Nuclear Power Still equals hidden costs, uncertainty
by Freethinker Bob
"Another excellent example of flak came in 1995 when the Philip Morris and R.J. Reynolds Corporation sued ABC for investigations into nicotine manipulation in cigarettes. ABC had to subsequently apologize and fire the story's investigative journalists."
In the wake of the 1979 Three Mile Island and 1986 Chernobyl disasters, the enthusiasm to build nuclear power plants has fortunately proven to be little more than a hiccup—especially in the United States and Europe. The same goes for Asia, where the industry’s popularity dropped significantly in the wake of a market crisis there in 1998, and the deaths of two Japanese workers exposed to radiation in 1999.
Such externalities resulted in the scaling back of Asian nuclear plant production. Since the Bush Administration rolled-out its pro-nuclear power energy policy back in 2001, however, the industry has enjoyed somewhat of a boost. Many economic analysts now realize, however, that it will take marketing both the social and economic benefits to impact public demand for building more nuclear plants.
With the spread of deregulation in recent years, the electricity industry is no longer monopolized. The result has been an “increasing” competitiveness, due primarily to allowance of large mergers and joint-ventures. Inasmuch, the fifty plants today may be consolidating down to a dozen or so, further creating oligopoly-type competition. The benefit of these plant consolidations, meanwhile, advances widely-applied economies of scale (i.e. accomplished because as production increases, the cost of producing each additional unit falls) and supposedly more efficient use of the energy produced.
Advances in the nuclear industry’s technology, for instance, have already lead to a less expensive operating cost of 1.8 cents per kilowatt hour compared to coal (2.1 cents/Kwh) and natural gas (3.5 cents/Kwh) producers. Still, and for good reason, it’s anticipated to take more than highlighting only the individual economic benefits to sell Americans on more nuclear power plants.
Such oligopoly competition and technological advances in the nuclear industry are expected to result in the building of not just more, but larger plants—a reversal of trend for at least the past twenty years. Unfortunately, more and larger plants, many analysts contend, currently show the social costs (i.e. security, environmental impact) outweigh the benefits to consumers (i.e. cheaper power generated by nuclear plants). In the United States, this is especially true in the wake of 9/11 and fears about the ease of attacks on plants.
To sell America on more nuclear plants, therefore, will take advertising and thereby highlighting only their lacking output of air pollution—and avoiding their safety concerns—compared to that of competitors. Theoretically, the best way to do this is not by encouraging increased plant building by way of subsidizing the industry through production or investment tax credits. That is what the Bush Administration has pushed for, but it still won’t help sell nuclear on the grounds that it doesn’t contribute to the global warming (again, an externality) problem. Such is clearly already resulting in government failure.
To solidify both market and governmental success, and encourage and highlight a reduction of pollution while increasing the number of plants built, many suggest that the government should place a tax on polluting fossil fuel industries. In other words, an attempt to alter market incentives so as to discourage pollution output instead of the government using a command-and-control option.
As such, an emissions charge would negatively market impact the global warming-contributing coal and natural gas producers, because the tax costs would then be passed onto their consumers. In turn, competitiveness and demand for the nuclear-produced energy would increase because their estimated costs per kilowatt hour would be presumably less.
The anticipated end result: many people would demand the construction of more nuclear plants because of both their cheaper energy rates and also the marketed, engrained idea that it doesn’t contribute to air pollution, like coal and gas. Still, all of this comes without considering the real dangers and government costs (e.g. social costs and externalities) behind nuclear power, which exceed the optimal level of pollution.
Despite the nuclear industry-highlighted removal of one externality (air pollution), and the improvement in nuclear technology over the past twenty years, their societal costs via the very real potential for negatively impacting both human health and the environment still exists. The fact is radiation is dangerous at every production stage. Coupled with the fact that no company has ever developed a permanent nuclear waste site, market failure would occur whenever a company abandoned the disposal sites and then relied on the government to maintain it—similar to brownfields and Superfund sites out there today.
Furthermore, one can’t forget, that nuclear waste can remain radioactive for up to 100,000 years, and, as a result, taxpayers would end up subsidizing its maintenance and cleanup. In addition, nuclear plants currently have limited liability in the event of accidents, which means the government will help them clean up.
In these aforementioned occurrences, the cost-benefit to consumers and society would certainly not be realized. Under the Price-Anderson Act, too, nuclear producers’ liability in case of accident is already capped at roughly $10 billion dollars. Consequently, taxpayers would get “double-dipped”: paying for the energy they’ve used, on top of the cost of governmental clean-up and waste storage passed to them via taxes.
While the production of energy in a nuclear power plant profitably benefits the owners, it also creates brutal externalities in the form of radioactive waste for the environment and its inhabitants to cope with. Plus, government subsidies already account for roughly half of the industries’ financing, which, again, is an example of market failure—in other words, skimming off the public trough while providing a service that is not free to the public whose money it takes.
Overall, it is not just deregulation which has assisted the nuclear industry; it is the continued and unfortunate dependence on government subsidies and a intentional lack of acknowledgement about the potential and real costs to society—in specific terms of human health, environmental impact, long-term waste disposal and government expenditures, all resulting in increased taxes for consumers.
Despite the accolades of the Bush Administration for nuclear power, until such subsidies are eliminated, and the industry comes clean about the very real potential problems of nuclear energy generation, its growth will be rightfully stifled.