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Turkey Green Growth Policy Paper: Towards a Greener Economy

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Turkey Green Growth Policy Paper:

Towards a Greener Economy

The World Bank

Erectangle 96urope and Central Asia Region
©2013 The International Bank for Reconstruction and Development / THE WORLD BANK

1818 H Street, NW Washington, DC 20433, U.S.A.

Telephone: 202-473-1000. Internet: E-mail:
All rights reserved.
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.


Tstraight connector 468
his volume is a product of the staff of the International Bank for Reconstruction and Development / The World Bank. The findings, interpretations, and conclusions expressed in this paper do not necessarily reflect the views of the Executive Directors of The World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on maps in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of denoted boundaries.


The material in this publication is copyrighted. Copying and/or transmitting portions or all of this work without permission may be a violation of applicable law. The International Bank for Reconstruction and Development /

For permission to photocopy or reprint any part of this work, please send a request with complete information to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, USA, telephone 978-750-8400, fax 978-750-4470, All other queries on rights and licenses, including subsidiary rights, should be addressed to the Office of the Publisher, The World Bank, 1818 H Street NW, Washington, DC 20433, USA, fax 202-522-2422, e-mail

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

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