Turkey should invest in more complex green products.

The research conducted by the Sustainable Economy and Finance Research Association (SEFiA) examines the predisposition of countries, especially Turkey, to a green economy and their potential for the future.

The Green economy and green complexity analysis aims to identify Turkey’s current production capabilities and calculate its distance to the production of alternative complex products.

The study offers a follow-up perspective to the report published last year by SEFiA: “Trade in Environmental Products Report: Environmental Products in the World and Turkey”, which analyzed trade trends in the world and Turkey with a particular focus on environmental products to minimise environmental damage. 

To become more competitive in the green economic transformation, Turkey needs a new structural formation in the automotive, iron/steel and cement sectors:

Turkey’s green exports are dominated by products for petrol and diesel engines. In the face of the acceleration for electrification in general and the replacement of diesel and gasoline vehicles with electric vehicles in the automotive sector, Turkey’s persistent state of placing petrol and diesel engines as main export goods poses a disruption to the country’s green economic transformation and related economic development. 

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On the other hand, the main parts of the top export goods are produced in iron/steel, cement and similar materials. The carbon-intense manufacturing of the top export goods would offer a challenge as the green goods enter the game with more competitive advantages during the transition game over time. Additionally, with the shifting from export goods towards the production of goods by domestic demand to accommodate the urgencies in the post-earthquake conjuncture of February 6 in Kahramanmaras, carbon-intensive sectors foresee the need for new capacity. Whilst any capacity-building efforts in these sectors, adopting increased energy efficiency and strengthened emission control are key components.

To achieve the green transformation, specialization in products with highly productive know-how seems to be a priority.

Bengisu Özenç, the Director of SEFiA: Turkey ranks 26th out of 226 countries in terms of future potential, and 19th in green goods sophistication. This is related to the products Turkey currently exports. Considering the global transformation, Turkey needs to specialize in areas that will serve the green economy in its future vision. Specializing in goods with high productive know-how and allocating a larger share to these goods in the export basket will move Turkey to higher ranks in this area.

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