Antinuclear

The financial consequences of the Fukushima nuclear accident have been underestimated

Fukushima and the institutional invisibility of nuclear disaster, Ecologist, John Downer 20th December 2014 “……….Take, for example, the disaster’s economic impact. The intense focus on the health and safety effects of Fukushima has all but eclipsed its financial consequences, yet the latter are arguably more significant and are certainly less ambiguous.

Nuclear accidents incur a vast spectrum of costs. There are direct costs relating to the need to seal off the reactor; study, monitor and mitigate its environmental fallout; resettle, compensate and treat the people in danger; and so forth.

Over a quarter of a century after Chernobyl, the accident still haunts Western Europe, where government scientists in several countries continue to monitor certain meats, and keep some from entering the food chain.

Then there is an array of indirect costs that arise from externalities, such as the loss of assets like farmland and industrial facilities; the loss of energy from the plant and those around it; the impact of the accident on tourism; and so forth. The exact economic impact of a nuclear accident is almost as difficult to estimate as its mortality, and projections differ for the same fundamental reasons.

The evacuation zone around Fukushima – an area of around 966 sq km, much of which will be uninhabitable for generations – covers 3% of Japan, a densely populated and mountainous country where only 20% of the land is habitable in the first place.

They do not differ to the same degree, however, and in contrast to Fukushima’s mortality there is little contention that its financial costs will be enormous. By November of 2013, the Japanese government had already allocated over 8 trillion yen (roughly $80 billion or £47 billion) to Fukushima’s clean-up alone – a figure that excluded the cost of decommissioning the six reactors, a process expected to take decades and cost tens of billions of dollars.

Independent experts have estimated the clean-up cost to be in the region of $500 billion (Gunderson & Caldicott 2012). These estimates, moreover, exclude most of the indirect costs outlined above, such as the disaster’s costs to food and agriculture industries, which the Japanese Ministry of Agriculture, Forestries and Fisheries (MAFF) has estimated to be 2,384.1 billion yen (roughly $24 billion).

Of these competing estimates, the higher numbers seem more plausible. The notoriously conservative report of the Chernobyl Forum estimated that the cost of that accident had already mounted to “hundreds of billions of dollars” after just 20 years, and it seems unlikely that Fukushima’s three meltdowns could cost less.

Even if we assume that Chernobyl was more hazardous than Fukushima (a common conviction that is incrementally becoming more tenuous), then it remains true that the same report projected the 30-year costs cost to Belarus alone to be US$235 billion, and that Belarus’s lost opportunities, compensation payments and clean-up expenditures are unlikely to rival Japan’s.

Considering, for instance, Japan’s much higher cost of living, its indisputable loss of six reactors and decision to at least shutter the remainder of its nuclear plants, and many other factors. The Chernobyl reactor did not even belong to Belarus – it is in what is now the Ukraine.

The nuclear disaster liability swindle

To put these figures into perspective, consider that nuclear utilities in the US are required to create an industry – wide insurance pool of only about $12 billion for accident relief, and are protected against further losses by the Price-Anderson Act, by which the US Congress has socialised the costs of any nuclear disaster.

The nuclear industry needs such extraordinary government protection in the US, as it does in all countries, because – for all the authoritative, blue-ribbon risk assessments demonstrating its safety – the reactor business, almost uniquely, is unable to secure private insurance.

The industry’s unique dependence on limited liabilities reflects the fact that no economic justification for atomic power could concede the evitability of major accidents like Fukushima and remain viable or competitive.

As Mark Cooper, the author of a 2012 report on the economics of nuclear disaster has put it:

“If the owners and operators of nuclear reactors had to face the full liability of a Fukushima-style nuclear accident or go head-to-head with alternatives in a truly competitive marketplace, unfettered by subsidies, no one would have built a nuclear reactor in the past, no one would build one today, and anyone who owns a reactor would exit the nuclear business as quickly as possible.”

John Downer works at the Global Insecurities Centre, School of Sociology, Politics and International Studies, Bristol University.

This article is an extract from ‘In the shadow of Tomioka – on the institutional invisibility of nuclear disaster‘, Published by the Centre for Analysis of Risk and Regulation at the London School of Economics and Political Science. http://www.theecologist.org/News/news_analysis/2684383/fukushima_and_the_institutional_invisibility_of_nuclear_disaster.html

December 22, 2014 - Posted by Christina Macpherson | Uncategorized