The Fukushima nuclear accident in Japan has renewed debates on the safety of nuclear power, possibly hurting the role of nuclear power in efforts to limit CO₂ emissions. I develop a dynamic economy-wide model of Taiwan with a detailed set of technology options in the power sector to examine the implications of adopting different carbon and nuclear power policies on CO₂ emissions and the economy. Without a carbon mitigation policy, limiting nuclear power has a small economic cost for Taiwan, but CO₂ emissions may increase by around 4.5% by 2050 when nuclear is replaced by fossil-based generation. With a low-carbon target of a 50% reduction from year 2000 levels by 2050, the costs of cutting CO₂ emissions are greatly reduced if both carbon sequestration and nuclear expansion were viable. This study finds that converting Taiwan's industrial structure into a less energy-intensive one is crucial to carry out the non-nuclear and low-carbon environment.