Facing the challenge of alternative energy sources: The scenario of European Union countries based on economic and environmental analysis

Abstract

This study evaluates the potential impacts of natural gas (NGC), renewable energy (RCC), and nuclear energy consumption (NCC) from an economic and environmental perspective for four European Union countries (Czechia, Finland, Hungary, and Germany), which have a reliance on Russia as well as use renewable and nuclear energy. In this context, quantile-based approaches are used; NGC, RCC, and NCC are considered as explanatory variables; and data between 1993/Q1 and 2021/Q4 is used. The findings show that (i) NGC has generally an accelerating impact on the economy and environment in all countries; (ii) RCC has a stimulating impact on the economy in Finland at all quantiles and in Czechia at higher quantiles. Also, it has a curbing impact on CO2 emissions in Czechia at all quantiles and in Hungary and Germany at the higher quantiles; (iii) NCC has an increasing impact on the economy in Hungary and Germany at higher quantiles. Besides, it has a limiting impact on CO2 emissions in Hungary at all quantiles, in Finland at higher quantiles, and in Czechia at middle quantiles; (iv) NGC, RCC, and NCC have a causal impact on both GDP and CO2 emissions. The outcomes imply that the impact of the alternatives on GDP and CO2 emissions varies by country, alternatives, and quantiles. RCC is the most suitable option for Czechia, NCC is the most suitable option for Hungary, and there is a trade-off for Finland and Germany.