Nuclear Deal

As outlined in the MIT interdisciplinary report on “The Future of Nuclear Power” I think it’s likely that the solution to climate change problem involves greater quantities of nuclear-generated electricity and very likely that the solution involves a greater proportion of energy needs being met through nuclear power. That said, John Hood’s view on how this might come about seems odd:

Nuclear power seems part of what I see as an emerging Left-Right-Center “deal” on climate change. No, I haven’t given into alarmism. I still think the projections of global catastrophe from human-induced warming are unwarranted based on what I’ve read and heard. But if you don’t seen the current drift of the debate, you aren’t paying close attention. The elements of the deal might be something like this: 1) continue to remove restrictions on nuclear power as a future source of household energy; 2) raise taxes on motor fuels by a significant amount, fully offset by reductions in other taxes (state sales or income taxes would be my preference, as I’d prefer state rather than federal action here), which would discourage fossil fuel use; 3) spend the tax proceeds on improving highways and bridges, thus alleviating the nation’s worsening congestion (which has a cost in air quality), and funding some new research into alternative energies; and 4) change state and local land-use regulations to allow more mixed-use developments that reduce the length of work commutes and make non-auto travel at least a little more likely.

What Hood’s left off here is precisely the pro-nuclear policy shift liberals would be most likely agree to. Namely, a tax not on motor fuels but on carbon emissions. If you tax gasoline but not carbon per se then there’s a large risk that gasoline will be displaced by electricity as the power of choice for cars, and the electricity will be generated by coal power plants. That would be a step backwards rather than a step forward. A carbon tax, by contrast, avoids that trap. And since a carbon tax would de facto assistance to all non-coal, non-gas forms of electricity generation, it would be a substantial form of assistance to the operators of nuclear power plants. Current law, in effect, forces the nuclear power industry to internalize a far larger proportion of the environmental hazards associated with its production than the coal industry is forced to internalize. Thus, as Belle Waring writes, “If, after the implementation of a reasonable, revenue-neutral carbon tax, nuclear power would be competitive without subsidies, then I would be happy to support nuclear power.”

But, like Belle, if we’re going to have the government subsidize something, I think we should subsidize something truly clean like solar or wind power. Carbon taxes are, however, a form of de facto subsidy to anything that’s not coal, and there’s your “deal” right there. On top of that, obviously, there are a lot of technical and regulatory issues I’m not really expert to discuss, but I would recommend the MIT report if you’re interested in one long, dull, earnest effort to serve as an honest broker on those issues.