Impact of Nuclear Energy Consumption on CO2 Emissions in South Korea: Evidence from Fourier Bootstrap ARDL Bound Test

Abstract

A global trend of rising non-renewable energy consumption is associated with an increase in CO2 emissions and a consequent acceleration of global warming. To mitigate global warming, there is a growing need for consumption based on renewable energy sources and nuclear energy. The Republic of Korea – South Korea has emerged as a global leader in both the production and consumption of nuclear power. This study examines the impact of nuclear energy consumption on CO2 emissions in South Korea within the framework of the Environmental Kuznets Curve hypothesis. The variables in the study consist of annual data from 1978 to 2022. First, the stationarity of the variables was tested using Augmented Dickey-Fuller (ADF) tests and Fourier ADF unit root tests with structural breaks, and all variables were found to be first-differenced stationary. In addition, causality between variables was examined using the Fourier Toda-Yamamoto causality test. For the first time in this context, the Fourier Bootstrap Autoregressive Distributed Lag (FARDL) Bound test was used to examine the cointegration relationship among the variables, and such a relationship was identified. The long-run estimation results of Fourier ARDL are as follows: I) The environmental Kuznets curve hypothesis is valid for South Korea. II) Nuclear energy consumption has a negative effect on CO2 emissions (a 1% increase in nuclear energy consumption leads to a 0.11% decrease in CO2 emissions in South Korea). III) Unidirectional causality was found from both CO2 emissions and nuclear energy consumption to economic growth. Aligned with the research outcomes, the study concludes by outlining a series of policy recommendations for South Korea.