1. Introduction
Industry 4.0 is critical in improving the production processes of various industries, including the oil and gas industry. Thanks to the adoption of Industry 4.0 technology, which has resulted in the optimization and enhanced performance of the manufacturing industry, there has been a significant movement from traditional manufacturing enterprises to smart factories [
1,
2]. Industry 4.0 refers to modern technology, including cyber-physical systems, the Internet of things (IoT), big data, the cloud, automation, cybersecurity, and artificial intelligence. Furthermore, IoT, cloud, big data, and analytics were designated as the four foundation technologies of Industry 4.0 in [
3,
4,
5]. Big data and analytics are essential enablers for advanced applications of Industry 4.0, while cloud services offer simple access to information and services, and IoT addresses communication problems. To this end, advanced technologies have addressed some of the industry’s top concerns, including supply chain resilience, exploration, analysis, safety, and sustainability. In real terms, the oil and gas supply chain has already undergone positive adjustments.
While some sectors are transforming under the influence of Industry 4.0, the need for energy consumption is increasing. Under the influence of Industry 4.0, there has been a gradual increase in natural gas consumption, especially since the beginning of 2000. The main reasons for the increase in natural gas consumption are that it is an essential source of electricity production and the most crucial energy input of the industrial sector, with an increase in individual consumption. In this process, analysis methods that use large data groups have just started to be used in production to increase the quality of production and impact energy consumption. Energy consumption is one of the leading causes of environmental pollution, a critical problem for our world. Compared to the average temperature between 1850 and 1900, global surface temperatures increased by 1.09 °C over the past 10 years (2011–2020) [
6]. Around the world, there was a rise of 1.59 °C. Global temperatures are expected to rise by 1.5 °C or more in the next 20 years due to GHG emissions, which have caused an average warming of ~1.1 °C since the 1850–1900 period. The hazardous limit of 2 °C must not be surpassed to safeguard populations and ecosystems from the overwhelming effects of climate change. Hence, restricting global temperature increases to 1.5 °C is crucial for the same reason [
6].
In the era of Industry 4.0, governments are concerned about reducing energy use, lessening CO
2 emissions, and saving money to improve energy efficiency and limiting disruptions caused by I4.0 technologies. These issues also deal with how to evaluate and select the appropriate energy technology in accordance with sustainability principles [
7]. The International Energy Agency (IEA) estimates that the widespread use of current digital technology may reduce production costs in the oil and gas industry by 10% to 20%. In this respect, businesses are spending more on applications that may benefit from digital technology, such as inventory management and logistics. Among the applications taking off in the oil and gas industry are digital process optimization and predictive maintenance for equipment.
The influence of the Fourth Industrial Revolution on energy is mainly unknown (for example, lack of access to energy), while it presents several chances for sustainability (addressing social, economic, and environmental concerns) [
8]. Hence, Industry 4.0 has created a situation where businesses must make wise judgments to maintain an advantage over the competition [
9]. The same can be true for the environment and energy consumption. Environmental pollution is a major problem and, in the era of Industry 4.0, their bidirectional impact should be assessed. Some studies have analyzed the relationship between energy consumption and Industry 4.0, whereas, in this study, we focus on natural gas consumption and its relationship with the environment, enabling the dimensions of environmental pollution, as well as policies to reduce it, to be intensively discussed.
A mentioned above, some papers discussed the relationship between the energy sector and Industry 4.0. In line with the Industry 4.0 era, Lu et al. [
10] evaluated the leading technologies and application scenarios of the oil and gas (O&G) industry, assessed the benefits and challenges of implementation, and offered strategies and policies to support the sector’s adoption of Industry 4.0. The authors of [
11,
12,
13] also presented vital studies for the O&G industry. Onyeme and Liyanage [
14] investigated the Industry 4.0 (I4.0) maturity models (MMs) that are currently accessible for manufacturing sectors and investigated how well they were implemented in the oil and gas (O&G) upstream sector. The authors of [
15] highlighted IoT implementation conflicts among countries, while adaptation issues for I4.0 technologies, such as cloud computing and robotics implementations, were highlighted by [
16]. Raj et al. [
17] explored the obstacles to adopting I4.0 technology. Among these impediments, Breunig et al. [
18] cited the high R&D expenses of I4.0. Jasiulewicz-Kaczmarek et al. [
19] analyzed Industry 4.0 technologies for sustainable asset lifecycle management. Recently, Chauhan et al. [
20] demonstrated digitalization’s inherent and extrinsic constraints in the context of I4.0. In addition to the problems listed above, the effects of I4.0 on the sustainability of production and the environment are being questioned. According to Lin et al. [
21], the technologies launched under the notion of I4.0 necessitate an innovation strategy followed by businesses and governments focusing on environmental issues. Blockchain technology is one of the technologies created as part of the I4.0 development. Nonetheless, cryptocurrency technology is regarded as the most significant technological innovation in the context of financial technologies within I4.0 [
22]. However, the environmental effects of blockchain technologies, in addition to other I4.0 technologies, are expected to put pressure on the environment.
Kluczek et al. [
23] examined how Industry 4.0 places demands on business owners to make energy-efficient decisions in order to compete in the market. This study introduced prospect theory (PT) for decision making in Industry 4.0 to choose the best energy technology. Bildirici and Ersin [
2] employed internet and communications technology (ICT) exports, research and development (R&D), artificial intelligence (AI), ICT technology patents, and Bitcoin as proxies for Industry 4.0. However, these variables could only be obtained after 2000. The period of 2000–2021 can be considered short when using annual data. For this reason, we use technology patents as a proxy variable for Industry 4.0. On the other hand, various studies [
24,
25] have highlighted the inclined energy consumption due to I4.0 technologies, in addition to Bitcoin mining activities which significantly burden the environment.
On the other hand, some papers analyzed the relationship linking natural gas consumption, economic growth, and environmental pollution. The initial literature collection was a time series data investigation [
26,
27,
28,
29]. The second, more condensed body of literature used panel data model analysis as its foundation [
29,
30,
31,
32,
33,
34,
35,
36,
37]. Later, Zamani [
38] used the vector error correction model (VECM), Hu et al. [
39] applied cointegration and causality for the United States (US), and the authors of [
40] investigated Taiwan. They found a long-term relation between natural gas consumption (NGC) and economic development. Furthermore, some papers found a unidirectional causality between NGC and economic growth in multiple nations, including [
41,
42] for the US, [
43] for the Soviet Union, [
44] for Nigeria, [
45] for Iran, [
46] for the United Kingdom (UK), US, and Poland, [
32] for New Zealand and Australia, [
31] for Pakistan, Bangladesh, Nepal, India, and Sri Lanka, and [
47] for Pakistan. Considering the studies conducted after 2020, according to [
48], Nigeria’s economic growth was boosted by using natural gas. Additionally, the authors used nonlinear estimate methods to support this assertion and concluded that the relationship between natural gas consumption and economic development is nonlinear. Awodumi and Adewuyi [
49] discovered that increasing Gabon’s natural gas use effectively boosted economic growth and reduced environmental pollution. However, they asserted that natural gas usage in Nigeria had effects that slowed growth. According to Etokakpan [
50], economic growth and natural gas consumption are both impacted by one another; as a result, a feedback connection was established. In the context of the top CO
2-emitting global economies, Azam et al. [
51] could not show any causality relationship between natural gas use and economic development.
However, these papers did not analyze cointegration and causality among Industry 4.0, natural gas consumption, economic growth, and environmental pollution for Turkey. This paper aimed to analyze the causality among economic growth, natural gas consumption, and environmental pollution, and Industry 4.0 using Markov switching VAR (MS-VAR), MS-Granger causality (MS-GC), Fourier VAR (FVAR), and Fourier Granger causality (FGC) techniques from 1988 to 2022 in Turkey. The reason for covering the period starting with 1988 is its recognition as the beginning of the Industry 4.0 era with AutoIDLab in 1988. The MS-VAR method can provide us with information about the stages of fluctuations because when economic growth is used as variable, fluctuations should be taken into account. The stage of the business cycle must be considered when analyzing the evidence of the GDP variable; otherwise, estimated parameters could be inaccurate. Some articles used the Markov switching (MS) approach to solve this issue in the context of GDP and oil price variables. The first paper that used the MS approach to evaluate oil price volatility was [
52]. Later, MS-AR and MS-VAR models were used by [
53,
54,
55,
56,
57,
58] to examine the effects of energy prices on macroeconomic variables and/or to establish the relationship between energy consumption and economic growth. However, since the period was short, we also used the Fourier VAR and F-GC methods. On the other hand, the Fourier approach allows investigating nonlinear series or series with structural breaks with unknown forms and break dates. The simultaneous use of these methods is expected to provide an opportunity to make effective policy recommendations.
Our expectation is that, if the results in the MS-GC method differ between regimes, the results in the FGC method should be similar to those in one of the regimes. In this case, the policy recommendation will be based on the regime stages and the general interpretation. If the results are completely different, no policy recommendation will be made.
5. Discussion
In this paper, the importance of natural gas consumption in the Industry 4.0 process and the impact of Industry 4.0 on environmental pollution in the Industry 4.0 period were evaluated using the MS-VAR, MS-GC and FVAR, FGC methods. Unlike the studies in the literature, these methods gave us information both about the direction of causality and about the signs of the coefficients of the variables. The results showed that the selected methods are important to analyze natural gas, which plays an important role in reducing environmental pollution in Industry 4.0 processes. The importance of the MS-VAR method for policy recommendations revealed by our results is similar to the results obtained in the studies conducted by [
17,
18,
20] and the importance of the FVAR and FGC methods is similar to the results obtained by [
2].
Both MS-VAR and FVAR methods showed that the sign of coefficient of natural gas on environmental pollution was negative at lag(−2). This result was found for the two regimes of the MS-VAR method and the FVAR method. In the same way, the Industry 4.0 variable, symbolized by the variable dltp, may also have a mitigating effect on environmental pollution. However, this situation was only valid for lag(−2) in the FVAR method and in the second regime of the MSVAR model. In the first regime and for lag(−1) in regime 2, and lag(−1) in the FVAR the sign was positive.
When the effect of economic growth on environmental pollution was analyzed, the MS-VAR model showed a coefficient with a negative sign in lag(−1) in reg1 in lag(−1) and lag(−2) in reg2, but a coefficient with a positive sign in lag(−2) in reg1 and lag(−1) in the FVAR. The coefficients and signs between economic growth and the environment were similar to those found by many studies in the literature. In the natural gas equation, when the coefficients and signs between Industry 4.0 and natural gas consumption were analyzed, the coefficient of the sign for lag(−1) in the FVAR model was positive while lag(−2) was statistically insignificant. In the MSVAR model, the signs of the coefficients were positive in both regime 1 and regime 2. Industry 4.0 increases natural gas consumption. When the effect of natural gas on carbon dioxide was analyzed, the negative sign of the coefficient for lag(2) in all models revealed the importance of natural gas consumption in the Industry 4.0 period.
The causality results have important implications in terms of policy recommendations. We compare the findings of the two models in
Table 6. Since the results were generally the same in both models, we could easily use the causality results for policy recommendation.
When the causality results in the context of natural gas consumption and environmental pollution were compared, the causality direction for the results in the first regime of the MS-GC model was different from that in the second regime and Fourier causality (FGC). In the second regime of the MS-GC model and in FGC model, a bidirectional causality result was determined, whereas unidirectional causality from GC to environmental pollution was found for the first regime in the MS-GC model. In the MS-GC model, unidirectional causality from Industry 4.0 to environmental pollution was found in both regimes and the FGC model. Industry 4.0 was the Granger cause of environmental pollution. In the context of the coefficient signs of the variables, the negative sign of the variables at lag(−2) in regime 2 and in FVAR model showed the positive impact of tp on environmental pollution. Industry 4.0 was also a variable with positive effects on economic growth at lag(−1) in all models. The evidence of bi-directional causality among the variables was found between the variables in both regimes in the MS-GC model and FGC model. Industry 4.0 was an important variable in both environmental pollution and economic growth.
Similar results were highlighted in [
1,
2], who found that technology 4.0 had significant impacts on the environment. On the other hand, in the context of the relationship between natural gas and economic growth, similar results have been highlighted in the literature. Indeed, the authors of [
49] discovered that increasing Gabon’s natural gas use effectively boosted economic growth and reduced environmental pollution. The authors [
33,
36,
37,
50] determined the evidence of causality between economic growth and natural gas consumption.
Natural gas can have positive effects on economic growth, as well as positive effects on the environment. Similar to our results, some papers determined the positive effects of natural gas consumption on environmental pollution. Kuang and Lin [
61] found an emission reduction effect of natural gas consumption on environmental pollution. Natural gas is a vital fossil energy in the fight against air pollution as it is the least harmful fossil fuel to the environment. Our results differed slightly from the literature. Sign of coefficient of carbon dioxide emissions in lag(−1) was determined to be positive and negative for lag(−2). So, for the results in lag(−2), our results support the above judgment. Natural gas can have positive effects on economic growth, as well as positive and negative effects on the environment. Since natural gas is the most critical energy input of the industrial sector, it is an important energy source that meets the heating needs.
Moreover, bidirectional causality between Industry 4.0 and natural gas was found in both models and in both regimes in the MS-GC model. As a result of the interaction between energy technology and the adoption of I4.0, it is possible to improve the organization and quality of manufacturing processes to support the transition from a traditional production facility to one that uses extensive IT while still achieving both high manufacturing efficiency and sustainability (recovering energy, a precise measurement of energy use, etc.). At this point, ensuring supply security is of great importance.
The findings make it abundantly evident to governments and policymakers that the I4.0 shift has significantly supported environmental sustainability. As a result, governments need to increase their efforts to reduce the harmful impacts of economic output, energy use, and I4.0.