Resource Use under Climate Stabilization: Can Nuclear Power Provide Clean Energy?

Authors


  • Ujjayant Chakravorty, Professor and Canada Research Chair, Alberta School of Business and Department of Economics, 4-30L Business, University of Alberta, Edmonton, Alberta, Canada T6G 2R6 (ujjayant.chakravorty@ualberta.ca). Bertrand Magne, OECD Environment Directorate, Paris, France (bertrand.magne@oecd.org). Michel Moreaux, Emeritus Professor and IDEI Researcher, Toulouse School of Economics, University of Toulouse, Toulouse, France (michel.moreaux@tse-fr.eu).

  • Ujjayant Chakravorty thanks the Social Sciences and Humanities Research Council (SSHRC) for generous research support. The authors would like to thank Roger Guesnerie and three anonymous referees for very helpful comments that significantly improved the paper, and participants in the College de France Conference on Managing Climate Change, Paris, June 2010. The viewpoints expressed in this paper are solely those of the authors; they do not represent those of the OECD and its member countries.

Abstract

The long-term goal of the Intergovernmental Panel on Climate Change (IPCC) is the stabilization of carbon concentration in the atmosphere. In this paper, we impose a carbon target concentration on a partial equilibrium model of the global energy sector. Specifically, we ask whether nuclear power can provide carbon-free energy as fossil fuel resources become costly due to scarcity and externality costs. We find that nuclear power can reduce the cost of generating clean energy significantly and relatively quickly. However, beyond a few decades the role of nuclear power may be considerably reduced as uranium becomes scarce and renewables become economical. The cost of carbon when nuclear power supplies a significant share of energy is much lower than that of other studies. A policy implication is that current political and regulatory impediments to the expansion of nuclear generation may prove to be costly if large volumes of clean energy need to be supplied over a relatively short period of time.

Ancillary