Examining the Causal Linkages Between Nuclear Energy, Environment, and Economic Growth: An Application from the SAARC Economies

This essay examines the likelihood of a long-term relationship between nuclear energy and CO2 emissions as well as nuclear energy and per capita GDP. For this, we used a panel cointegration, panel FMOLS, and panel DOLS, as well as the panel Granger causality test on a sample of four SAARC countries (Bangladesh, India, Pakistan, and Sri Lanka) during the years 1980-2017. We identified unidirectional causation between nuclear energy and per capita GDP in the output equation. Long-term analysis, on the other hand, reveals feedback causation between nuclear energy and economic growth. The short-run results of the environmental equation reveal feedback causation between GDP and environmental pressure. Furthermore, the findings reveal one-way causation between nuclear energy and environmental pressure. Additionally, a long-term examination reveals feedback causation between environmental quality and wealth, as well as between nuclear energy and the environment. Given the constant structural changes, developing a proper trade-off between the advantages and costs of using nuclear energy to assure the economy's long-term growth and ecological well-being is a tough task.