Principles of Economics and Nuclear Reactors

I read a great essay recently that does a fantastic job of explaining why we should be pushing to use much more nuclear energy than we do at present:

Nuclear energy has been quietly producing carbon-free energy for decades, but most don’t know that it accounts for 20% of the US’s electricity and over half of its carbon-free electricity. It’s been the underdog energy source—rarely celebrated, or worse, villainized, and deeply underinvested in.
The war in Ukraine and subsequent global energy crisis, alongside longstanding concern around climate change, has policymakers grappling with how to ensure energy is reliable, abundant, and carbon-free. Nuclear energy is the only energy source that solves for all three.
So why aren’t we building more?

Oh, and by the way, do take a look at the artist who made the picture at the start of the essay!

I hope you read the whole thing, and I hope that you, like me, are also a fan of using much more nuclear energy in the years to come. If you aren’t, maybe this essay will convince you to at least read more about the issue.

But this essay is also a great way to brush up on your knowledge of the principles of economics!

  1. Take a look at how the author highlights the efficiency of nuclear energy in comparison to other sources. The technical term for the energy industry is “capacity factor”.
  2. How safe (or dangerous, if you prefer to be clear about framing effects) is nuclear fuel? Well, shouldn’t one always be asking relative to what? And if you do ask that question, take a look at this chart for an answer!
  3. Do incentives matter? You bet they do!
  4. Does government support matter? Yes, and yes.
  5. Don’t externalities matter? You bet they do.

Do read the whole thing, please. There’s lots of nice little nuggets in the essay that make it a very enjoyable read, including an xkcd cartoon, great resources that you can add to your bookmarks folder and lots of statistics and links to very interesting reads (Noah’s post on construction productivity is a personal favorite).

But most importantly, if you are a student of economics, get into the habit of reading stuff and deploying your knowledge of the principles of economics. It makes the read more interesting, more thought-provoking and best of all, more understandable.