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April 2013
This report is the product of the World Bank Turkey Green Growth Technical Assistance Program. It was prepared by the Sustainable Development Department of the Europe and Central Asia Region of the World Bank.
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Table of Contents
Abbreviations and Acronyms iii
Acknowledgements iv
Executive Summary v
1. Introduction 13
1.1 Context and Background 13
1.2 Approach 14
1.3 Report Outline 15
2. Turkey’s Green Growth Challenges and Opportunities 17
2.1 Turkey’s economy and its recent performance 17
2.2 Opportunities for greening provided by Turkey’s growth path 18
Gross Domestic Product is an imperfect metric in reflecting living standards as they depend not only on the production level, but are closely related to the accumulation of wealth, which can be depreciated or depleted over time. Accumulated wealth can be decomposed into produced, natural and intangible capital. 22
3. Towards a Working Definition of Green Growth in Turkey 28
4. Strategic Sectors: Overview and Greening Potential 30
4.1 Overview 30
4.2 Automotive 31
4.3 Iron and Steel 33
4.4 Cement 34
4.5 Machinery Industry 35
4.6 White Goods 36
4.7 Agriculture 39
5. Green Growth Policies: Overview and Implications for Turkey 45
5.1 Green Policies in Turkey 45
5.2 A common agenda for green policies 45
5.3 A policy menu 46
5.4 Regulatory instruments 47
5.5 Market-based instruments (MBIs) 47
5.6 Information-based instruments 49
5.7 Matching policies with key constraints 50
5.8 Policies for key strategic sectors 51
6. Economy-wide Impacts of Greening Scenarios: A Pilot General Equilibrium Analysis 55
6.1 Introduction 55
6.2 Model structure and basic features 56
6.3 Environmental Pollution and Instruments of Abatement 58
6.4 Data 59
6.5 Policy Scenarios and Analysis 59
7. Conclusions and Recommendations 83
Annex 1: Description of the Algebraic Structure of the CGE Model 86
Annex 2: Description of the CGE Model Calibration and Base Path (2011-2030) 102
References 108
Abbreviations and Acronyms
BAT Best Available Technology
CGE Computable General Equilibrium
CO2 Carbon dioxide
CAP Common Agricultural Policy
CBA Cost Benefit Analysis
DPL Development Policy Loan
ECA Europe and Central Asia
EIA Environmental Impact Assessment
ERDF European Regional Development Fund
EU European Union
EIA Environmental Impact Assessment
ELV End-Of-Life Vehicle
ETS Emissions Trading System
FAO Food and Agriculture Organization
GGPP Green Growth Policy Paper
GDP Gross Domestic Product
HEPP Hydroelectric Power Plants
ICT Information and Communication Technologies
IPPC Integrated Pollution Prevention and Control
Kwh Kilowatt hour
MBIs Market-based Instruments
MoD Ministry of Development
NDP National Development Plan
OECD Organization of Economic Cooperation and Development
PH Porter Hypothesis
PM10 Particulate matter 10 microns in diameter
PPM Parts per million
PPP Purchasing Power Parity
REACH Regulation on Registration, Evaluation, Authorization and Restriction of Chemicals
R&D Research and Development
UNDP United Nations Development Programme
VOC Volatile Organic Compounds
WEEE Waste from electrical and electronic equipment