Do nuclear energy and renewable energy surge environmental quality in the United States? New insights from novel bootstrap Fourier Granger causality in quantiles approach

Abstract

With the expanding discussion over climate change mitigation, the shift to clean energy is a crucial challenge. The intricate structure of the nuclear energy-emissions nexus renders predicting whether nuclear acts as a green source of energy problematic. Hence, this study evaluates the effect of nuclear and renewable energy con-sumption on ecological quality proxied by carbon dioxide (CO2) emissions, ecological footprint (EF), and load capacity factor (LCF) by considering the role of financial development and economic growth. In this context, the United States (the US) is selected as the country example because of the leading position in nuclear energy production and consumption in the world; quarterly data from 1965/Q1 to 2018/Q4 is used; and novel Bootstrap Fourier Granger Causality in Quantile approach (Cheng et al., 2021) is applied. The main novelty of this approach is to examine the causality effect in a more detailed and flexible way. Whereas the traditional Granger test provides information about only conditional mean causality, this approach presents information about a tail causal relation or non-linear causalities. The empirical outcomes show that nuclear energy, renewable energy, and financial development lessen ecological deterioration in middle and higher tails while economic growth affects ecological quality negatively in higher quantiles. Thus, findings highlight governmental measures that favor nuclear energy transition and ecological sustainability to achieve and sustain a better environmental quality.