another study assessed the cost of this oil spill at approximately U.S. $2.8 billion
[27]. In these studies, Cohen limited her assessment to the costs incurred by
southcentral Alaska’s fisheries, while Carson assessed the population’s
willingness-to-pay to restore the lost passive use of the damaged environment.
Finally, the climate change literature also exhibits large discrepancies. In a
review published in 2009, Tol shows that there is little agreement on the long term
effects of climate change. While some authors [28] predict an overall small positive
effect due to the heating of cold regions, others predict dramatic consequences [29].
This overview highlights the fact that the uncertainty pertaining to cost estimates
can originate from several sources.
4 Uncertainties and Mitigation Policies
If these discrepancies are not peculiar from an economic standpoint, it is
nonetheless interesting to try and understand why they occur. In basic economic
theory, costs are often defined as anything that causes a loss of welfare [30]. The
cost of a nuclear accident can thus be defined as the gap between the welfare levels
obtained with and without its occurrence. This theoretical definition induces
divergence in the assessments: the consequences of an accident—direct or induced
by mitigation countermeasures—are so numerous and intricate that it is impossible
to be sure that all consequences have been accounted for properly. Studies differ
first in their assessment of the consequences of the accidents, and then on the
monetary valuation of these consequences.
4.1 Cost Assessments Do not Speak the Same Language
First, it seems obvious that results will be different if the type and location of
accidents assessed are different. Nuclear plants are highly sophisticated, so there is a
large panel of possible accidents which do not have the same consequences.
Likewise, nuclear plants are located in areas which are not equally densely populated [31]. As an example from Table 1, Hohmeyer’s study calculates the external
cost of a hypothetical Chernobyl-like accident in the Biblis nuclear plant (Germany)
in 1990. The IRSN study calculates the social cost
10 of a hypothetical DCH
11
nuclear accident in France in 2025. The scopes of these two studies are radically
10
The private cost of an accident is the cost incurred by the utility; the external cost is the cost that
will not be incurred by the firm because either a legal liability threshold exists, or the firm is
limited by the total worth of its assets. The social cost of the accident is the sum of private and
external costs.
11
The IRSN describes a Direct Containment Heating accident, which consists in a direct heating of
gases within the containment vessel.
The Economic Assessment of the Cost of Nuclear Accidents
89
[27]. In these studies, Cohen limited her assessment to the costs incurred by
southcentral Alaska’s fisheries, while Carson assessed the population’s
willingness-to-pay to restore the lost passive use of the damaged environment.
Finally, the climate change literature also exhibits large discrepancies. In a
review published in 2009, Tol shows that there is little agreement on the long term
effects of climate change. While some authors [28] predict an overall small positive
effect due to the heating of cold regions, others predict dramatic consequences [29].
This overview highlights the fact that the uncertainty pertaining to cost estimates
can originate from several sources.
4 Uncertainties and Mitigation Policies
If these discrepancies are not peculiar from an economic standpoint, it is
nonetheless interesting to try and understand why they occur. In basic economic
theory, costs are often defined as anything that causes a loss of welfare [30]. The
cost of a nuclear accident can thus be defined as the gap between the welfare levels
obtained with and without its occurrence. This theoretical definition induces
divergence in the assessments: the consequences of an accident—direct or induced
by mitigation countermeasures—are so numerous and intricate that it is impossible
to be sure that all consequences have been accounted for properly. Studies differ
first in their assessment of the consequences of the accidents, and then on the
monetary valuation of these consequences.
4.1 Cost Assessments Do not Speak the Same Language
First, it seems obvious that results will be different if the type and location of
accidents assessed are different. Nuclear plants are highly sophisticated, so there is a
large panel of possible accidents which do not have the same consequences.
Likewise, nuclear plants are located in areas which are not equally densely populated [31]. As an example from Table 1, Hohmeyer’s study calculates the external
cost of a hypothetical Chernobyl-like accident in the Biblis nuclear plant (Germany)
in 1990. The IRSN study calculates the social cost
10 of a hypothetical DCH
11
nuclear accident in France in 2025. The scopes of these two studies are radically
10
The private cost of an accident is the cost incurred by the utility; the external cost is the cost that
will not be incurred by the firm because either a legal liability threshold exists, or the firm is
limited by the total worth of its assets. The social cost of the accident is the sum of private and
external costs.
11
The IRSN describes a Direct Containment Heating accident, which consists in a direct heating of
gases within the containment vessel.
The Economic Assessment of the Cost of Nuclear Accidents
89