The true cost of disaster insurance makes nuclear power uncompetitive

Daniel Pudles on nuclear power

I have a new comment at The Ecologist that anyone interested in nuclear energy and disasters may enjoy:

http://bit.ly/1nWjQbu

Comments and discussions are welcome.

I am extremely thankful to Oliver Tickell for valuable discussions and editing.

 

UPDATE 7-02-2014: In response to the comment by Franz Meister from the Environmental Agency in Austria I post a graphic that I did some while ago which shows the high correlation between nuclear accident insurance levels and GDP as well as GDP per capita. Obviously Franz Meister is correct in his comment as there are exceptions, see below, but in general poorer countries have lower insurance levels.

liab_GDP

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3 comments
  1. Franz Meister said:

    “Poorer countries tend to have lower insurance levels.” This sentence should be revised, as France has a liability cap with € 99 million but even czech republic has a liability cap of more than € 360 million. Austria has a valuable liability regime, which incorporates principles, which are worth to be part of a new EU wide liability system: no channeling – also the suppliers to a npp are liable. place of court can be Austria as well, if Austria would be damaged. Any pooling has a negative impact as it is immoral: it violates the polluter pays principle. Only those utilities and states should have to contribute to the damage costs, which are operating npp´s – in other words: If Austria would be the victim of a nuclear fallout resulting from a severe accident abroad, why should Austria contribute to a pooling fund on EU level? The same argument is valid for any other EU non nulear power plant owning state, like Ireland, Greece, Italy, Luxemburg plus Germany – when its last npp will be closed..

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    • Thank you for your comment. I updated my post above and added a figure which I did some while ago showing the correlation between liability levels and GDP. So, in general my observation that poorer countries tend to have lower insurance levels is correct, while you are certainly right that there are exceptions.

      I agree with you that we should adhere to the polluter pays principle as much as is possible. But, as I noted in my discussion at The Ecologist (see http://bit.ly/1nWjQbu), it is unlikely that polluters (i.e. nuclear plant operators) are able to pay for larger disasters. Consequently, the polluter pays principle will necessarily have to be violated. And then the question is what should be done?
      The EU seems to be moving towards principles of solidarity, which you suggest is immoral. My understanding is that there are advantages and disadvantages to this principle, which I discuss in the commentary.

      But clearly, the one question that we have to ask ourselves is: If even very rich confederations like Europe need to pool their money together in order to be able to cover for costs of nuclear disasters, then is this really a technology that we should continue to invest in?

      By the way – if you also make suppliers to a NPP liable, then does this still adhere to the polluter pays principle? What about the suppliers of the suppliers? What about those contractors that built the plant? What about the person that sold his land so that a NPP could be built on it? What about those that consumed the electricity generated by the plant? They benefited (maybe) in a similar way as the suppliers to the NPP did. I am obviously pushing this point quite far, but I do not think it is easy to argue that this should necessarily be part of the new EU law.

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      • Franz Meister said:

        Please have a look at the description of the principles of the Austrian Nuclear Liability Act: https://www.oecd-nea.org/law/nlb/Nlb-62/hintereg.pdf

        Concerning: “The EU seems to be moving towards principles of solidarity” – before we could start to think about the term of solidarity, the liability cap for the operators for each npp operator within the EU should be raised. I do not think it would be enough to raise the liability cap to 2,5 billion € – even this would force the states of the Vienna Convention to increase its liability cap substantially plus France! Even if a pooling model amoung npp operators could be implemented on EU level, the cap should be oriented on the damage costs already known from Fukushima and Cernobyl. This is the relevant benchmark.
        But there are no indications and or rumors from EC, that they are thinking in such a direction and dimension. There is convincing evidence, that if a nuclear accident occurs in a „nuclear state“, its own population will suffer, because the liability cap of the operator, will be insufficient.
        I would like to refer to the results of a study, which allows us to discuss, which states are potential netto risk exporters and which states are potential risk importers – which state do not impose a nuclear risk to any neigbouring state and so on. After we have cleared, which states impose risks to others, then it will be obvious, which state has which kind of responsibility related to its own population and to all those abroad. Solidarity could start to be discussed after there is overwhelming evidence, that responsibility was taken seriously.

        But it seems, that we are still far from this level of discussion.

        http://flexrisk.boku.ac.at/en/index.html

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