Regime-Dependent Dynamics of Nuclear and Coal Energy in High-Income Economies: Evidence from a Markov Switching Analysis

İsmail Onur Baycan^*Mevsim Erdogdu

• Anadolu University, Eskişehir, Türkiye

Nuclear energy remains a key low-carbon source in high-income economies, whereas coal continues to account for a substantial share of greenhouse-gas emissions. This study examines the regime-dependent behaviour of per-capita nuclear and coal energy production from 1965 to 2023 using a Hidden Markov Model (HMM) framework. The nonlinear model identifies structural breaks, volatility shifts and persistent production regimes, estimated through the Expectation–Maximisation algorithm and smoothed state probabilities. The results reveal strong persistence in the medium-and high-production regimes of nuclear energy, while coal exhibits a gradual yet sustained transition from high toward low regimes, consistent with long-term decarbonisation efforts. These findings highlight asymmetric production dynamics, reflecting technological, regulatory and policy developments. From a policy standpoint, the analysis provides descriptive-rather than causal-evidence showing that stable nuclear production regimes align with long-term decarbonisation pathways, whereas persistent coal regimes indicate structural inertia. The study underscores the importance of combining nuclear investment, safety improvements and technology development with coal-phase-out policies and clean-energy transitions. By documenting long-horizon regime dynamics, this research contributes to the environmental-economics literature and offers a data-driven perspective on energy-transition patterns in high-income economies.