The asymmetric responses of income to changes in nuclear power generation and carbon dioxide emissions: A comparative G-6 analysis

Abstract

This study aims to evaluate the asymmetric nature and magnitude of clean nuclear energy consumption and carbon dioxide emissions impacts on economic growth prospects, stratifying by short- and long-term. This study is preliminary investigation that uses a single-country approach on a tri-variate framework, this study focuses on an illustrative case: G-6 economies, which are characterized by divergent nuclear energy planning and prospects, make a comparative nexus analysis more reliable than a panel. Hence, it employs the recently developed Nonlinear Autoregressive Distributed Lag (N-ARDL) model developed by (Abbas, 2022a), which accounts for asymmetries between variables and corrects for unobservable. Data span the largest and most available time period: 1970–2019; thought to supply the most accurate information for policy purposes. N-ARDL findings show the asymmetric impacts of nuclear energy consumption and CO2 emissions on income for all selected G-6 countries and both in the short- and long-term. Although triggering nuclear energy consumption in the total mix can enhance long-term economic growth prospects in Germany, Japan, and the United Kingdom, it does not show significant impacts for Canada, France, and the United States. Similarly, long-term parameters capturing a negative shock in nuclear energy demand generate significant negative income responses in Germany and the US, while positive coefficients are found in Canada and Japan. This study urges sampled countries to enhance production and supply of nuclear energy to reduce dependence on fossil fuel which is primary cause of global environmental hazard.