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(originally published by Booz & Company)


An Immodest Proposal for the Next Big Fuel

If nuclear energy represents a genuine way to deal with climate change, let’s test it through a massive joint project involving the U.S., Japan, France, and China.

As the search intensifies for alternatives to carbon-emitting fuels, more voices are calling for a revival of nuclear energy. But nuclear power isn’t like other forms of energy; the nature of the technology and the levels of investment required demand that it be developed differently than other kinds of fuels. The problem with nuclear power is not primarily that it’s dangerous, or even that it’s unfeasible, but that its requisite scale and scope are dauntingly large. To gain the benefits of nuclear power, we would have to think big — bigger than the way most decision makers are thinking about energy projects these days.

Most nuclear operation is currently managed by corporations or publicly held utility companies. But if the intent of a nuclear energy program is to significantly reduce greenhouse gases, then a company, no matter how well managed and funded, is not large enough to manage it. Even national governments are too small. Climate change is a global problem, and it requires genuinely international solutions.

Here, then, is an appropriately large-scale — one might say appropriately immodest — proposal. The United States, France, and Japan should form a coalition to invest intellectual, financial, and manufacturing resources to build nuclear energy capacity. They should locate these projects in China, where new nuclear plants would be designed to replace a major portion of the dirty coal plants that the Chinese government is currently building or operating. This proposal would also reduce China’s oil imports, thus freeing up energy resources elsewhere in the world. And the whole project should be seen as a model for international investment in global resource use.

To justify this idea, we have to dispassionately consider the benefits of nuclear energy. First, generating electric energy from plutonium is clean. Of course, carbon emissions are released in mining, transporting, and processing uranium, but once a nuclear plant has been operating for six or seven years, the energy is carbon-free. Second, nuclear energy is good for managing so-called base-load costs. Because electric power is costly to store, it typically cannot be transferred from times of low demand to times of high demand; this makes wind and solar power generation, with their unpredictable flows of energy, more costly and difficult to manage. By contrast, nuclear power is steady and reliable, with little need for storage to modulate variable rates of generation. Third, although it takes billions of dollars to get a nuclear power plant up and running, it is relatively cheap to operate thereafter. It can supply electricity at a rate that’s competitive with coal, gas, and oil.

To be sure, nuclear energy presents its share of problems, but most of these problems become much less difficult when addressed at a major scale. For example, nuclear plants have typically required massive government subsidies because of the huge expense of building them; at a large scale, the costs per kilowatt go down. Some problems are inherently political: when one factors in the delays, cost overruns, and not-in-my-backyard opposition that is almost inevitable in the U.S., it’s unlikely that nuclear power could ever be cost-effective in the States. Nuclear power is also hampered by the cost of insurance and the opportunity costs of stranding capital in plants that may take 10 or 15 years to go from initial licensing to actual delivery. The problems associated with storing nuclear waste have yet to be resolved. And the danger of proliferation also persists; nuclear plants can be adapted into weapons production facilities, at least theoretically.

Such problems are beyond the scope of corporations, as well as most governments. But the problems start to seem far more manageable when looked at from an international perspective.

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