Energy vulnerability and international trade assessing Turkey’s energy vulnerability with a comparative outlook of the EU

Abstract

Energy trade has always been one of the major aspects of international trade for many countries. In order to ensure the continuity of their services, energy dependent countries are obliged to source their energy demand through imports. However, factors like increasing energy consumption, higher degrees of dependence to certain type of fuels, concentrated nature of the energy suppliers, excess reliance on expensive means of power generation, fluctuating energy prices, import bill and the carbon content of the primary energy supply designate the degree of a country’s vulnerability to energy as well as its preparedness to adverse energy related events. After offering a general outlook to global energy market, this study defines the indicators that contribute to energy vulnerability of a country and computes Turkey’s performance on each parameter. The comparison of Turkey’s standings with the performance of the EU indicates that Turkey performs relatively worse than the EU deeming the country more vulnerable to an energy crisis. However, the study suggests that Turkey has plentiful opportunities to reduce its energy vulnerability in case its energy politics are governed properly. In addition to its comparative advantage in renewable energy, in case correct and accurate energy investment decisions are made, Turkey’s energy vulnerability is ready to decline. The study comes with policy recommendations to shift energy vulnerability downward both at the governmental level and at the micro level.