Abstract

Nuclear energy is potentially a substantial contributor to meeting growing global energy needs while generating very low greenhouse gas emissions, little air pollution, and small solid waste volumes. While these environmental benefits make nuclear power attractive with respect to one of the three pillars of sustainable development ñ the environmental pillar ñ nuclear power is often viewed as less attractive with respect to the other two pillars, i.e., the economic and social pillars. This paper will focus on the economic pillar, and assess nuclear powerís economics and its prospective contribution to sustainable development. As sustainable development is a dynamic concept and there exists no single benchmark against which nuclear powerís economics can be assessed, the paper presents results based on a comparative approach.

Economics entails more than costs. It includes a series of factors ranging from the perception of financial risks and liabilities to resource availability, supply security and regulatory policy, all of which, in addition to costs, influence the decisions of investors. Moreover, there are those cost factors (and benefit considerations) that are referred to as externalities and are not included in standard cost accounting schemes, nor incorporated in market prices for energy services. These include, in particular, environmental and health damages resulting from energy production and use. Meeting the objectives of sustainable energy development increasingly demands the internalization of such externalities and the adoption of full cost accounting schemes. The recent entry into force of the Kyoto Protocol partly internalizes externalities associated with the combustion of fossil fuels. On balance, the economics of technologies and associated fuel cycles, such as nuclear power, with inherently low greenhouse gas emissions and/or a high share of internalization of their externalities should provide a competitive edge in the market place and at the same time contribute to sustainable development.