Cato Policy Analysis No. 36 April 17, 1984

Policy Analysis

The Price-Anderson Act:
Is It Consistent sith a Sound Energy Policy?

by Barry P. Brownstein

Barry P. Brownstein is an associate professor of economics and director of the Bureau of Business Research at the Uni- versity of Baltimore.


Executive Summary

Of all the seemingly endless debates in American society, certainly one of the most needless has been the debate over the safety and economic viability of nuclear energy. Citing statistics and using arguments that range from sophisticated sophistry to incredible idiocy, a vast army of politicians, intellectuals, academics, and lobbying groups has been debating this issue for almost three decades. In all, the debate has been an excellent example of Thomas Sowell's point that sometimes the only ultimate validation of an idea is if it sounds plausible enough to people or to the right People.[1]

While the debate goes on, usually centered on the role of government, few individuals seem to realize that nuclear power might not exist in the absence of government intervention. The conservative, usually in favor of more nuclear power, generally sees the problem as a surfeit of regulation.[2] The liberal, generally opposed to nuclear power, sees the problem as one of too little governmental regulation of this dangerous power source and reacts with such suggestions as Ralph Nader's proposal to hire one million government guards for nuclear power plants.[3]

There are many forms of government subsidization of the nuclear power industry. These subsidies include the sponsorship of research, enrichment of fuels, and disposal of nuclear wastes. Through payments by the nuclear utilities into a trust fund, the government is to take possession of all used fuel by 1998.[4] In spite of its free-market rhetoric, the Reagan administration has favored extending financial backing to the nuclear industry, including the Clinch River Breeder Reactor. As Richard Holwill of the Heritage Foundation writes, the Reagan administration "gives the appearance of being for a free market in all things conventional, but virtually socialist on nuclear power."[5]

These subsidies do not necessarily establish the nonviability of the nuclear power industry, in that it is conceivable that these functions could be taken over by private industry. However, the one government-furnished privilege that the nuclear industry could find it hardest to live without is the Price-Anderson Act's limitation on a nuclear power plant's liability in case of an accident.

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