Analyzing the role of nuclear energy in the nexus of economic growth and environmental pollution in Belgium? evidence from wavelet coherence method

Abstract

The energy policy of Belgium has undertaken the ambitious agenda to phase out the nuclear sites by 2025 due to various threats associated with nuclear reactors. However, it embarks on the policy question of whether transitioning to non-nuclear renewable energy sources can meet the energy aspirations and ensure the energy supply while keeping the environmental targets achievable. Therefore, it is prudent to explore the nexus between economic growth, nuclear energy consumption, trade openness and environmental degradation in Belgium. To this end, the study employed time series data spanning from 1976 to 2019 and the EKC. To explore the short-run and long-run impact, ARDL, FMOLS, DOLS and CCR techniques are used. Furthermore, wavelet coherence techniques have been employed to explore the visual depiction of the association between the variables in the time-frequency domain. The empirical results provide strong evidence of the existence of a U-shaped EKC for Belgium. Trade is also found to have an inverted U-shaped association with CO2 emissions. Nuclear energy consumption has an insignificant impact on CO₂ emissions that upholds the government of Belgium’s present policy preference of phase-out nuclear energy capacity by 2025. This article suggests two serious policy dilemmas of economic expansion versus environmental degradation and non-nuclear renewable penetration versus nuclear phase-out.