Eliminate the nuclear power plant liability cap
If you think the $75 million liability cap on oil drilling disasters is bad, consider the disgusting and scary Price-Anderson Act, which almost completely indemnifies all nuclear power plants in America if they melt down.
Nuclear plants are heavily subsidized by the federal government because their disaster liability is capped at an extremely low level. This saves nuclear power plant owners a tremendous amount on insurance costs. A Chernobyl-like nuclear accident in America would cost about $600 billion. But each American nuclear power plant is required to purchase only $300 million in liability insurance! That’s one-half of one-tenth of one percent of the likely damage! A $600,000,000,000 disaster minus $300,000,000 in compensation = a $599,700,000,000 “externality.”
If an accident occurs, each of America’s 103 nuclear power plants would be required to pay less than $100 million. Some would simply go bankrupt rather than pay. But, even if all paid, the total industry liability would be capped at $10 billion. $600,000,000,000 – $10,000,000,000 = $590,000,000,000 in unpaid damages.
Who would pay this $590 billion? You and I. If there’s a serious nuclear disaster in America, you and I will be on the hook for roughly $600 billion in compensation and clean-up costs.
Posted by James on Monday, May 17, 2010