IN OTHER WORDS...:

The Jane Fonda Effect (STEPHEN J. DUBNER and STEVEN D. LEVITT, 9/16/07, NY Times Magazine)

[T]he big news is that nuclear power may be making a comeback in the United States. There are plans for more than two dozen new reactors on the drawing board and billions of dollars in potential federal loan guarantees. Has fear of a meltdown subsided, or has it merely been replaced by the fear of global warming?

The answer may lie in a 1916 doctoral dissertation by the legendary economist Frank Knight. He made a distinction between two key factors in decision making: risk and uncertainty. The cardinal difference, Knight declared, is that risk — however great — can be measured, whereas uncertainty cannot.

How do people weigh risk versus uncertainty? Consider a famous experiment that illustrates what is known as the Ellsberg Paradox. There are two urns. The first urn, you are told, contains 50 red balls and 50 black balls. The second one also contains 100 red and black balls, but the number of each color is unknown. If your task is to pick a red ball out of either urn, which urn do you choose?

Most people pick the first urn, which suggests that they prefer a measurable risk to an immeasurable uncertainty. (This condition is known to economists as ambiguity aversion.) Could it be that nuclear energy, risks and all, is now seen as preferable to the uncertainties of global warming?

France, which generates nearly 80 percent of its electricity by nuclear power, seems to think so. So do Belgium (56 percent), Sweden (47 percent) and more than a dozen other countries that generate at least one-fourth of their electricity by nuclear power. And who is the world’s single largest producer of nuclear energy?

Improbably enough, that would be . . . the United States. Even though the development of new nuclear plants stalled by the early 1980s, the country’s 104 reactors today produce nearly 20 percent of the electricity the nation consumes. This share has actually grown over the years along with our consumption, since nuclear technology has become more efficient. While the fixed costs of a new nuclear plant are higher than those of a coal or natural-gas plant, the energy is cheaper to create: Exelon, the largest nuclear company in the United States, claims to produce electricity at 1.3 cents per kilowatt-hour, compared with 2.2 cents for coal.

Nuclear enthusiasm may be on the rise, but it can always be dampened by mention of a single word: Chernobyl. The 1986 Ukrainian disaster killed at least a few dozen people directly and exposed millions more to radiation. A new study by the economists Douglas Almond, Lena Edlund and Marten Palme shows that as far away as Sweden, in areas where the wind carried Chernobyl fallout, babies who were in utero at the time later had significantly worse school outcomes than other Swedish children.

But coal, too, has its costs, even beyond the threat of global warming. In the United States, an average of 33 coal miners are killed each year. In China, more than 4,700 coal miners were killed last year alone — a statistic that the Chinese government has trumpeted as a vast improvement.

The accident at Three Mile Island ruined one of the two reactors on the site. The other one, operated by Exelon, continues to quietly churn out electricity for 800,000 customers. Outside the plant’s training center is a small vegetable garden enclosed in chain-link fencing: corn, tomatoes, beets. Its output is monitored to detect radiation. Although the garden was badly in need of watering during a recent visit, the vegetables were otherwise fine.

...the key to successful public policy is replacing hysterias that are harmful with ones that are helpful.

Posted by Orrin Judd at September 15, 2007 4:03 PM