Nuclear Insurance Subsidies Cost from Post-Fukushima Accounting Based on Media Sources

John J. Laureto and Joshua Pearce
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John J. Laureto: Department of Materials Science and Engineering, Michigan Technological University, 601 M&M Building, 1400 Townsend Drive, Houghton, MI 49931-1295, USA

Sustainability, 2016, vol. 8, issue 12, 1-16

Abstract: Quantification of nuclear liability insurance is difficult without arbitrary liability caps; however, post-mortem calculations can be used to calculate insurance costs. This study analyzes the Fukushima (Daiichi) nuclear power plant disaster to quantify the cost per unit electricity ($/kWh) of nuclear energy from the lifetime of the plant after accounting for the true cost of the liability needed to cover the damages from the nuclear disaster determined from news reports. These costs are then compared to the cost of electricity currently paid by Japanese consumers, and then are aggregated to determine the indirect subsidy for nuclear power providers in both Japan and the USA. The results show that the reported costs of the Fukushima nuclear disaster are $20–525 billion, which results in a real insurance cost from the lifetime of electricity produced at the plants between $0.22–5.78/kWh. These values are far higher than the current insurance costs by Japanese law of $0.01/kWh and even the total costs consumers pay for electricity. Although the spread in the input costs is large and the reported metrics are incomplete, the nuclear insurance subsidy is clearly substantial in Japan and in the USA. Ideally, energy sources should be economically sustainable without the need for a government insurance subsidy. For the electricity market to function effectively and efficiently in all other countries using nuclear power, the insurance costs should be reported accurately and included in nuclear electricity costs without arbitrary government liability caps.

Keywords: energy journalism; life cycle analysis; nuclear energy; nuclear energy economics; nuclear insecurity; nuclear insurance; nuclear insurance subsidy; nuclear power; nuclear subsidy; sustainability (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:8:y:2016:i:12:p:1301-:d:84992

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