The Limited Appeal of Nuclear Energy

After 20 years of stagnaion, nuclear energy again finds favor in the eyes of many energy planners. In contrast with electricity generated from coal or natural gas, nuclear power contributes little to greenhouse gas emissions and could therefore help in the effort to reduce global warming. The establishment of a tax on carbon emissions, which has been widely proposed as an incentive to move away from fossil-fuel use, would make nuclear energy even more attractive. Such arguments may ultimately prove compelling to industrial nations—but to assume that the developing nations will follow suit is to ignore some important realities.

Currently 435 nuclear reactors operate around the world, with an electrical generating capacity of approximately 370 gigawatts (GW), providing about 17 percent of the world’s electricity. Various analysts have optimistically foreseen a steep rise in those numbers. For instance, a 2003 interdisciplinary study by the Massachusetts Institute of Technology outlined a scenario of “low” nuclear growth that would still allow a tripling of nuclear generation by 2050. The contribution of the developing nations would soar to a third of the whole, from 10 to 307 GW. To reach that level, however, would demand about 8 percent annual growth sustained over 45 years.

No economic modeling figured into that estimate; the analysts merely assumed that the developing nations would aim for the 10 to 20 percent share of electricity from nuclear power that the rest of the world would adopt. Yet financing the up-front investments needed for nuclear plants is a major challenge even in industrialized countries: so far nuclear power expands only where governments facilitate private investment, a practice that is at odds with strong market liberalization policies. That trend will hold even more markedly in developing countries.

Moreover, motivation to shift to nuclear energy may be lacking. Concerns about greenhouse gas emissions simply do not have a high priority now in developing nations. Neither the Kyoto Protocol nor any other international agreement constrains those emissions for them (they were exempted to assist their development). For poor countries, the pivotal problem is the allocation of scarce resources. Their financial authorities cannot easily justify subsidizing nuclear energy at the expense of more pressing needs in health, education and poverty reduction

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