Impact of Renewable Energy Sources and Nuclear Energy on CO2 Emissions Reductions—The Case of the EU Countries

The aim of this work is to analyse the dependence of carbon dioxide (CO2) emissions on total energy consumption, the energy produced from renewable sources, the energy produced in nuclear power plants and the gross domestic product (GDP) in 22 European countries, over the period 1992–2019. The fully modified ordinary least squares model (FMOLS) and dynamic OLS (DOLS) were used to estimate the long-term cointegration relationship between the variables. First differenced (FD) general moments methods (GMM) were used in the estimation of short-run relationship dynamics. The results suggest that energy produced from renewable sources causes a reduction in CO2 emissions per capita. On the other hand, total energy consumption increases CO2 emissions in the long run. Although the mitigation effect of nuclear power was not found to be significant across the entire block of countries studied, a closer look at countries utilising nuclear energy reveals that nuclear energy positively affects the reduction in CO2 emissions. Economic growth also has a positive effect on the reduction in CO2 emissions, which confirms the decoupling of economic development from environmental impacts. These findings are crucial for understanding the causality between these variables and the adoption of new or revision of existing policies and strategies promoting the carbon-neutral and green economy at the EU and national level.