Hydrogen and nuclear energy development in the shadow of climate policy uncertainty

Climate change has become a serious concern for global policymakers because it threatens environmental quality, energy security, and sustainable economic development. To tackle unpredictable climate change, policymakers around the globe are striving to enhance the share of renewable and low-carbon energy sources. Hydrogen and nuclear power are considered low-carbon energy solutions because they can support decarbonization, reduce greenhouse gas emissions, and strengthen long-term energy security. However, the development of these energy sources requires stable climate policies, long-term investment, and strong institutional support. Climate policy uncertainty may discourage investors, delay energy projects, and weaken the transition toward cleaner energy systems. The available empirical literature has not sufficiently shed light on the role of climate policy uncertainty in shaping nuclear and hydrogen energy. This analysis intends to plug this loophole in the literature by analyzing the impact of climate policy uncertainty on nuclear and hydrogen energy. The analysis utilizes the novel MMQR estimator, which confirms that climate policy uncertainty proves detrimental to the growth of nuclear energy production across all quantiles. In addition, climate policy uncertainty also hinders the growth of hydrogen energy, mainly at the lowest levels. Further, CO2 emissions boost nuclear energy and hydrogen energy development, while economic growth hinders them. The findings suggest that stable and clear climate policies are essential for promoting nuclear and hydrogen energy as reliable tools for achieving a low-carbon energy transition.