John Cochrane, in a series of interesting observations on State Capacity Libertarianism, notes:
I don’t see just why nuclear power needs “state support,” rather than a clear workable set of safety regulations that are not excuses for anyone to stop any project.
Apart from the fact that our government created nuclear power at great expense and hurry, I would most of all cite the Price-Anderson Nuclear Indemnities Act of 1957 Here is Wikipedia:
The Act establishes a no fault insurance-type system in which the first approximately $12.6 billion (as of 2011) is industry-funded as described in the Act. Any claims above the $12.6 billion would be covered by a Congressional mandate to retroactively increase nuclear utility liability or would be covered by the federal government. At the time of the Act’s passing, it was considered necessary as an incentive for the private production of nuclear power — this was because electric utilities viewed the available liability coverage (only $60 million) as inadequate.
I am less clear on where the insurance industry stands on this matter today, but in general American society has become far more litigious, and it is much harder to build things, and risk-aversion and infrastructure-aversion have risen dramatically. Furthermore:
- Jurisdiction is automatically transferred to federal courts no matter where the accident occurred.
- All claims from the same incident are consolidated into one Federal court, which is responsible for prioritizing payouts and sharing funds equitably should there be a shortfall.
- Companies are expressly forbidden to defend any action for damages on the grounds that an incident was not their fault.
- An open-ended time limit is applied, which allows claimants three years to file a claim starting from the time they discover damage.
- Individuals are not allowed to claim punitive damages against companies.
So the odds are that without a Price-Anderson Act America’s nuclear industry would have shut down some time ago, with no real chance of a return.
More generally, I am not sure which level or kind of liability should be associated with “the free market,” especially when the risks in question are small, arguably ambiguous, but in the negative scenarios involve very very high costs. Which is then “the market formula”? That question does not make much sense to me, so it seems to me that, details of the Price-Anderson Act aside, all scenarios are by definition somewhat governmental.