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.
The disaster at the Fukushima-Daiichi nuclear power plant has highlighted the importance of nuclear energy to Japan and the power long wielded by the nuclear sector. But that influence now is sure to wane, to the relief of opponents who have fought for years to check nuclear’s rapid growth.