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Quantifying the social costs of nuclear energy: Perceived risk of accident at nuclear power plants

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  • Huhtala, Anni
  • Remes, Piia

Abstract

The preferences expressed in voting on nuclear reactor licenses and the risk perceptions of citizens provide insights into social costs of nuclear power and decision making in energy policy. We show analytically that these costs consist of disutility caused by unnecessary anxiety - due to misperceived risks relating to existing reactors - and where licenses for new nuclear reactors are not granted, delayed or totally lost energy production. Empirical evidence is derived from Finnish surveys eliciting explicitly the importance of risk perceptions on preferences regarding nuclear power and its environmental and economic impacts. We show that the estimated marginal impact of a high perceived risk of nuclear accident is statistically significant and that such a perception considerably decreases the probability of a person supporting nuclear power. This result holds across a number of robustness checks including an instrumental variable estimation and a model validation by observed voting behavior of the members of Parliament. The public's risk perceptions translate into a significant social cost, and are likely to affect the revenues, costs and financing conditions in the nuclear power sector in the future.

Suggested Citation

  • Huhtala, Anni & Remes, Piia, 2017. "Quantifying the social costs of nuclear energy: Perceived risk of accident at nuclear power plants," Energy Policy, Elsevier, vol. 105(C), pages 320-331.
  • Handle: RePEc:eee:enepol:v:105:y:2017:i:c:p:320-331 DOI: 10.1016/j.enpol.2017.02.052
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    More about this item

    Keywords

    Economics; Vote; Nuclear accident; Subjective risks; Probabilities; Instrumental variable;

    JEL classification:

    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • C26 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Instrumental Variables (IV) Estimation
    • C83 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Survey Methods; Sampling Methods
    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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