Thoughts on economics and liberty

Category: Public policy

Why special economic zones, opportunity zones and such “planned” centres are a bad idea

Broadly speaking there are two types of “special” treatment for industry: (1) Industry Precincts and (2) Special Economic Zones/opportunity zones

In the former, there is generally a more liberal planning regime for commercial and industrial development and some special investment in infrastructure. In the latter, the first two are ensured but also special tax exemptions and less onerous laws

TYPE 1: ZONING AND INFRASTRUCTURE

Urban renewal precincts: These are rezoned areas for more intense or new development. These are likely to fail since they are often generated by a government intervention.

Innovation clusters/ business clusters: Harvard Business School’s Michael Porter, one of the leading thinkers on industry clusters, has documented that the creation and maintenance of competitive advantage hinges most critically on clusters of highly competitive firms in a wide variety of industries in every country. [Sanjeev: In principle, one can have nothing against such clusters if they evolve organically. Conscious efforts by governments to “develop” them are likely to be wasted. – this view is confirmed by Muro and Katz below]

Brookings Institution thought leaders Mark Muro and Bruce Katz (2010) notes: “Don’t try to create clusters. Clusters can’t be created out of nothing, and cluster initiatives should only be attempted where resources and capabilities already exist. The pre-existence of a cluster means that an industry hotspot has passed the market test. By contrast, efforts at wholesale invention will likely be fraught with selection issues, inefficiency, and probable failure and waste.”

(Muro, M. & Katz, B., 2010. The New “Cluster Moment”: How Regional Innovation Clusters Can Foster the Next Economy.)

 

TYPE 2: TAX EXEMPTIONS AND LESS ONEROUS LAWS

Special economic zones: SEZs are “demarcated geographic areas contained within a country’s national boundaries where the rules of business are different from those that prevail in the national territory. These differential rules principally deal with investment conditions, international trade and customs, taxation, and the regulatory environment; whereby the zone is given a business environment that is intended to be more liberal from a policy perspective and more effective from an administrative perspective than that of the national territory”. [Source]

By definition, the idea of SEZ is inimical to the rule of law. The rule of law must apply uniformly across an entire country, but in Third World countries such capability does not generally exist and they therefore apply special rules to special areas.

As a general rule, an entire country should be a SEZ, with the best possible rules and regulations for all. The best examples are probably Singapore and Hong Kong, where the entire country operates under a liberal regime, and everyone benefits.

India has a number of SEZs. The only question to be asked is why are the rules that apply to these SEZs not applicable to the whole of India.

ASSESSMENT OF SEZs BY WORLD BANK

Anecdotal evidence turns up many examples of investments in zone infrastructure resulting in “white elephants,” or zones that largely have resulted in an industry taking advantage of tax breaks without producing substantial employment or export earnings. Moreover, many of the traditional EPZ programs have been successful in attracting investment and creating employment in the short term, but have failed to remain sustainable when labor costs have risen or when preferential trade access no longer offers a sufficient advantage.

Many economists, however, still view zones as a second- or even third-best solution to competitiveness, whose success is restricted to specific conditions over a limited time frame (Hamada 1974; Madani 1999; World Bank 1992). [Source]

ASSESSMENT OF INDIA’S SEZs

SEZs are not need to follow environmental regulations. In the construction stage and later in production process SEZs use huge amount of water resource. Labour laws are also not applicable in these enclaves. [Source]

Help the Rich, Hurt the Poor: Case of Special Economic Zones by EAS Sarma

OPPORTUNITY ZONES

Why Opportunity Zones Won’t Work

Key points: “To attract new residents and new investors, neighborhoods need certain fundamentals: safe streets and low crime, good schools, and attractive parks and amenities. Low property taxes help, too. Absent these advantages, investment incentives may succeed in gilding the ghetto but will not lead to truly healthy communities.”

Further: “No substitutes exist for aspiration, agency, and education. Crowded Chinese and South Asian neighborhoods have proved that poor physical conditions are no barrier to advancement. That’s a lesson that government planners have yet to learn: self-help institutions flourished in many of the African-American neighborhoods leveled for public housing.”

KEYWORDS

export processing zones, business clusters,

 

Continue Reading

Help the Rich, Hurt the Poor: Case of Special Economic Zones by EAS Sarma

Note: I agree with much of what EAS Sarma is saying here. However, I don’t agree with his defence of labour laws.

(Extracts from Economic and Political Weekly May 26, 2007)

In a country where more than 100 million people in the rural areas have no land of their own and another 80 million house­holds own agricultural holdings less than five acres, it is unfortunate that the central and the state governments should rush into forcibly acquiring hundreds of thousands of hectares of arable lands in huge chunks and dole them out to powerful industrial houses and real estate dealers at throw-away prices.

Central to the SEZ scheme is the facile assumption that handing over thousands of hectares of land cheaply to promoters of industry and relaxing the laws of the land, including those that relate to the welfare of the industrial workers, protection of the environment, taxation, etc, would automatically promote industrialisation and solve the m1gging unemployment problem of the country overnight. Similar doles were tried out in the past, with not much success. What our rulers fail to recognise is that it is bad governance that lies behind many of our failures on the development front.

SEZ Impact
The basic principles of good governance are to involve the people in decision-making, enhance transparency in the functioning of the government, create a competitive environment, provide greater choice for the citizen in offering public services, minimise the element of discretion and ensure non-discriminatory treatment to all. Government’s policies should be in the direction of creating competitive markets, rather than promote private monopolies. Unfortunately, none of these essential requirements of good governance find place in the recent policies. On the other hand, many so-called “reforms” during the last few years have openly gone against these basic tenets. The case of the SEZs is an excellent example of this.

Decision-making on SEZs has generally been non-transparent. SEZs are imposed on the local people without any prior consultation. Whenever the displaced persons opposed the location of an SEZ, their dissent had been termed “anti-devel­opment” and crushed mercilessly with the iron hand of the state.

The process of selection of the pro­moters of SEZs is in itself highly non­transparent. There is not a single case of SEZ in which the promoter is selected through well-established competitive bidding procedures. This has provided enormous scope for corruption and political patronage.

SEZs displace people on a large scale. The displacement is both physical and occupational. In coastal states like Andhra Pradesh, some SEZs are located along the sea coast, cutting off fishermen’s access to the sea from which the latter eke out their livelihood. In many places, small agriculturists are thrown out of their home­lands and, along with them, those that depend on agriculture, such as artisans and rural workers have also lost their livelihood. The latter do not figure at all among the beneficiaries of the rehabilitation packages.

Government’s Stand
In the case of the SEZs and a host of other similar industrialisation schemes, it is strange to find the government reversing its role and acting as a broker on behalf of the industry. In this role, the government has not even hesitated to invoke its “right of eminent domain” and forcibly acquire land for the SEZs. In the past, the land acquisition law, which is indeed a draconian one, had been used to acquire lands for genuine public purposes such as schools, hospitals, etc. It had rarely been used to further private interest, as is the case now.

The rehabilitation packages announced by the states lack credibility, as there are thousands of families displaced by pre­vious projects still awaiting compensation payments. In some cases, those displaced in early 1970s are yet to receive compen­sation. In many cases, the true beneficia­ries are the absentee landlords, interme­diaries and touts that collude with the government agencies. The Andhra Pradesh experience has shown that the poor that were assigned government land were the ones that were deprived of those lands to benefit the SEZ promoters.

India’s SEZ Scheme
While China has followed a step-by-step approach and set up only six SEZs during the last several years, India has already set up 19 SEZs, approved another 234, accorded “in prin­ciple” approval for 162 and notified 19. China’s SEZs are larger in size, whereas the extent of an Indian SEZ seems to depend on the political clout that the promoter wields and the leverage he is able to achieve with bureaucrats and politicians. China has a well thought-out land-use policy that seeks to protect its arable land. India has no such policy.

SEZs are given open-ended tax conces­sions. The experience so far in the country with tax holidays for industry has not been sanguine. Apart from the direct revenue losses they have resulted in, they also have led to an uneconomic location of industrial units.

The labour laws applicable to the rest of the country have been relaxed for the SEZs. The existing laws are well ­intentioned and they promote worker wel­fare [Sanjeev: disagree – these laws need to be revised to ensure greater liberty of contracting]. Relaxing such laws exclusively for the SEZs shows the government’s lack of conviction in its own commitment to social justice. In going along with this, for the first time, the government has openly accepted the untenable contention that social justice inhibits economic develop­ment and, therefore, it could be conve­niently jettisoned off its agenda.

In some SEZs, the state governments are joint venture partners. In the case of some, special incentives by way of concessional electri­city and water tariffs have been offered. In almost all cases, valuable lands have been given away at concessional prices. In return for all these sops that run into thousands of crores, the promoters of SEZs are not willing to assume any kind of social responsibility. For example, they have no intention to reserve jobs for SCs/STs.

The employment opportunities that the SEZs would create are limited, compared to the number of poor farmers uprooted. The promise of jobs for the displaced is a hollow one, as none of the displaced families would be able to find even one of its members having the right kind of skills and qualifications required for such jobs. Even if we assume that SEZs do create some job opportunities, the benefit of such limited employment would get more than offset by the number of rural families permanently deprived of their livelihoods.

In the recent years, the industry has been lobbying for relaxations in the procedures for environmental clearances. The SEZ policy has some elements that relate to this. In the case of many SEZs already ap­proved, no detailed environmental impact assessment has been attempted. For ex­ample, the industrial units in an SEZ would not only drain surface and groundwater resources at the expense of the local com­munities, but also their affluents could pollute the local water bodies.

Conclusion
Forc­ible acquisition of land should be done away with. Decisions that involve displace­ment of people should not be taken with­out prior consultation with the local com­munities. Models of development with minimal dislocation need to be adopted in preference to those that indiscriminately displace people. The existing rehabilitation policy of the government is flawed, as it does not allow the displaced people to have the status of shareholders of projects. The government should recognise the inherent rights of the local communities to resources such as land, water, minerals, forest wealth, etc. All these call for a paradigm change in the attitude of the government.

Economic development, growth and industrialisation are the outcomes of good governance, not policies based on sops, subsidies and political patronage.

 

Continue Reading

Rupert Darwall’s works

Came across this author’s work through a video:

Turns out he writes on many issues that interest me.

Some of his works:

Essay: A Veneer of Certainty Stoking Climate Alarm (2017) PDF available

The Age of Global Warming: A History – PDF available

THE ANTI-DEVELOPMENT BANK The World Bank’s regressive energy policies – 2017 PDF

A longish podcast.

Excerpt: Exposing the totalitarian roots of the climate industrial complex

Some discussion of his works

The Nazi Roots Of The Global Warming Scare

Book review, ‘Green Tyranny’ by Rupert Darwall

Review at Independent Institute.

Continue Reading

Extract on nuclear energy from Smaller Faster Lighter Denser Cheaper by Robert Bryce

My science talent scholarship project of 1976 was based on nuclear science. I later studied (and re-studied) Julian Simon’s views on nuclear power (in The Ultimate Resource II) and continued to be a strong supporter. Now, in order to write my next TOI article, I need to apply a critical lens to the issue once again.

So I’m re-researching nuclear.

Some useful material from the above book.

===

Fukushima

As bad as the accident at Fukushima was, the actual damage was pretty well contained.

From a nuclear safety scenario, it’s difficult to imagine a scarier scenario than what happened on March 11, 2011. A massive earthquake measuring 9.0 on the Richter scale hit 130 kilometers off the Japanese coastline. Within minutes of the earthquake, a series of seven tsunamis slammed into the Fukushima Daiichi nuclear plant. Some of them were as high as 15 meters. The backup diesel generators, designed to keep the nuclear plant’s cooling water pumps operating, quickly failed. A day later, a hydrogen explosion blew the roof off the Unit 1 reactor building. Over the next few days, similar explosions would hit Units 2 and 3.20 Three reactors melted down.21

It was the worst nuclear accident since the Chernobyl accident in 1986. There was widespread fear about the potential for large numbers of casualties due to radiation from the stricken plant. But here’s the reality: the accident at the Japanese nuclear plant led directly to exactly two deaths. About three weeks after the tsunami hit the reactor complex, the bodies of two workers were recovered at the plant. They drowned.22

For decades, we have been conditioned to believe that radiation is scary. In the wake of the Fukushima accident, there were widespread fears that huge amounts of radioactive materials from the plant would contaminate large areas of Japan and that those same materials could hit the United States. That didn’t happen. In early 2013, the World Health Organization reported that radiation exposure due to Fukushima was low. The report concluded: “Outside the geographical areas most affected by radiation, even in locations within Fukushima prefecture, the predicted risks remain low and no observable increases in cancer above natural variation in baseline rates are anticipated.”23

A few months after the WHO report was published, the UN’s Scientific Committee on the Effects of Atomic Radiation released its own report. “No radiation-related deaths have been observed among nearly 25,000 workers involved at the accident site. Given the small number of highly exposed workers, it is unlikely that excess cases of thyroid cancer due to radiation exposure would be detectable in the years to come.” The UN committee was made up of eighty scientists from eighteen countries. In addition to finding no documented deaths, the document also praised the actions of the Japanese government immediately after the 2011 accident. “The actions taken by the authorities to protect the public (evacuation and sheltering) significantly reduced the radiation exposures that would have otherwise been received by as much as a factor of 10.”24

I am not minimizing the seriousness of what happened at Fukushima. The reactors used at the site were of an older, inferior design that lacked the kind of passive-cooling systems that are now being incorporated into reactors. (Passive-cooling systems could have prevented the reactors at Fukushima from melting down.) Furthermore, it’s clear that all the problems with the Fukushima reactors have not been solved. In late summer 2013, Tokyo Electric Power Company admitted that it was having difficulty managing more than 200,000 tons of radioactive water being stored in makeshift tanks. Some of those tanks have begun leaking, and some of that leaked water is reaching the ocean.25 Nor am I forgetting about the huge costs of decommissioning and cleaning up the Fukushima site. In all, the price tag for decommissioning the plant could reach $100 billion, while another $400 billion may be needed to decontaminate areas outside of the plant and to compensate the people who were displaced.26

Yes, the price tag for Fukushima will be absurdly high. But this wasn’t Chernobyl. The nuclear plants themselves didn’t malfunction. Homer Simpson didn’t hit the wrong button in the control room. Instead, the reactors at Fukushima Daiichi were hammered by some of the planet’s most destructive forces.

The earthquake that hit northeastern Japan on March 11, 2011, was about 700 times as powerful as the killer quake that devastated Haiti in 2010 and left some 300,000 people dead. The Japanese earthquake was the fifth-most powerful one to rock the planet since 1900.27 The quake was so powerful it affected the rotation of the Earth and shifted the position of the planet’s axis by about 17 centimeters (6.5 inches).28 It’s easy to focus on the problems with the nuclear reactors, but the damaged power plants were only a tiny part of the larger devastation. The March 11 earthquake and tsunami killed nearly 16,000 people. It injured another 6,000 or so, and nearly 2,700 people are still missing.29 Total damages—to infrastructure and the overall Japanese economy—will be measured in the hundreds of billions of dollars.

About ten days after the Fukushima accident, George Monbiot, a veteran environmentalist who had long described himself as “nuclear-neutral,” published a column in the Guardian to explain that he had changed his mind on the technology. “Atomic energy has just been subjected to one of the harshest of possible tests, and the impact on people and the planet has been small.” He continued, “The crisis at Fukushima has converted me to the cause of nuclear power.”30

While the Fukushima accident has been costly, it has also helped catalyze the push for safer, more resilient reactors. Several companies are already deploying what are known as Generation III+ reactors, which have stronger containment systems and passive safety systems that can cool and stabilize the reactor core for at least three days even if there is no available electricity. Examples of the now-available Generation III+ reactors include the AP1000 from Westinghouse and the European Pressurized Reactor from Areva.

OTHER POINTS

Reactor technology is rapidly improving.

With the right policies in place, nuclear should get Cheaper (Sanjeev: what are the “right policies?).

Nuclear reactors have Smaller footprints. Nuclear plant has 2,100 times as much power density as wind energy (which is 1 watt per square meter).

gravimetric energy density of uranium enriched to 3.5 percent and used in a nuclear reactor is roughly 87,000 times that of gasoline.

To equal the electricity generation capacity at Indian Point with wind energy, you’d need to pave about 2,000 square kilometers (772 square miles) with wind turbines, an area three-quarters the size of the state of Rhode Island. Of course, that capacity would still need to be backed up by a natural gas–fired power plant.

it’s still too expensive. building a new nuclear plant in the United States currently costs about $6.3 million per megawatt. For comparison, a coal-fired power plant costs roughly $3 million per megawatt, and a natural gas–fired power plant costs about $1 million.

we are just at the beginning of the Nuclear Age. When compared to other power sources, nuclear energy is an infant. the catastrophists are claiming that nuclear energy is too dangerous and too expensive. They want us to believe the Nuclear Age is over. It’s not. It’s only just started.

On its Web site, Greenpeace makes the outrageous claim that there is “no such thing as a ‘safe’ dose of radiation.”19 Never mind that we humans are hit with radiation every day of our lives from the sun and from the environment around us. We can count on Greenpeace and the rest of the antinuclear establishment to continue to denigrate nuclear, because fear sells.

Herewith, a short list of some of the most interesting reactor technologies:

Small modular reactors. Generally defined as any reactor with a capacity of 300 megawatts or less, the small modular reactor (SMR) concept is gaining traction for several reasons. First, they cost a fraction of larger reactors. Second, they can be deployed as single or multiple units. If a utility needs, say, 800 megawatts of generation capacity, it could buy as many SMRs as it needs to meet that demand, and the reactors could be added in stages. Third, SMRs are designed to be buried in the ground, which makes them more resistant to natural disasters, terrorism, and mishaps. Finally, and perhaps most important, the SMR could be manufactured in a central location. That final aspect should lead to lower costs, as it would allow the company producing the reactor to maintain a dedicated workforce at one location and ship the reactors—by barge, rail, or truck—to the final destination. Concentrating the workforce in one place should also accelerate the learning curve and allow the company (or companies) producing the reactor to streamline production and reduce costs.

Perhaps the most prominent developer of SMRs is Babcock & Wilcox, which has decades of experience in the nuclear sector. In 2009, the company announced plans to build a modular reactor capable of generating 180 megawatts of electricity. The company’s stock is traded on the New York Stock Exchange.

Molten salt reactors. Rather than use fuel rods like conventional reactors, this design mixes the nuclear fuel into a salt mixture. That mix is then pumped in a loop with a reactor on one side and a heat exchanger on the other. When the mixture is in the reactor, it goes into a critical state. The heated salt-fuel mix is then used to produce steam, which, in turn, is used to produce electricity. The design has a fail-safe mechanism in the form of a drain plug at the bottom of the reactor that is made of solid salt. That plug is continually cooled. If the cooler for the plug gets turned off, or if the system’s pumps lose power, the plug melts and the molten salt-fuel mix flows into a storage tank where it cools on its own. This design removes the possibility of a meltdown. Molten salt reactors are proven. The Department of Energy tested the design in the 1960s at Oak Ridge National Laboratory, where one ran for six years.31

Among the highest-profile promoters of the molten-salt reactors is a start-up company called Transatomic Power, which is promoting what it calls the Waste-Annihilating Molten Salt Reactor.32 Transatomic is backed by venture capitalists, including Ray Rothrock of Venrock Capital.33 Transatomic says their reactor design (which exists only on paper) can also run on nuclear waste, a feature that could help deal with the growing volume of spent fuel rods and other nuclear materials being stacked up in locations around the world. (The world now has about 270,000 tons of high-level nuclear waste, and that volume is growing by about 9,000 tons per year.)34

Integral fast reactors. A favorite of many nuclear aficionados, the integral fast reactor (IFR) is more than a concept. The Department of Energy built a prototype IFR in Idaho (called the EBR-II) and operated it for three decades. In the 1980s, the agency began building another IFR, but funding for the project was killed by Congress in 1994.35 The IFR uses metal cooling instead of water, the coolant used in conventional reactors. The reactor is designed to be safe. Tests on the prototype IFR in Idaho showed that if the reactor’s cooling pumps were shut off, the reactor would not overheat. Instead, it simply shut down on its own. In addition, the IFR can burn radioactive waste from other reactors and produce its own fuel. In other words, it can be self-sustaining. The industrial giant General Electric was one of the lead developers of the IFR project with the Department of Energy. Based on its work on the IFR, GE has teamed with the Japanese firm Hitachi to propose what they are calling PRISM, short for Power Reactor Innovative Small Modular. If GE and Hitachi are able to build a PRISM reactor, it would produce about 600 megawatts of power.36

Thorium-fueled reactors. Rather than use uranium, some nuclear advocates believe thorium is a superior reactor fuel. Thorium is far more abundant in the Earth’s crust than uranium. Unlike uranium, thorium doesn’t need to be enriched before it is put into the reactor. Used as a reactor fuel, thorium doesn’t produce as many radioactive by-products during fission (such as plutonium) as does uranium. This, in theory, reduces the risk of nuclear proliferation because it cuts the amount of plutonium available for making weapons. In addition, the waste produced by thorium-fueled reactors is far less radioactive than what is produced by conventional reactors.37 Despite thorium’s advantages, however, no commercial operating reactors are using it today.38 A Virginia-based company, LightBridge, is promoting the use of thorium as a reactor fuel. But the company, whose stock is publicly traded on the NASDAQ, is small—its market capitalization is about $20 million—and is struggling to make money.39 On the federal side of the ledger, Brookhaven National Laboratory, located on Long Island, New York, has long been a leader in research on thorium as a reactor fuel.

Traveling wave reactors. This design is being pursued by TerraPower, a private company bankrolled, in part, by its chairman, Microsoft founder and billionaire philanthropist Bill Gates, who has put some $35 million into the company. TerraPower’s vice chairman is Nathan Myhrvold.40 The former chief technology officer at Microsoft, Myhrvold is an author and polymath who has a doctorate in theoretical and mathematical physics from Princeton University.41 The traveling wave reactor has passive safety features that prevent it from melting down. In addition, it uses sodium as a coolant and depleted uranium (U-238) for fuel. That matters because U-238 is produced as a by-product during the enrichment process for U-235, which is the primary fuel used by conventional reactors. In addition to U-238, TerraPower says their reactor could also be fueled by spent fuel rods from existing conventional reactors, or even thorium.42 (For the major players in nuclear energy, see Appendix G.)

While private investors and publicly traded companies are seeking opportunities in nuclear, some mainstream environmentalists are finally embracing the technology. Their reason for supporting nuclear is simple: climate change. [Sanjeev: This is the stupidest reason to “embrace” nuclear. It must be a pure cost-benefit equation and all costs – including 1000 year storage costs, must be added] Their concern about carbon dioxide emissions, along with their understanding that renewable sources like solar and wind cannot begin to provide the scale of energy we demand at prices we can afford, has led them to see nuclear as an essential lower-carbon element of our energy mix.

Safety

In 2013, filmmaker Robert Stone released Pandora’s Promise, a documentary that “explores how and why mankind’s most feared and controversial technological discovery is now being embraced by some of the activists who had once led the charge against it.”43 Stone’s film is masterly in its use of a simple technique. Stone goes around the world to do interviews, and in many of his stops, including Chernobyl and Fukushima, he carries a handheld Geiger counter that’s measuring the background radiation levels. Stone shows that on a beach in Brazil, the background radiation is higher than in some locations near Chernobyl. By doing so, Stone helps demystify radiation and shows that, in fact, there are safe doses of radiation. In fact, we are being hit by radiation nearly all the time. On that beach in Brazil, a family is partially burying an older man in the dark sand because, as the old fellow explains, the radiation in the sand is good for his aches and pains.

Stone’s film features environmentalists who had been antinuclear and have since changed their minds, and it devotes significant time to profiling Stewart Brand, the iconoclastic environmentalist who gained fame as the publisher of the Whole Earth Catalog, a book that helped define the 1960s and ’70s in America. In a trailer for the film, Brand provides a snappy quote: “The question is often asked, ‘Can you be an environmentalist and be pro-nuclear?’ I would turn that around and say, ‘In light of climate change, can you be an environmentalist and not be pro-nuclear?’”

Stone’s film also features Michael Shellenberger, the cofounder of the Oakland-based Breakthrough Institute, who is ardently pro-nuclear. The think tank has been a major supporter and proponent of Pandora’s Promise, and Shellenberger gets the last word in the film, saying that the pro-nuclear forces are gaining strength, and that it feels like “the beginning of a movement.”

The Breakthrough Institute has played a key role in catalyzing the pro-nuclear Left. In a 2012 article in Foreign Policy, “Out of the Nuclear Closet: Why It’s Time for Environmentalists to Stop Worrying and Love the Atom,” Shellenberger, along with his Breakthrough Institute cofounder, Ted Nordhaus, and their colleague, Jessica Lovering, summed up the position of the pro-nuclear Greens by declaring that “climate change—and, for that matter, the enormous present-day health risks associated with burning coal, oil, and gas—simply dwarf any legitimate risk associated with the operation of nuclear power plants.”44 [Sanjeev: I agree with the HUGE health risks of coal, but  not with the “climate change” bogey]

In mid-2013, the think tank published a report that should be required reading for anyone interested in nuclear technology. “How to Make Nuclear Cheap” concludes that making reactors Cheaper will require sustained investment in nuclear technology. That investment should focus on making reactors safer and more modular, meaning that their various components can be standardized and therefore, manufactured at lower cost.45

Although the report doesn’t single out one reactor design as the “best,” it makes a critical point about the need for more governmental involvement. More government commitment is needed to streamline the licensing process for new reactor technologies. It’s also needed to enable innovation in materials science. “The history of the commercial nuclear power industry is one in which commercialization in virtually all contexts has depended upon heavy state involvement,” states the report. Such governmental involvement is a result of the complexity of nuclear technologies, as well as the need for proper licensing and oversight. Government is also needed to provide insurance in case of a catastrophic accident. [Sanjeev: No!] “The prospects for accelerating nuclear technology [will] likely depend heavily on the evolving policy and regulatory landscape, both in the United States and abroad.”46

And therein lies a significant rub. Electricity production from fuels like natural gas and coal doesn’t require major interventions from government, because the capital requirements are far lower and the technologies involved are not as complex or potentially dangerous. Jerry Taylor of the Cato Institute has frequently condemned governmental involvement in nuclear, calling nuclear “solar power for conservatives.” It’s a funny line. But Taylor is ignoring the benefits that nuclear energy can—and should—bring to society.

Our future prosperity depends on cheap abundant reliable supplies of electricity. We should be looking to, and investing in, nuclear because the physics are so favorable. Denser energy is almost always better energy. Nuclear’s power-density advantages simply cannot be denied.

Continue Reading