Analyzing the N-shaped EKC among top nuclear energy generating nations: A novel dynamic common correlated effects approach

Regardless of the ongoing debate, the shape of the Environmental Kuznets Curve (EKC) hypothesis plays a critical role in determining the dynamic relationship between environmental sustainability and economic activities across different nations of the world. It is widely accepted that with cleaner fuel options (i.e., nuclear and renewables), economic amelioration will have the least negative environmental externalities. Banking on this matter, it is anticipated that the top nuclear energy-producing nations might have obtained environmental sustainability amid the eye-catching incessant economic amelioration. In other words, we expect that there exists an inverted U-shaped EKC among these nuclear energy-rich nations. However, the hypothesis that an N-shaped EKC does not exist among these nations is yet to be scrutinized. To address this research gap, we have deployed annual time-series data from 1990 to 2018 and adopted the novel Dynamic Common Correlated Effects Approach. The results unearth that the N-shaped EKC hypothesis is valid in the case of the top nuclear energy-producing nations, revealing that the energy sector that is fueling the economic growth among these nations is still highly dependent on fossil-based sources. We also noted that nuclear energy generation ameliorates environmental quality among the designated countries. Additionally, the empirical results further delineate that military spending and human capital are negatively associated with ecological footprint among the selected nations, revealing that national security and education can help reshape, rebound and restore the biocapacity surplus among the designated countries. We propose that the chosen nations develop a more biased energy mix structure with more nuclear and renewable energy sources in the basket to keep the growth process untapped. By doing this, the N-shaped EKC can be avoided. Further policy insights have been made in the relevant section.