On the income-nuclear energy-CO2 emissions nexus revisited

- We examine the income-nuclear energy-CO2 emissions nexus in top six nuclear generating countries.
- The model pays special attention to the possible endogeneity of income.
- Nuclear energy is found to have a beneficial effect on the environment in all countries.
- Income has a favorable effect on the environment only in some countries.
- CO2 emissions and income are indeed found to be determined simultaneously.

This paper seeks to contribute to the debate over the income-nuclear enery-CO2 emissions nexus by taking specific account of the possible endogeneity of income, which has been largely ignored by early studies. A multivariate cointegrated vector autoregression (CVAR) is applied to top six nuclear generating countries. We find that nuclear energy tends to reduce CO2 emission for all countries. It is also found that income has a beneficial effect on the environment only in some countries. Finally, we find that CO2 emissions and income are indeed determined simultaneously, while nuclear energy acts exogenously, indicating that nuclear energy is the driving variable, which significantly influences the long-run movements of CO2 emissions and income, but is not affected by CO2 emissions and income in the model.