An empirical investigation of the relationships between nuclear energy, economic growth, trade openness, fossil fuels, and carbon emissions in France: fresh evidence using asymmetric cointegration.

Abstract

The intention behind the current analysis is to join the debate over the main factors to consider in the global fight against climate change. Thereby, the Non-linear Autoregressive Distributed Lag (NARDL) approach is applied to assess the impacts of nuclear energy, fossil fuels, income, and trade on carbon emissions in France from 1980 to 2020. In addition, the relevance of the Environmental Kuznets Curve (EKC) presumption is tested. The main results stipulate that nuclear energy lessens CO2 emissions in France. However, fossil fuels and trade openness enhance these emissions. On the other hand, the current analysis confirms the presence of an inverted U-shaped curve relating economic growth to carbon emissions. Therefore, the EKC hypothesis is supported in our case. Indeed, by calculating the turning point, it is possible to extract the turning year corresponding to 2008. Furthermore, an asymmetric causality test is performed in order to identify the possible non-linear causal links between the potential drivers of carbon emissions. First, the causal linkage between CO2 emissions and GDP is bidirectional. Furthermore, a unidirectional causal link between CO2 emissions and non-renewable energies and a dual directional causal link between pollutant emissions and trade are identified. These empirical results are intended to guide the French government in the implementation of relevant energy and trade-related strategies in order to attain the ambitious targets of carbon emissions reduction. In fact, France should reduce imports of fossil fuels to curtail the positive effect of trade on carbon emissions. In addition, it is recommended to substitute fossil energies with renewable energies gradually by using adequate instruments and boosting research and innovation to mitigate the adverse influences of non-renewable energies on environmental quality. Finally, our findings confirm the positive role played by nuclear energy in the fight against climate change.