I was recently in a conversation that touched on this…
Basically, the claim was made that insurance companies considered nuclear power “too risky” to insure unless the government put an artificial limit on compensation (to the public) that could be recieved in a lawsuit.
Yeah, this all sounds pretty fishy to me, but I’ve barely read much on the topic of free market environmentalism so I don’t have much to say on this particular topic. Are there any very quick reads (preferably an article or something) on this topic? (Simply because my reading list on other topics is too long already.) Obviously the ideal I’m shooting for is to remove the “need” for government intervention at all in this kind of case (which seems a little unique because of the nature/dangers of nuclear power)-- so what’s the basic argument against government intervention here?
The only response I can come up with for this particular case is that, assuming it’s true that neither insurance companies (nor energy companies) are willing to take on such a great risk (which I’m not sure I buy at all), then perhaps nuclear energy really is too dangerous to be used at all (again, seems doubtful). Not really an ideal answer…
Why? It seems fine to me. If insurance agencies price it at such a high premium due to risk, it is perhaps unviable as an economic means of procuring energy. Perhaps though they are arguing this based on outdated information about nuclear power plants? Because they are demonstrably a safer and cleaner form of energy than other available sources thereof. The question is whether it is more efficient economically.
I do not think so, despite my acceptance of safer reactors (pebble based reactors, especially) as over-coming previous hazards of nuclear energy.
I think if nuclear energy does make an appearance anytime soon, it will be very small & limited (say, early house reactor models for those who can afford being early adopters), specifically because it will be too costly to mass-produce (if not only because of the economic depression we are entering in, then because of the incompetence of a centrally planned economy via The State).
Long-term wise, perhaps when our civilization reaches .72 or .74 (which I suppose would be around 2020 to 2040; per Kardashev scale, of which we are currently at .70), I think nuclear energy will be possible, but will probably be different than imagined today.
Renewable energies (solar in particular, as it seems to be making huge gains in technological efficiency as of late, but also geothermal), battery based fuel (electrochemical fuel cells & perhaps later, hydrogen fuel cells), & increasing efficiency & refining older or current technologies with augmented knowledge are the smarter, more economical strategies for now.
Nanotechnology & Solar energy seems like a long-term winning strategy, imo, & I wouldn’t be surprised if the development of both technologies complimented one another in both profit & development.
I’m not disagreeing with the “incompetence of a centrally planned economy”, but how do we explain French nuclear energy production? (If the gov in France isn’t involved there, I’d be shocked.)
Outdated information had occurred to me, especially since I think it has become safer over time. I’ll have to ask about that..
It may in fact be true that the financial risk of operating a nuclear reactor is not worth the amount of money that can be made selling the energy. The important concept is that we do not know this in the absence of force. Currently the government licences the operators of these facilities and more importantly provides limited liability to these operators. The insurance companies have no such limits on their liability and therefore are much less willing to insure an energy company running a nuclear reactor than the energy company is in running one.
The real cause here is limited liability. In a truely free society, supplier should have FULL liability for their actions. If they harm the person or property of another then they are completely liable for restitution. This liability would be determined by a disinterested preagreed upon third party.
There are several solutions:
Companies place nuclear reactors far away from populations and purchase the ground around them.
Companies generate electricity using means that have less risk.
Companies come to agreements with the local residents on the extent of their liability. I might be interested to take 100,000 now and 1,000,000 in case of an incident and absolve the reactor operator of any further liability.
In the crazy government controlled world of today, the government and its agents (Courts) think individuals are too stupid to agree to limit liability. So the third option is null. Obviously the third option may be optimal for poor folks and the like who can use the up front money but old uncle sam knows better.