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Nuclear Energy, Economic Growth and the Environment: Optimal policies in a model with endogenous technical change and environmental constraints

Thanasis Stengos () and Nikos Fatouros ()

No 2002, Working Papers from University of Guelph, Department of Economics and Finance

Abstract: We use a model of endogenous growth with vertical innovations in order to derive optimal energy policy under uncertainty. Innovation can be directed to dirty, green or nuclear technologies, which in turn can be used to produce different types of energy. We show that, nuclear energy usage is not only a necessary welfare maximizing condition but also a crucial determinant of economic growth in the long-run. In addition, we find no evidence supporting the Environmental Kuznets Curve hypothesis under optimal policy implementation. Lastly, empirical results based on a panel VAR specification suggest that increases in emissions are strongly persistent in the long-run. Thus, a worsening of environmental quality seems to create dynamics that lead to even higher levels of emissions in the future.

Keywords: Growth; Nuclear Energy; Innovation (search for similar items in EconPapers)
JEL-codes: O31 O44 Q42 Q55 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2020
New Economics Papers: this item is included in nep-ene, nep-env and nep-gro
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