A wedge or a weight? Critically examining nuclear power’s viability as a low carbon energy source from an intergenerational perspective

Abstract

Some integrated assessment studies of climate change have concluded that nuclear energy has a large potential impact on carbon abatement costs. However, these studies have often modeled the cost of nuclear waste management very simply or neglected it entirely. Common difficulties with existing studies include the use of simplistic nuclear waste management cost models and implicitly minimizing costs in the distant future by using discount rates that are arguably inappropriate for intergenerational cost-benefit analysis. These difficulties lead to results that may underestimate the cost of nuclear waste management – and therefore overestimate the value of nuclear energy as a low carbon energy technology. Here, we consider how a more realistic treatment of the nuclear waste disposal problem than has been used in previous studies could affect the viability of nuclear power in the context of integrated assessments of climate change. We construct a generic nuclear waste management cost model to develop cost estimates for nuclear waste management based on current policy, practice, and cost estimates for storage and disposal technologies. Our cost estimates are discounted using conventional constant exponential discounting as and a declining discount rate scheme. Results suggest that the optimism reflected in previous works is fragile: More realistic nuclear waste management cost models and uncertainty-appropriate intergenerational discount rates produce many more scenarios in which nuclear waste management costs are higher than previously assumed. As a consequence, nuclear energy’s economic attractiveness as a low carbon energy option is appears to be lower than earlier works suggested.