Article Critique-Cost Accounting for Nuclear Energy
Article Critique Costanza, Robert, et al. “A True Cost Accounting Approach to Nuclear. ” Triple Pundit: People, Planet, Profit. 5 Apr 2011. 6 Aug 2011. In his article, “A True Cost Accounting Approach to Nuclear,” Robert Costanza first presents the example of hidden clean up costs of the nuclear disaster in the Fukushima Daiichi power plant in Japan. The cost of which are paid in large part by the national government and taxpayers rather than the industry. Costanza explains that this makes judging the value of nuclear power difficult.
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The author proposes that all forms of energy incorporate their full costs including climate impacts, risk of accidents and the safe disposal of waste to determine their true value rather than considering them externalities. Robert Costanza is a University Professor of Sustainability and Director of the Institute for Sustainable Solutions at Portland State University. He is also the cofounder and former president of the International Society for Ecological Economics. Costanza is well qualified for the topic and clearly expresses his main purpose in his opening paragraph.
The author helps visualize the topic with the recent nuclear disaster in Japan that many of us experienced through the media. Constanza states that “taken as a whole, the safety record of nuclear energy has been relatively good”. Specifically, “France generates approximately 75% of its electricity from nuclear power and has been running plants for decades without major incident”. The author provides information on new plant designs called generation III reactors that have improved safety features over the 1970’s generation II reactors such as the one at the Fukushima Daiichi plant.
Then candidly Constanza points out the plants built before the 1990’s are beginning to show their age and the risk for disaster begins to increase. In detail, he explains the problem of long term waste disposal. Recently a proposal of a storage facility in the Yucca Mountains, Nevada was rejected by President Obama due to the facility’s guarantee that the radioactive material wouldn’t leak for 10,000 years however the minimum safety requirement as established by the US Environmental Protection Agency is 1 million years.
Capacity issues also exist. Costanza continues to demonstrate serious issues. For example, government subsidies make nuclear energy a relatively cheap option by offsetting costs of uranium, insurance and liability, security, water, waste disposal and plant decommissioning. In my opinion, Costanza successfully suggests that the effect of subsidies distorts the price of electricity generated by nuclear energy. Case in point, the author states the US government requires nuclear power plants to be insured for up to 12. billion dollars. “Although this appears to be a significant amount, the 2010 Gulf of Mexico oil spill damage is estimated at $34 to 670 billion”. The Fukushima disaster cleanup costs could exceed these amounts. Costanza is successfully persuasive in the idea that the approach to evaluating nuclear power needs reform. He references his article by the World Nuclear Association, Environmental Information Coalition, the National Council for Science and Environment as well as other topic related scientists and professors.
The author states, “It is time to make sure the full costs and benefits are clear and that enough information is available for society to make informed decisions” and I agree with his position. Costanza proposes his ideas on approaching cost accounting to nuclear energy. First eliminate subsidies for nuclear power. The author argues that subsidies reduce private cost of capital for new reactors and shift long term risks away from investors to the general public. Although I personally agree with this argument, I disagree with his suggestion.
Costanza does not mention possible subsidies for safer forms of energy such as wind or solar. Secondly, Costanza suggests to require nuclear power plant owners to by full coverage insurance against accidents by specifically repealing the Price Anderson Act which limits nuclear accident liability to 12. 6 billion. In addition, the author adds that if insurance companies are unwilling to insure, then plant operators should be required to maintain an assurance bond adequate to cover nuclear accidents.
His reasoning is that cleanup costs would be borne by plant owners rather than by the public. Also the cost of apparent risk in the short term would be part of the true price of nuclear energy. Although Costanza clearly and adequately explains his idea, in my opinion his argument is weak. Although physicians are self insured for high cost liability, it is extremely unlikely that a nuclear operator could be insured for the amount that would be needed to cover a nuclear disaster or that any insurance company would be willing to take on such risk.
Finally, the author suggests plants be required to maintain an assurance bond to cover decommissioning and waste disposal. Costanza provides a good example where this approach is already in use, mining operations, however I find this argument to be weak as well. Popular opinion would agree that nuclear waste is more dangerous than mining waste. Most importantly, Costanza mentions in the beginning of his article that President Obama set up a commission to examine nuclear waste issues and they concluded that no one has found a safe way to store the waste for the required amount of time.
In summary, Costanza believes these steps would internalize costs and the price of electricity from nuclear plants would more accurately reflect full costs to society. The author recommends doing the same for other energy resources. Costanza states, “For example, what consumers pay for electricity produced from fossil fuel sources does not reflect environmental or health externalities. ” He then cites a Harvard study by Paul Epstein that concludes if environmental and health externalities were included in coal, the US public would pay triple the current price of electricity per kilowatt-hour.
Costanza concludes this would make other renewable sources of energy economically more competitive and would allow the market mechanism to determine if nuclear energy should be a part of the energy solution. I agree with Costanza’s idea on the system thinking approach to full costs of nuclear energy versus other forms of energy. His article is well organized with clear language. However, I feel Costanza’s arguments were not strong enough to convince me of his solutions.
Furthermore, I would have preferred if Costanza had included already developed sustainability measurement tools such as the United Nation’s System of Integrated Environmental and Economic Accounting or the economic input output life cycle assessment and how to apply those standards to determine full costs of nuclear energy. I learned a significant amount researching other views on nuclear energy and sustainability measurement and found this to be a fascinating topic to view in a cost accounting approach. Rigid system boundaries can make accounting difficult with sustainability measurement but possible.