industries in developing countries. Furthermore, the study suggests that power consumption, income level and country-specific features constitute other important determinants of electricity price-cost margins and cross-subsidy levels.

What problem does it examine?

Whether electricity market reforms reduced residential and industrial price-cost margins and cross-subsidies between consumer groups as expected.

What is the main finding?

Data for 63 countries over 1982–2009 show no uniform effect of reform on margins and cross-subsidies; the effect of each reform step differs by consumer and country group.

Why does it matter for policy?

It shows that copying a successful country's market model is not enough to deliver good results elsewhere; reform prescriptions must be tailored to each country's conditions.

Over the last decade, Turkish electricity demand has increased more than 8% per annum as a result of economic development. Being one of the renewable energy sources par excellence, non-exhaustible, non-polluting and economically more attractive than other renewable sources, hydropower has turned out to be an important contributor to the future energy mix of the country. This paper deals with hydropower policies to meet increasing electricity demand for sustainable energy development in Turkey. Turkey has a total gross hydropower potential of 433 TWh/year and 140 TWh/year of this capacity can be used economically, corresponding to the second largest economic potential in Europe. Currently only 35% of economic hydro potential of the country is utilized. After completion of hydropower plants under construction, this figure will increase to 49%. It is obvious that even after the construction of all projects there will still be a huge hydro potential in Turkey. Besides, Turkey is a poor country in terms of fossil fuels (oil, natural gas, coal and so on) and has no nuclear power plant in operation, which strengthens the role of hydro energy among other alternatives.

What problem does it examine?

How Turkey can use its hydropower potential to meet fast-growing electricity demand in a sustainable way.

What is the main finding?

Turkey has the second-largest economic hydropower potential in Europe (140 TWh a year) but uses only 35% of it; even with plants under construction the share would reach just 49%.

Why does it matter for policy?

For a country poor in fossil fuels and, at the time of writing, without an operating nuclear plant, it underlines the strategic role of hydropower for supply security and sustainability.

Restrictions on CO2 emissions, the nuclear phase-out announced by some member states, high emissions from coal-fired power plants, and barriers to rapid development of renewable generation are factors that make the European Union (EU) highly dependent on natural gas. With three non-EU countries (Russia, Algeria and Norway) currently supplying more than half the gas consumed within the EU and with projections pointing out that by 2030 internal sources will only be able to meet 25% of demand, the EU desperately looks for means to secure new sources of gas supply. In this context, the Nabucco pipeline is planned to deliver gas from Caspian and Middle East regions to the EU market. It runs across Turkey and then through Bulgaria, Romania and Hungary before connecting with a major gas hub in Austria. On paper, Nabucco project makes perfect sense, offering a new export route to the EU markets for Caspian gas producers (Azerbaijan, Turkmenistan and Kazakhstan) as well as Iran and, in time, Iraq. The project is backed by the EU and strongly supported by the United States. Perhaps most importantly, Nabucco would completely bypass Russia. This paper addresses issues surrounding Nabucco project and their implications for the European gas security.

What problem does it examine?

The EU's growing dependence on natural gas and what the Nabucco pipeline, designed to bypass Russia, means for European gas security.

What is the main finding?

On paper Nabucco makes strong sense, offering Caspian and Middle Eastern producers a new export route to the EU that bypasses Russia entirely; the paper assesses the issues surrounding the project in this light.

Why does it matter for policy?

It highlights Turkey's critical position as a transit country in the EU's supply diversification strategy and the importance of route diversification for energy security.

In Turkey, natural gas consumption started at 0.5 bcm (billion cubic meters) in 1987 and reached approximately 35 bcm in 2007. Turkish natural gas usage is projected to further increase remarkably in coming years. In 2001, a reform process was started to create and strengthen a competitive natural gas market. However, the reform has not worked out as expected so far. The present article discusses the application of auctions in Turkish natural gas distribution zones. After presenting a short summary of current literature, natural gas utilization and recent developments in Turkish natural gas market, we draw attention to our main focus, namely city natural gas tenders. Having described the tenders, we present problems associated with them. In the end, we touch upon some regulatory issues and provide some suggestions for improvement.

What problem does it examine?

How the tenders for city gas distribution zones in Turkey work and how well they serve the goal of a competitive gas market.

What is the main finding?

The reform launched in 2001 has not worked out as expected, and the city gas tenders are associated with a number of problems.

Why does it matter for policy?

Its suggestions for improving distribution tenders and related regulation show how competition and consumer interests can be safeguarded in a fast-growing gas market.

The long-term increase in Earth's temperature is known as the global warming or the greenhouse effect. Taking into account the fact that the ice age only involved a global temperature variation of around 4 °C, it is clear climate change is arguably one of the greatest environmental threats the world is facing today. The impacts of disruptive change leading to catastrophic events such as storms, droughts, sea level rise and floods are already being felt across the world. In this context, the signing of the Kyoto Protocol in 1997 has been argued to be a historic step in reversing the inexorable increase in the emission of the greenhouse gases. The primary achievement of the Protocol has been so-called commitment of countries referred in the Annex I of the Protocol to reduce their emission of GHGs some 5% below their country specific 1990 level. On February 5, 2009, Turkish Parliament ratified an agreement to sign the Kyoto Protocol after intense pressure from both the European Union and international environmental organizations; however, so far it has not taken any step to bring about real reductions in emissions. In short, Turkey simply signed but ignored the Protocol. Present paper investigates Turkish position vis-à-vis Kyoto Protocol and critically questions Turkish policies in that area.

What problem does it examine?

Whether Turkey's accession to the Kyoto Protocol in 2009 reflected a real shift in climate policy or merely a formal step.

What is the main finding?

Turkey joined the Protocol under intense pressure from the EU and international environmental organizations but took no concrete step towards real emission cuts; in short, it signed but ignored the Protocol.

Why does it matter for policy?

It shows that international climate commitments need concrete, enforceable emission-reduction policies behind them to be credible.

On average, energy demand of Turkey is mounting by 8% annually, one of the highest rates in the world. Among primary energy sources, natural gas is the fastest growing one in Turkey. Gas consumption started at 0.5 bcm (billion cubic meters) in 1987 and reached approximately 35 bcm in 2007. Turkish natural gas usage is projected to further increase remarkably in coming years. The present paper focuses the characteristics of this demand and estimates short and long-run price and income elasticities of sectoral natural gas demand in Turkey. The future growth in this demand is also forecasted using an ARIMA modelling and the results are compared with official projections. The paper reveals that natural gas demand elasticities are quite low, meaning that consumers do not respond possible abusive price increases by decreasing their demand or substituting natural gas with other energy sources. Since consumers are prone to monopoly abuse by incumbent, there is a need for market regulation in Turkish natural gas market. Based on forecasts obtained, it is clear that the current official projections do not over/under-estimate natural gas demand although past official projections highly overestimated it.

What problem does it examine?

How responsive sectoral natural gas demand in Turkey is to prices and income, and how accurate official demand projections are.

What is the main finding?

Price and income elasticities of gas demand are quite low; ARIMA forecasts show that past official projections greatly overestimated demand, while those current at the time were on target.

Why does it matter for policy?

Because consumers cannot respond to price increases, market regulation is needed to prevent abuse of monopoly power by the incumbent.

Turkish electricity market law (EML) came into force in 2001 aiming at establishing a financially strong, stable, transparent and competitive electricity market based on bilateral contracts. Also, a balancing and settlement system (BSS) was put into practice in November 2004 to create a market where uncontracted generation can be traded, and actual implementation of the BSS started on August, 1st 2006 following a 21-month virtual implementation period. However, BSS has always been criticized from its beginning as transferring excessive profits to private generation companies. The present paper analyzes the implementation of BSS and argues that current BSS not only undermines the healthy development of the electricity market in Turkey but also prevents power investments due to uncertainties it created. It concludes that since the inconsistency between the objectives of EML and results of BSS in practice is obvious, Turkish policy makers need to modify current electricity market policy in line with suggestions presented in the paper.

What problem does it examine?

Whether the balancing and settlement system (BSS), fully implemented in 2006, is consistent with the Electricity Market Law's goals of a stable, transparent and competitive market.

What is the main finding?

The BSS transfers excessive profits to private generators, undermines the healthy development of the market and deters investment because of the uncertainty it creates.

Why does it matter for policy?

It argues that electricity market policy should be revised along the lines it proposes to close the gap between the law's objectives and practice.

Turkey is one of the countries with significant potential in geothermal energy. It is estimated that if Turkey utilizes all of her geothermal potential, she can meet 14% of her total energy need (heat and electricity) from geothermal sources. Therefore, today geothermal energy is an attractive option in Turkey to replace fossil fuels. Besides, increase in negative effects of fossil fuels on the environment has forced many countries, including Turkey, to use renewable energy sources. Also, Turkey is an energy importing country; more than two-thirds of her energy requirement is supplied by imports. In this context, geothermal energy appears to be one of the most efficient and effective solutions for sustainable energy development and environmental pollution prevention in Turkey. Since geothermal energy will be used more and more in the future, its current potential, usage, and assessment in Turkey is the focus of the present study. The paper not only presents a review of the potential and utilization of the geothermal energy in Turkey but also provides some guidelines for policy makers.

What problem does it examine?

How far Turkey, a heavily import-dependent country, uses its significant geothermal potential and how it could use it better.

What is the main finding?

If Turkey used all its geothermal potential it could meet about 14% of its total energy (heat and electricity) needs, making geothermal an attractive alternative to fossil fuels.

Why does it matter for policy?

For a country importing more than two-thirds of its energy, it shows geothermal's value for supply security and the environment, and offers guidance to policymakers.

Over the past decade or so, the electricity industry of the Republic of Turkey (and indeed the world) has undergone profound reform in its structure, ownership and mindset. Increasing public concern about efficiency in the sector has led Turkey to discard the traditional model of a vertically integrated industry subject to cost-based regulation in favor of the unbundling of activities and the introduction of competition where it is possible. The industry has been structurally separated into generation, transmission, distribution and retail segments. The competitive segments of the industry (generation and retail) are planed to progressively expose to competition; the monopoly segments (especially, distribution) are to be reoriented to foster competition. Further, the ownership of the industry is under increasing pressure to move away from the public domain into the private one. The present article not only presents an analysis of the Turkish distribution sector and proposed privatization process but also provides some guidelines for policy makers.

What problem does it examine?

The restructuring and planned privatization of Turkey's electricity distribution sector during the move from a vertically integrated industry to an unbundled, competitive model.

What is the main finding?

The industry has been unbundled into generation, transmission, distribution and retail; the competitive segments are to be opened gradually, while the distribution monopoly is to be reoriented to foster competition.

Why does it matter for policy?

It offers policymakers guidance for the restructuring and privatization of the distribution sector.

Increase in negative effects of fossil fuels on the environment has forced many countries, including Turkey, to use renewable energy sources. Today, clean, domestic and renewable energy is commonly accepted as the key for future life, not only for Turkey but also for the world. As wind energy is an alternative clean energy source compared to the fossil fuels that pollute the atmosphere, systems that convert wind energy to electricity have developed rapidly. Turkey is an energy importing country, more than half of the energy requirement has been supplied by imports. Turkey's domestic fossil fuel resources are extremely limited. In addition, Turkey's geographical location has several advantages for extensive use of wind power. In this context, renewable energy resources appear to be one of the most efficient and effective solutions for sustainable energy development and environmental pollution prevention in Turkey. Since wind energy will be used more and more in the future, its current potential, usage, and assessment in Turkey is the focus of the present study. The paper not only presents a review of the potential and utilization of the wind power in Turkey but also provides some guidelines for policy makers.

What problem does it examine?

Turkey's wind energy potential and how far it is used, given the country's limited domestic fossil resources and high import dependence.

What is the main finding?

Turkey's geography offers significant advantages for the wide use of wind power, and renewables are among the most effective solutions for sustainable energy development and pollution prevention.

Why does it matter for policy?

For a country importing over half of its energy, it underlines wind power's value for supply security and the environment, and offers guidance to policymakers.

Turkey is heavily dependent on expensive imported energy resources (oil, gas and coal) that place a big burden on the economy. Air pollution is also becoming a great environmental concern in the country. In this regard, renewable energy resources appear to be one of the most efficient and effective solutions for clean and sustainable energy development in Turkey. Turkey's renewable sources are the second largest source for energy production after coal. About two-thirds of the renewable energy produced is obtained from bioenergy, which is used to meet a variety of energy needs, including generating electricity, heating homes, fueling vehicles and providing process heat for industrial facilities. The amount of usable bioenergy potential of Turkey is approximately 17 Mtoe. This article not only presents a review of the potential and utilization of the bioenergy in Turkey but also provides some guidelines for policy makers.

What problem does it examine?

The potential and use of bioenergy in Turkey, a country dependent on expensive energy imports and facing growing air pollution.

What is the main finding?

Renewables are Turkey's second-largest energy source after coal, about two-thirds of renewable energy comes from bioenergy, and usable bioenergy potential is around 17 Mtoe.

Why does it matter for policy?

It shows bioenergy's potential role in reducing import dependence and air pollution, and offers guidance to policymakers.

For many decades, like many developed countries, Turkey has controlled her electricity sector as a state-owned monopoly. However, faced with rapid electricity demand growth, Turkey started to consider nuclear option. The present paper aims at evaluating both the present status of nuclear power in general and its implications for Turkish energy market in particular. After examining existing nuclear power technology and providing a brief overview of nuclear power economics; it focuses on the repercussions of nuclear power for Turkish energy market. The paper concludes that, in the short run, it may be considered to keep nuclear power within Turkish energy mix because it is an important carbon-free source of power that can potentially make a significant contribution to both Turkey's future electricity supply and efforts to strengthen Turkey's security of supply. However, in the long term, nuclear power should be retained in Turkey only if it has a lower cost than competing technologies.

What problem does it examine?

Whether nuclear power makes sense as an option for Turkey, facing rapid demand growth while opening up its energy market.

What is the main finding?

In the short run nuclear power may be kept in the mix as a carbon-free source that supports supply and security of supply; in the long run it should be retained only if it is cheaper than competing technologies.

Why does it matter for policy?

By stressing that, in open markets, nuclear decisions should ultimately rest on cost competitiveness, it offers a balanced framework for energy planning.

In the early 2000s, the Republic of Turkey has initiated an ambitious reform program in her electricity market, which requires privatization, liberalization as well as a radical restructuring. The most controversial reason behind, or justification for, recent reforms has been the rapid electricity demand growth; that is to say, the whole reform process has been a part of the endeavors to avoid the so-called "energy crisis". Using cointegration analysis and autoregressive integrated moving average (ARIMA) modelling, the present article focuses on this issue by both providing an electricity demand estimation and forecast, and comparing the results with official projections. The study concludes, first, that consumers' respond to price and income changes is quite limited and therefore there is a need for economic regulation in Turkish electricity market; and second, that the current official electricity demand projections highly overestimate the electricity demand, which may endanger the development of both a coherent energy policy in general and a healthy electricity market in particular.

What problem does it examine?

How realistic the rapid demand growth used to justify Turkey's electricity reforms, and the official demand projections behind it, really were.

What is the main finding?

Consumers respond very little to price and income changes, and official projections substantially overestimate electricity demand.

Why does it matter for policy?

Price-insensitive demand calls for economic regulation, while inflated projections risk misguided investment and policy decisions that undermine a coherent energy policy.

The Republic of Turkey has initiated an ambitious reform program in the most important segments of her energy market; which requires privatization, liberalization as well as a radical restructuring of these industries. However, there is no consensus that the measures introduced are optimal. The present article attempts, first, to evaluate the regulatory framework created by the laws of 2001 in terms of economic efficiency considerations; and second, to determine what still needs to be done to improve the current situation. The paper not only provides an analysis of these reforms but also lists some policy suggestions. The study concludes that despite relatively good legislative framework, in practice, the reforms in Turkey are far from ideal as they are mainly in the form of "textbook reforms"; and therefore a significant amount of work still lies ahead of Turkey to set up a fully fledged energy market.

What problem does it examine?

How adequate, in terms of economic efficiency, the regulatory framework created by Turkey's 2001 energy market laws is.

What is the main finding?

Despite a relatively good legislative framework, the reforms have remained largely "textbook reforms" in practice and are far from ideal.

Why does it matter for policy?

It shows that legislation alone is not enough and sets out the practical steps needed for a fully fledged energy market.

This study explores the multifaceted influences on academic achievement using the PISA 2022 dataset, offering unprecedented insights into global educational systems. Anchored in theories like Bronfenbrenner’s ecological systems theory and Bourdieu’s concepts of cultural capital, the research examines how home environments, school-level variables, and systemic factors converge to shape student outcomes. Noteworthy findings include the strong positive impact of access to educational resources such as science books, coupled with the negative effects of food insecurity and adverse school climates. Strikingly, teacher hiring autonomy and salary determination emerged as significant predictors of enhanced student performance, whereas external evaluations were negatively associated with outcomes, challenging conventional assumptions. This paper uniquely leverages the richness of the PISA 2022 dataset to operationalise theoretical constructs across diverse socio-political contexts, addressing critical gaps in global educational research. Methodologically, it employs advanced econometric modelling to disentangle the roles of systemic advantages like OECD membership and GDP per capita from more localised influences, such as teacher-student relationships and school governance. Unexpected results, such as the counterintuitive relationship between family income and academic performance, underscore the complexity of educational dynamics. By situating these findings within broader debates on equity and inclusion, the study aligns with the pressing need for actionable insights to inform policy and practice. Its emphasis on critical enquiry and social justice offers valuable implications for educators, researchers, and policymakers aiming to foster equitable and effective educational systems worldwide. This work advances the understanding of what drives academic success and highlights pathways for meaningful intervention.

What problem does it examine?

How home environments, school-level variables and system-level factors jointly shape student achievement in the PISA 2022 data.

What is the main finding?

Access to resources such as science books strongly raises achievement, while food insecurity and adverse school climates lower it; teacher hiring autonomy and salary determination are positively, and external evaluations negatively, associated with performance.

Why does it matter for policy?

It suggests that equitable and effective education systems require looking beyond rankings to resource access, student well-being (such as food security), school climate and school governance.

The attitude towards ICT determines the amount of incentive for practicing with it, which may directly affect ICT literacy. So, students’ attitude inter alia is one of the substantial building blocks of ICT literacy, which in turn is an important component of improved student achievement brought about by it. This paper is devoted to exploring the determinants of students’ attitudes towards ICT. On recognizing the complexity of integration of ICT into education systems and unlike previous research that has largely focused on the idea that student’s learning engagement can be boosted through the availability and use of ICT alone, this paper acknowledges that integrating ICT into education is a complex process and the link between supplying ICT resources and enhanced student attainment is far from straightforward. Using rich PISA 2018 survey data from N = 129,724 students in 47 countries/economies, the results from this paper indicate that girls have better attitudes towards ICT than boys; students in private schools have more interest in ICT than those in public ones; students using ICT outside of school for leisure have a higher level of interest; and students with higher levels of fear of failure are more interested in ICT.

What problem does it examine?

What determines students' attitudes towards ICT, and whether simply supplying ICT resources is enough to raise attainment.

What is the main finding?

PISA 2018 data on 129,724 students in 47 countries and economies show more positive attitudes towards ICT among girls, private-school students, students who use ICT for leisure outside school and those with a higher fear of failure.

Why does it matter for policy?

It shows that ICT investment should go beyond supplying hardware and connectivity and be backed by holistic integration policies that take students' attitudes and patterns of use into account.

This paper utilizes OECD's original PISA 2012 dataset to investigate the impact of access to ICT, student background and school/home environment on academic performance of students. Using cross-section data from 4848 15-year-old students in Turkey, ordered logit models are developed and analyzed. The results indicate that (i) availability of internet connection at home or school and student's possession of his/her own room at home have positive impacts on academic success, (ii) internet connection at schools may not be used for school-related activities and therefore distracts student's attention from schoolwork, (iii) as student-per-teacher ratio or school size increases, the academic success of students declines, (iv) pre-primary education and education in student's native language contribute to academic achievement, (v) there is a positive relationship between education level of parents and student's performance at school. Using additional data from 22,273 students, the paper also presents an international analysis that compares the results from Turkey with those from Germany, France and the United Kingdom. Finally, the urgent need for collection of micro level (at student, school or parent level) data on Turkish education system is underlined.

What problem does it examine?

How access to ICT, student background and school/home environment affect the academic success of students in Turkey.

What is the main finding?

Internet access, having one's own room, pre-primary education, schooling in the native language and parents' education are positively related to success; larger student-teacher ratios and school sizes lower it, and internet at school may distract students when it is not used for schoolwork.

Why does it matter for policy?

It points to the value of expanding pre-primary education, lowering student-teacher ratios and steering school ICT use towards learning, and stresses the urgent need for micro-level data on the Turkish education system.

Located between the natural gas-rich countries of Asia and Middle East on one hand and European countries with rapidly increasing demand for natural gas on the other hand, Turkey is situated at a geography where natural gas demand and supply intersect. With annual average gas demand growth rate of 10.4% during the last decade and a consumption of more than 32 billion m³ in 2009 (which was just 12.5 billion m³ in 1999), Turkey gradually turns out to be an important gas market in its own right. This trend is reinforced by the fact that Turkish natural gas consumption is projected to further increase remarkably in coming years. To transform Turkish gas market into a competitive one and to make sure that it develops in the lines of the European Union (EU), a reform process was initiated in 2001, which involves privatization, liberalization, as well as a radical restructuring of gas industry in Turkey. This chapter focuses on the reform process. First of all, the chapter provides a short summary of the developments taking place in the Turkish gas market since 1980s. Then it attempts to evaluate the regulatory framework created as a result of the reform process. The following subsections are devoted to two important issues in Turkish gas market, namely, Turkish gas release program and the auctions in gas distribution market. Another subsection deals with the issue of compatibility between Turkish reforms and EU norms. In the last part, the chapter touches upon some regulatory issues and provides some policy guidelines for both improvement and filling what is called the expectations-capabilities gap in Turkish natural gas market. The chapter concludes that in spite of relatively good legislative framework and some encouraging developments in practice, the reforms in Turkey are far from ideal and a significant amount of work still lies ahead of Turkey to set up a full fledged liberal natural gas market.

What problem does it examine?

How successful the natural gas reforms launched in 2001 have been in creating a competitive, EU-compatible gas market in Turkey, including the gas release programme and distribution tenders.

What is the main finding?

Despite a relatively good legal framework and some encouraging developments in practice, the reforms are far from ideal: an expectations-capabilities gap remains and much work is still needed for a fully liberal gas market.

Why does it matter for policy?

Its policy guidelines for improving the regulatory framework and closing the expectations-capabilities gap map out the road to a fully liberal gas market.

This article presents Turkey-Europe relations starting with the 19th century up to the present day with a view to understanding the developments that shaped current EU policies toward Turkey. It also pays special attention to the Turkey-EU Customs Union Decision. After making an overall assessment, the author makes some suggestions concerning Turkey’s future relations with the EU. The article concludes that despite strong Turkish desire to join the EU, potentially Turkey is the last country in Europe to expect membership in the EU due to economic, political and, especially, cultural reasons.

What problem does it examine?

How Turkey–Europe relations from the 19th century onwards have shaped current EU policies towards Turkey.

What is the main finding?

Despite Turkey's strong desire to join, economic, political and especially cultural factors may make it the last country in Europe to expect EU membership.

Why does it matter for policy?

Drawing also on the Customs Union experience, it offers suggestions for a realistic approach to Turkey's future relations with the EU.