The Atlanta Fed's macroblog provides commentary and analysis on economic topics including monetary policy, macroeconomic developments, inflation, labor economics, and financial issues.
- BLS Handbook of Methods
- Bureau of Economic Analysis
- Bureau of Labor Statistics
- Congressional Budget Office
- Economic Data - FRED® II, St. Louis Fed
- Office of Management and Budget
- Statistics: Releases and Historical Data, Board of Governors
- U.S. Census Bureau Economic Programs
- White House Economic Statistics Briefing Room
May 02, 2005
Becker and Posner Debate The Nuclear Option To Our Energy Problem
Becker says the time has come.
The case against nuclear power plants is mainly based on three considerations. Fear of a serious nuclear accident, even worse than at Chernobyl, the risks in disposing and storing radioactive nuclear waste, and terrorist attacks on nuclear plants that might release large amounts of radioactive materials.
The chances of a serious accident at an American-approved nuclear plant is extremely low, given modern safety methods that are much better than even those at Three Mile Island, and new types of reactors that are safer still. The safety record is outstanding...
The second issue is the disposal of used fuel or waste from reactors since that waste is extremely radioactive. The options are either storage or reuse...
he Department of Energy has concluded that a facility could be built in the Yucca Mountains of Nevada that would be both safe and large enough to house an immense quantity of nuclear waste. Politics, not safety, is holding up the construction of this and equally safe alternatives.
France and some other nations recycle and reuse nuclear waste, so they do not have important waste storage problems. Given the general emphasis on recycling other wastes, it is surprising that America forbids recycling of nuclear waste. The answer seems to be that the United States has shied away from recycling because it produces plutonium, the ingredient for nuclear bombs. That seems less important now with the proliferation of nations with nuclear weapons.
The newest concern about nuclear power plants stems from the sharp growth in terrorist attacks, especially the 9/11 attack. This is an important development, but it is being met partly through greatly beefed-up security at American plants with additional guards, traffic barriers, and other security protections... Terrorist attacks on nuclear power plants that would release sizeable amounts of radiation are much more likely in less developed and less democratic nations that have looser safety standards than at American plants.
Posner says, in essence, let's allow the domecratic process to decide.
The question whether to permit or encourage the construction of additional nuclear electrical generating plants therefore turns on the weight given the various externalities that such plants produce, both positive and negative...
On the positive side, emphasized by Becker, nuclear power is “clean”...
A second positive externality, also stressed by Becker, relates to our dependence on foreign oil (and natural gas), a dependence that would be somewhat lessened by substituting nuclear fuel for fossil fuels in the generation of electricity...
... the problem of disposal assumes truly serious form because of the threat of terrorism
... if the U.S. were to commit itself to expanding its own nuclear generating capacity, it would be difficult to limit such expansion in Third World countries, where safety, terrorism, and proliferation risks are all much greater. Notice also that if only the U.S. expanded its nuclear power production, the impact on global warming would be even slighter than I have assumed.
But I have ignored a factor that seems particularly significant in the United States. Distinct from the “real” negative externalities of nuclear power is the widespread exaggeration of what might be called the “normal” hazards of nuclear energy. The risk of a nuclear accident is one of those “dread” risks that people attach greater weight to than the actual expected cost created by the risk justifies. From an economic standpoint, however, stubborn fears, even when irrational, count as real costs, because they impose disutility; in any event, democratic politics give weight to public opinion whatever its rationality...
I conclude that the case for actually subsidizing nuclear electrical generation has not been made. However, there is a stronger case for relaxing arbitrary regulatory barriers to the construction of new nuclear plants in the United States, provided that the widespread public fears of nuclear power can be overcome.
UPDATE: If you are in the mood to worry about the energy picture, The Prudent Investor has a post for you.
TrackBack URL for this entry:
Listed below are links to blogs that reference Becker and Posner Debate The Nuclear Option To Our Energy Problem :
- Hitting a Cyclical High: The Wage Growth Premium from Changing Jobs
- Thoughts on a Long-Run Monetary Policy Framework, Part 4: Flexible Price-Level Targeting in the Big Picture
- Thoughts on a Long-Run Monetary Policy Framework, Part 3: An Example of Flexible Price-Level Targeting
- Thoughts on a Long-Run Monetary Policy Framework, Part 2: The Principle of Bounded Nominal Uncertainty
- Thoughts on a Long-Run Monetary Policy Framework: Framing the Question
- What Are Businesses Saying about Tax Reform Now?
- A First Look at Employment
- Weighting the Wage Growth Tracker
- GDPNow's Forecast: Why Did It Spike Recently?
- How Low Is the Unemployment Rate, Really?
- April 2018
- March 2018
- February 2018
- January 2018
- November 2017
- October 2017
- September 2017
- August 2017
- July 2017
- May 2017
- Business Cycles
- Business Inflation Expectations
- Capital and Investment
- Capital Markets
- Data Releases
- Economic conditions
- Economic Growth and Development
- Exchange Rates and the Dollar
- Fed Funds Futures
- Federal Debt and Deficits
- Federal Reserve and Monetary Policy
- Financial System
- Fiscal Policy
- Health Care
- Inflation Expectations
- Interest Rates
- Labor Markets
- Latin America/South America
- Monetary Policy
- Money Markets
- Real Estate
- Saving, Capital, and Investment
- Small Business
- Social Security
- This, That, and the Other
- Trade Deficit
- Wage Growth