The Effect of Renewable and Nuclear Energy on CO2 Emissions and Economic Growth in Selected EU Countries

In the paper we examine how renewable and nuclear energy consumption impact the economic growth and CO2 emissions using a four variables Vector Autoregression methodology (VAR) together with causality analysis, forecast error variance decomposition and impulse response function. We use a sample of three countries (France, Spain and Sweden) with different level of economic development and social structure but with a high level of nuclear or/and renewable energy consumption over the period 1970-2018). Our main finding is that renewable and nuclear energy decouples the economic growth from carbon emissions in France and Sweden (in contrast to Spain) what may suggest the policy aimed at reducing carbon emissions is effective, and that introduction of green energy sources contributes to it considerably. Additionally, we have found that renewables in Spain have the negative impact on nuclear energy consumption suggesting that renewable energy tends to squeeze out nuclear energy instead of fossil energy source. Hence, to mitigate climate changes in Spain, the RES support needs to be more markedly completed with changes to political-economic structures that effect fossil fuel use.