The Catastrophic Downside Risk of Nuclear, Oil, Gas, and Coal

By Chris de Morsella on April 19, 2011 10 Comments BP Oil spill, chris de morsella, Climate Change, Deepwater Horizon, Energy system, Exxon Valdez, Fukushima-Daiichi, global warming, Green Economy Post, Gulf of Mexico, Indian Point Nuclear Power Plant, Japan, New York City, nuclear accident, nuclear energy, nuclear meltdown, oil spill, Price-Anderson Act, risk assessment, Yukio Edano

Energy systems need to also be measured according to the potential risks associated with them in the advent of failure. And the actuarial costs of these risks need to be better understood and included into the market price for the energy that these systems produce. This post examines this catastrophic downside risk of nuclear and fossil energy focusing on the recent events in Japan and on the BP oil spill as two recent examples of hugely expensive catastrophes. It poses the question why should the taxpayers and the public bear the burden of these costs in this manner artificially lowering the price these energy sectors are thus able to charge for their products.