Abstract The energy resources of the economies play a critical role in reaching the 2030 and 2050 decarbonization targets. In this respect, research and development budgets for nuclear energy (NRD), which constitutes one‐fifth of the current energy resources in the United Kingdom, can be a step in the transition to a low‐carbon economy. However, the current literature neglects the impact of NRD on environmental quality for the United Kingdom. Thus, this paper explores the impact of NRD on CO2 in the United Kingdom by controlling income, trade openness, and financial development from 1974 to 2020 with a non‐linear autoregressive distributed lag (NARDL) approach. Empirical findings confirm the asymmetrical relationship between NRD and CO2. In this context, while positive changes in NRD reduce environmental degradation, negative changes in NRD hinder environmental sustainability. Another finding is that the environmental Kuznets curve (EKC) hypothesis is valid. Furthermore, the results show that while economic growth and trade openness reduce environmental quality, financial development contributes to environmental quality. Considering these findings, financial deepening activities should continue in the United Kingdom. More resources should be allocated to nuclear energy research and development budgets in the transition to a low‐carbon economy.
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