Is nuclear energy clean? Revisit of Environmental Kuznets Curve hypothesis in OECD countries

Abstract

A transition towards the adoption of clean energy sources in electricity generation is essential to reduce the emission of greenhouse gases. The present study aims to examine the EKC hypothesis by taking into account nuclear energy in 18 OECD countries for the period 1995–2015. This study employs panel dynamic Generalised Method of Moments (GMM) and panel Fully Modified Ordinary Least Squares (FMOLS) to investigate the effects of electricity production from nuclear source, electricity production from non-renewables and trade openness on CO2 emissions. The empirical findings suggest that EKC hypothesis is valid in OECD countries where nuclear energy plays a pivotal role in protecting the environment. On the contrary, non-renewable energy sources tend to increase CO2 emissions. Our results support the notion that electricity generated by nuclear source leads to lower CO2 emissions without retarding the long run growth in OECD countries. The findings also provide important policy insights and recommendations not only for OECD countries, but also for developing countries in designing appropriate energy and economic policies.