Stringent environmental policies: How they shape the future of nuclear energy generation

Abstract

Nuclear energy is a low-carbon energy source that can replace fossil fuels in the energy mix. However, the serious risks associated with nuclear energy generation must be effectively managed. Environmental policy stringency can counter these risks by compelling the polluted firms and industries to switch to clean energy sources, thereby enhancing the production of alternative and clean energy sources, including nuclear energy. Empirical evidence in this context is missing, confirming a gap in the nuclear energy literature. In order to plug this gap, this research examines how stringent environmental policies can enhance nuclear energy generation in the leading 18 nuclear energy-producing nations from 1995 to 2021. In order to examine the empirical connection between environmental policy and nuclear energy generation, we employ the CS-ARDL model. The results indicate that stringent environmental policies lead to a decline in long-term nuclear energy generation. Nonetheless, the environmental policy does not affect short-term nuclear energy generation. Moreover, environmental technology, financial advancement, and sustainable development significantly enhance long-term nuclear energy generation. In the short term, all these variables do not substantially affect nuclear energy generation except environmental technology, which improves nuclear energy generation. Given the significance of environmental policy stringency for nuclear energy production, we suggest that the government needs to implement strict environmental policies with a special focus on the energy sector.