India Nuclear News And Discussion

GuruPrabhu · Post by **GuruPrabhu** » 05 Apr 2011 08:46

somnath wrote:Interesting article by Dr Gopalakrishnan...Some relevant points, but some not so..

somnath-ji,

I have a lot of respect for Gopalakrishnan-ji, but he seems to be getting a bit carried away. I will not classify this phenomenon in the interest of thread peace, but you can imagine.

With this addition, the DAE projects India will have a total of about 655,000 MWe nuclear power generation by the year 2050. That will be 655 nuclear power reactors each of 1000 MWe capacity, strung along a total coastline of about 6000 kilometres the country has – about 109 six-reactor nuclear parks, spaced along the coast every 55 kilometres apart!

as someone said, one Jaitapur is such a problem and he wants 109 such problems! Unless, the problem is only if the nuke evil is of american variety ( or frecnch or russian).

GuruPrabhu · Post by **GuruPrabhu** » 05 Apr 2011 08:50

somnath wrote:Sanatnan-ji,

Absolutely on dot...Safety is the respnsibility of the Railway Board, which is also the operator! And yes, members of the board do get railway passes for life

Railways is also an anachronism of sorts - it needs an independent safety regulator now, in fact it needed one many years back...But its too much of a milch cow for "cow belt" politicians (and wannabe bengal CMs)...

Santanan-ji and somnath-ji,

It is pertinent to note that the railways routinely kill the citizens they serve. This is not some "probabilistic" death due to "possible" cancer. This is death dealt to them in one swift blow of colliding trains. The kicker is that the technology to prevent such collisions has been around for decades.

Has the Indian media held railways accountable with 24/7 coverage for WEEKS after a train collision? No, Sir, that privilege is reserved for an accident in far away lands like JAPAN.

vina · Post by **vina** » 05 Apr 2011 09:15

Indian Railways is a massive organisation impacting the lives of a very large number of people every day. Is there a Regulatory Authority to oversee the design, manufacture, construction, operation and maintenance work of Indian Railways?

OT here. But there is a need for an NTSB type organization tasked with the overall safety of all transport systems , that is independent of the operators. That reform is long overdue.

vina · Post by **vina** » 05 Apr 2011 09:23

arnab wrote:completely agree with somnath's points. Interestingly, the article is headlined as 'Stop the LWR imports', but what Dr. Gopalkrishnan calls a 'mad' idea is the fact that India will build 655 Fast Breeder reactors as part of the 2nd stage of the cycle. So, is he against imports or is he against the 3 stage cycle policy?

I think it is the right thing to call that Fast Breeder Program. If the idea is to generate enough Poo to kick start the 3rd stage, why do you need it, now that the civil nuclear agreement is in place. No one really wants to use MOX fuel abroad if there is an alternative, there are mountains of POO in spent fuel abroad, with no idea of what to do with them !

So it does make sense to import all that spent fuel under IAEA full safeguards, reprocess /or get it reprocessed abroad and get out the Poo and jump straight to the 3rd stage!

Why do you want to go through the 2nd stage ? The 3 stage plan was a means to use the indegenous uranium to get to the 3rd stage. Now that the import option is available and the Goras and Russians and Japanse and Koreans have generated mountains of Poo (waste), use it! Worth thought perhaps.

With my soup-e-rear YumBeeYea giri, it seems like the perfect solution to everyone.. Win-win, pareto efficient and all that stuff, which they teach in Neg-o-si-ya-shun to YumBeeYeas and Lawyers . Everyone is happy , an efficient solution is arrived at, trade blooms, YumBeeYeas make money, Abduls get Electricity and the waste Poo is shoveled away into reactors and is used to generate electricity!

Sanku · Post by **Sanku** » 05 Apr 2011 09:36

Safety board for IR--

http://civilaviation.nic.in/ccrs/commis ... afety.html

Its a body under Civil Aviation ministry

The Commission of Railway Safety, working under the administrative control of the Ministry of Civil Aviation of the Government of India, deals with matters pertaining to safety of rail travel and train operation and is charged with certain statutory functions as laid down in the Railways Act (1989), which are of an inspectorial, investigatory & advisory nature.

=======================

As a aside on the question of commercial regulatory authority in Railways, there were moves in 2001-2 time frame to drastically overhaul the railways including a regulatory body. This was done under Rakesh Mohan committee.

http://www.hindu.com/fline/fl1814/18140940.htm

The above is a Hindu link which as expected is a pro-left anti-NDA tirade on the matter (esp 2001-2 article)

somnath · Post by **somnath** » 05 Apr 2011 09:43

^^^The issue is technology...AHWR is a paper concept, yet...FBR too, is really far from being ready commercially - by the general track record, it will be decades before it is...Sourcing fuel is really not a problem anymore, as long as we dont mind IAEA safeguards (which we do, btw)...

vina · Post by **vina** » 05 Apr 2011 09:44

And I think if we import Poo and go direct to 3rd stage, we can give the White Pakis , the Australians and their Uranium the birdie!

somnath · Post by **somnath** » 05 Apr 2011 09:48

vina wrote: OT here. But there is a need for an NTSB type organization tasked with the overall safety of all transport systems , that is independent of the operators. That reform is long overdue.

Civil Aviation has DGCA, highways has NHAI - issue is of structural independence of these bodies..

GuruPrabhu · Post by **GuruPrabhu** » 05 Apr 2011 09:50

vina wrote:And I think if we import Poo and go direct to 3rd stage, we can give the White Pakis , the Australians and their Uranium the birdie!

vina-ji,

your idea has merit. All that poo sitting in fukushima, that is scaring DDM and BRF members alike, is manna from heaven that would make Bhabha happy. India should send a team to Japan to "rescue" that fuel and get all them neutrons for free onlee. Brilliant!

GuruPrabhu · Post by **GuruPrabhu** » 05 Apr 2011 09:53

somnath wrote:
vina wrote: OT here. But there is a need for an NTSB type organization tasked with the overall safety of all transport systems , that is independent of the operators. That reform is long overdue.
Civil Aviation has DGCA, highways has NHAI - issue is of structural independence of these bodies..

All these Babu Committees serving "safety" of this and that are completely useless. What is called for is giving them all the boot and having them lick the pavement on Rajpath. These jokers have held India back for decades and IMO, they are wahji-bull-cattle.

Sanku · Post by **Sanku** » 05 Apr 2011 10:21

So when a person is shown to not posses the basic rudimentary knowledge of physics to be able to talk about wave propagation in water without making a total fool of oneself, and many such basic boo boos to make any discussion above kindergarten level impossible -- such persons always get into attacking other persons who are better and actually know things.

Be it on the forum or outside.

Accha hai....

GuruPrabhu · Post by **GuruPrabhu** » 05 Apr 2011 10:23

Sanku wrote:So when a person is shown to not posses the basic rudimentary knowledge of physics to be able to talk about wave propagation in water without making a total fool of oneself, and many such basic boo boos to make any discussion above kindergarten level impossible -- such persons always get into attacking other persons who are better and actually know things.

Be it on the forum or outside.

Accha hai....

Mods, the attack above is from the eminent Sanku-ji. Please note.

I will continue to abide by my unilateral moratorium. But, please let me know - are you going to exercise your influence to shut the sanku-trap or give me permission to reply in kind? This one-way street of abuse is difficult to absorb for anyone.

chaanakya · Post by **chaanakya** » 05 Apr 2011 11:43

somnath wrote: Chanakaya-ji, the share of renewables has gone up recently mainly on account of wind and solar - on a pure carbon footprint impact, both are far inferior to nuclear...the reason why they have taken off are 1) pvt sector has been allowed and 2) tax breaks, huge tax breaks...If the government had allowed pvt sector operators in nuclear power, there would have been at least 10 projects nearing financial closure by now - everyone, from L&T to Reliance to Areva was interested...

Nuke power is no panacea, but it is the most viable long term alternative for base load power - to throw it away in a fit of panicky pique would be as stupid as not progressing manned space exploration because space shuttles keep blowing up...

Well you could be right on this. What is the carbon footprint of renewables and that of nuclear plant and how it is arrived at?

Are NPPs not claiming tax breaks etc?

I will also look up references to check this

somnath · Post by **somnath** » 05 Apr 2011 11:50

chaanakya wrote:Well you could be right on this. What is the carbon footprint of renewables and that of nuclear plant and how it is arrived at?

I had posted a study on the last page..
http://forums.bharat-rakshak.com/viewto ... start=3240

http://www.parliament.uk/documents/post/postpn268.pdf

Sanku · Post by **Sanku** » 05 Apr 2011 12:03

http://www.juancole.com/2011/04/japan-n ... ernational

Japan Nuclear Woes Galvanize Indian Protests

Has a link to video capturing the protests.

Also says

Meanwhile, Israeli scientists at the National Solar Energy Center in Israel are now arguing that with improvements in batteries and energy storage, the days when a country could generate 90% of its energy from renewable sources is much nearer than it had seemed only a few years ago.

Purush · Post by **Purush** » 05 Apr 2011 15:56

I had a few poochs, and I thought I'd ask here instead of going OT in the Japan Tsunami thread.

1. Are the anti-nuke posters advocating that we completely dismantle the nuclear power infrastructure in India (this is the impression that I get from the Japan thread) because its 'unsafe' and switch over to coal instead?

2. What about the reactors that produce the fissile material for our nuclear weapons? Are they somehow safer than the power generation reactors? Should those be shut down too?

3. Packees have been operating a nuclear reactor since the early '70s IIRC. If nuke reactors are so unsafe how come those clowns haven't collectively blown/irradiated themselves up in ~40 years?

Purush · Post by **Purush** » 05 Apr 2011 16:00

Sanku wrote:
Meanwhile, Israeli scientists at the National Solar Energy Center in Israel are now arguing that with improvements in batteries and energy storage, the days when a country could generate 90% of its energy from renewable sources is much nearer than it had seemed only a few years ago.

EDIT: 90% of Indian power from renewable sources is going to take quite a while.

Sanku · Post by **Sanku** » 05 Apr 2011 16:05

Purush wrote:I had a few poochs, and I thought I'd ask here instead of going OT in the Japan Tsunami thread.

1. Are the anti-nuke posters

There are no anti-Nuclear posters, and no one is asking the current Indian establishments to be dismantled.

Japan is of course a very different kettle of fish.

Purush · Post by **Purush** » 05 Apr 2011 16:08

So, nuclear power generation in India is quite safe then?
We can go ahead and build more reactors?

Sanku · Post by **Sanku** » 05 Apr 2011 16:12

Purush wrote:
EDIT: 90% of Indian power from renewable sources is going to take quite a while.

Of course, all the above statement means that, with time the renewable are indeed moving forward, all the standard caveats apply.

Personally I do not think that Indian mix is going to change at all.

We can go ahead and build more reactors?

As long as it is based on currently home developed reactor tech. Yes, moving on to 3 cycle.

With standard caveats around learning from various accidents being used, as well as other prior mentioned critical adjustments like

1) Do not store spent fuel, reprocess it
2) An independent watchdog over Nuke sector (a la CAG)

You will find all the points that have been made as much needed improvements to the current situation in the prior pages.

No it does not mean that anyone is anti-Nuke.

amit · Post by **amit** » 05 Apr 2011 16:18

Sanku wrote:There are no anti-Nuclear posters,

Really? And I've got a bridge to sell for cheap.

Japan is of course a very different kettle of fish.

Ignorance is bliss but stupid also. Fukushima is owned and run by TEPCO which is a private entity. They got hit by once in a lifetime double whammy and are scrambling to cope.

Let's assume that they've screwed up. So one company in the private sector does that and the entire Japan nuke industry is a different kettle of fish. What about the other generators like Kyushu, Chubu, Kansai and others whose plants survived despite the double whammy? Are they also a different kettle of fish?

There's a limit to simplifying and making grandiose and funny statements without the necessary knowledge.

amit · Post by **amit** » 05 Apr 2011 16:21

Sanku wrote:As long as it is based on currently home developed reactor tech.

You haven't yet proven why you think current home developed reactor tech (whatever that means) is safer than current Gen3 reactors. Your problem is other folks read what's there in the previous pages.

But then going by your logic I assume you advocate the shutting down of Russian reactors and a ban on buying future ones?

somnath · Post by **somnath** » 05 Apr 2011 17:24

Purush wrote:So, nuclear power generation in India is quite safe then?
We can go ahead and build more reactors?

Ahh Purush-ji, seems you have missed the whole gist of the conversation over the last many days...

the only nuke reactors that are "safe" are "home developed" PHWRs (pls dont refer to the Canadian background of our "home grown" tech, sacrilege!)..And also, the yet-to-be-seen FBRs and AHWRs...They are the only "safe" reactors ever known to man..Everything else is a "western snake oil"..How specifically, no one's really explained, but I think there is a divine active safety net over all Indian reactors that is kept perpetually "powered on" by divine invocations of our "nationalists"!

It also, AFAIK covers in its wake some non-Indian reactors selectively, viz, the older Tarapur BWRs and the "one-off" Russian LWRs...But thats it, the divine coverage doesnt extend beyond...But yes, the divine coverage also creates a 200 metre wall all along our coast to prevent any tsunami-related issues, and have a super-magnetic sub-terraineon ring below the ground to absorb earthquakes of 15 on the Richter...

And yes, we have also been just reminded that reprocessing spent fuel is like reprocessing milk in Anand - just scale up as and when you like...Mind you, only possible in India, with home-grown reprocessing tech that will be turned on in due course by nationalists invoking divine powers...And all of it overseen by an auditor..Oops, sorry, regulator...But CAG is an auditor, isnt it? Never mind, whats in a name

Aditya_V · Post by **Aditya_V** » 05 Apr 2011 17:45

Somnath Nice rant, but look at the Goras and thier stooges, articles below mention how when CHina develops somthing it is safe but if SDRE's do it it is unsafe.

Safe nuclear does exist, and China is leading the way with thorium

Fast breeder reactors are the least safe

And this Swaminathan Aiyer claims to be an expert in Nuclear Technology, only thing no one knows how.

GuruPrabhu · Post by **GuruPrabhu** » 06 Apr 2011 08:39

Aditya_V wrote:Somnath Nice rant ...

leaving aside other issues, at the very least we should distinguish between rant and satire.

somnath · Post by **somnath** » 06 Apr 2011 09:59

Aditya_V wrote:Somnath Nice rant, but look at the Goras and thier stooges, articles below mention how when CHina develops somthing it is safe but if SDRE's do it it is unsafe.

Safe nuclear does exist, and China is leading the way with thorium

Fast breeder reactors are the least safe

And this Swaminathan Aiyer claims to be an expert in Nuclear Technology, only thing no one knows how.

Aditya-ji,

Kuch to log kahenge..
Logon ka kaam hai kehna..
Chodo bekaar ki batoon mein kahin...
Beet na jaaye raina.....

Both these articles were posted here bofore I think...Swami Aiyar is a pop-economist, and sometimes tries to don the mantle of a pop-strategist...He is to be ignored safely, though in this case he is simply paraphrasing a piece by MV Ramana, the rebuttal of which by IGCAR has also been posted on this thread before...

I wouldnt worry about goras giving credit one way or the other...Wait till the first imported NPP contract is signed - hosannas on India's technological edge will start appearing all over...

Sanku · Post by **Sanku** » 06 Apr 2011 09:59

Aditya_V wrote:Somnath Nice rant, but look at the Goras and thier stooges, articles below mention how when CHina develops somthing it is safe but if SDRE's do it it is unsafe..

The number of rants post Fukushima has gone up exponentially.

GuruPrabhu · Post by **GuruPrabhu** » 06 Apr 2011 10:04

I agree, especially babu rants. Which is why it is important to relish a good satire.

somnath · Post by **somnath** » 06 Apr 2011 10:09

Purush wrote: Meanwhile, Israeli scientists at the National Solar Energy Center in Israel are now arguing that with improvements in batteries and energy storage, the days when a country could generate 90% of its energy from renewable sources is much nearer than it had seemed only a few years ago.

[/quote]

EDIT: 90% of Indian power from renewable sources is going to take quite a while.[/quote]
Its interesting, this whole thing of "storing electricity"...Many years, in fact almost 3 decades back, there was an article titled "Marketing Myopia", by Theodor Levit, in Harvard Business Review...It basically examined how companies could lose out by defning their businesses too narrowly, and win by defnining their businesses more imaginatively - it went on to become an HBR classic...I think it was the all-time best-selling HBR classic, till CK Prahlad/Gary Hamel's "Core Competence" essay overtook it...

Anyway, more to the point, one of the "futuristic" examples quoted by Levit was that of electricity generating companies and the potential of efficient electricity storage to dramatically alter business models in the sector...Now its been 30 years since, are we even close to storing enough electricity for one day's supply to a small town of 500,000 people? Or handle a grid failure for 7-8 hours for a city like Delhi?

When people slam the "lack of progress" in nuke, one should legitimately ask the question on the level of progress with the alternates, despite heavy investments (public AND private) in them....

GuruPrabhu · Post by **GuruPrabhu** » 06 Apr 2011 10:46

somnath wrote: When people slam the "lack of progress" in nuke, one should legitimately ask the question on the level of progress with the alternates, despite heavy investments (public AND private) in them....

Starting with Carter in the 70s, and continuing into the 80s, the US put in 100s of M$ (in then $$) into baseload solar R&D. The outcome was nada. The goal was to get to 10 MW. Even today, there is no baseload plant at even 1 MW.

Sanatanan · Post by **Sanatanan** » 06 Apr 2011 13:10

Perhaps the article linked below will qualify for being a "babu rant"

Switch off nuclear power By G V Ramakrishna, Published in The Economic Times on Apr 1, 2011.

Doesn't the title of the article mimic the exclamation "Off with their heads!" by the Queen of Hearts in Alice in Wonderland ?

However, here is what Dr. M.R Srinivasan has to say in his book "From Fission to Fusion" (Reprinted in 2008), about Shri G.V Ramakrishna:

From Page 166
[quote]
. . .
Although stopping {based on the 'only private-sector-funding-of-power-projects' policy advocated by the then Finance Minister Manmohan Singh and Finance Secretary Montek Singh Ahluwalia} Central government investments in coal and hydropower projects was bad enough, it was even more regrettable in the case of nuclear power projects where private funding was not available at the time. (Even now it is not available, though there is some interest.) It is unclear if the leadership of the DAE and the NPCIL did all they could because Manmohan Singh was well known to the DAE as a former member (finance) of the AEC and deputy chairman of the Planning Commission.

Eventually, G.V. Ramakrishna, chairman of the Securities and Exchange Board of India, was made a member of the Planning Commission and put in charge of energy. He took a strong anti-nuclear position and recorded a long note on why the country should not develop nuclear power. This position was at variance with the support for nuclear power that the Planning Commission had given, except for the period from 1990 onwards.
[/quote]

And again from pages 197 and 198:
[quote]
. . .
My predecessor as member (energy) in the Planning Commission was G.V. Ramakrishna, a former LAS officer whose last position was chairman of the Securities and Exchange Board of India. He had recorded a long note recommending that India discontinue the Kudankulam and other nuclear power projects. He believed that nuclear power was not required in India and that we should develop other available energy resources.

I analysed the objections and stated how it was necessary for India to develop nuclear power along with coal, hydro, gas and oil as well as solar, wind and biomass options. In a country of India's size and population, we had to develop all available energy sources, take a long-term view of depletion of conventional sources and concerns on greenhouse gases and minimize dependence on imports. Development of nuclear power had an important implication on energy self-reliance in the long run.
Dandavate agreed with me fully and suggested to the government a revival of the national nuclear power programme of PHWRs and also the import of some reactors from Russia. Prime Ministers Deve Gowda and Inder Gujral endorsed this view completely. There was some hesitation on the part of Finance Minister P. Chidambaram, but this was overcome after a number of discussions.
. . .
[/quote]

Purush · Post by **Purush** » 06 Apr 2011 13:31

Solar energy is definitely attractive in many ways, but there are several disadvantages (cost, space, efficiency etc) to it becoming a major source of power in India in the near future with the current tech. Also, it doesn't generate power for 12h a day and on cloudy/rainy days, so I doubt how attractive it would be financially for large scale operations.

Purush · Post by **Purush** » 06 Apr 2011 14:44

To reiterate my questions which have not been answered, especially #2:

Can some kind soul enlighten me?

2. What about the reactors that produce the fissile material for our nuclear weapons? Are they somehow safer than the power generation reactors? Should those be shut down too?

3. Packees have been operating a nuclear reactor since the early '70s IIRC. If nuke reactors are so unsafe how come those clowns haven't collectively blown/irradiated themselves up in ~40 years?

------------
Also, as an aside: we are under constant threat from hundreds of nuclear warheads pointed at us (cheen, pak, amirkhan etc). I am way more worried about the possibility of an Indian city getting nuked by some batshyte-crazy chinpaki jernail than a meltdown in an Indian nuclear plant. Realistically speaking, we can't do anything about those nukes pointed at us*, and I don't see anyone going hysterical about this ever-present threat.

So why this disproportionate hysteria (is that a redundant term

) over nuclear power generation?

Sure, there is always a finite risk that Indians will die if a local nuclear reactor goes packee, but on the other hand, there is a 100% guarantee that hundreds of thousands of Indians will die/suffer/remain in poverty due to lack of electricity. If nuclear power can reliably/efficiently/cheaply supply atleast a portion of our energy requirements and save/improve hundreds of thousands of lives, then why the takleef?

*yeah, yeah, massive retribution, second strike and all that; but a second strike on shanghai/slumabad is not going to un-irradiate me or bring me back to life after COK has been Dongfenged is it?

----------
Some one had posted about Jhairia coal fires in the other thread...apparently there is a similar one in the US too which has led to the evacuation/abandonment of the town of Centralia in Pennsylvania.

http://en.wikipedia.org/wiki/Centralia,_Pennsylvania

Sanku · Post by **Sanku** » 06 Apr 2011 15:16

So why this disproportionate hysteria (is that a redundant term ) over nuclear power generation?

Uh? No hysteria. Only simple calculation of various issues involved. Simple things like

Cost calculation per unit power at various points and associated issues.
Institutional setups to facilitate various aspects.
Possibility of dealing with disasters etc.

Also do answer your basic questions as to how PWHRs are safer, please look up various posts in prior pages, I am afraid no one line answer can be provided.

somnath · Post by **somnath** » 06 Apr 2011 17:40

Sanatanan wrote:Perhaps the article linked below will qualify for being a "babu rant"

Switch off nuclear power By G V Ramakrishna, Published in The Economic Times on Apr 1, 2011.

Sanatanan-ji, a whole generation of finance bureaucrats in the country developed ambivalent feelings towards nuclear power as an energy source...That includes, btw, Manmohan Singh himself, in many of his earlier avatars..The issue is that at least in terms of power generation, the nuclear establishment has been found to be consistently wanting on delivery...One can trace the reasons back to mnay factors - sanctions, underdeveoped industry et al, but finally execution remained below-par...Not only were reactors set-up with huge cost and time over-runs, they almost never operated at decent PLFs, and typically had below-par uptimes...

Having said that, the cut in nuke power investments in the early '90s was not a "targeted" cut, there was almost across-the-board cuts in public investments...One of the less-redeeming features of MMS's tenure as FM was the whole axiom that private investment would come in to bridge gaps in public investments once the sectors were opened up for the pvt sector...Didnt happen at all....Things got rectified subsequently, but a few years were wasted...

The other point also was, for a long time, availability of fuel...What was the point in setting up new reactors, or higher rated reactors, if there wasnt enough uranium in the country even for the existing reactors? The amount of diplomatic energy spent to periodically source fuel for a small Tarapur reactor typically destroyed any residual interest...

All of this obviously has changed with the nuclear deal...

Purush wrote:To reiterate my questions which have not been answered, especially #2:

Purush-ji, serioulsy there is no answer beyond divine invocations...(BTW, there is really no hard-and-fast separation between fissile material generating and power generating reactors - all nuclear reactors can generate fissile material when operated in a certain configuration...)....If you wait for some more time, I am reasonably certain that some of the philosopher-economist-wannabe-scientist-uber-nationalists will come up with some real good references to the Rigveda for the answers!

Lalmohan · Post by **Lalmohan** » 06 Apr 2011 18:39

meanwhile, somewhere on the other side of the moon...John Bauer
the contamination has spread

Sanku · Post by **Sanku** » 06 Apr 2011 19:56

Lalmohan wrote:meanwhile, somewhere on the other side of the moon...John Bauer
the contamination has spread

Is that you Lalbrof? Third from right that is?

abhishek_sharma · Post by **abhishek_sharma** » 07 Apr 2011 06:19

Gambling with the Planet: Joseph E. Stiglitz

http://www.project-syndicate.org/commen ... 37/English

The consequences of the Japanese earthquake – especially the ongoing crisis at the Fukushima nuclear power plant – resonate grimly for observers of the American financial crash that precipitated the Great Recession. Both events provide stark lessons about risks, and about how badly markets and societies can manage them.

Of course, in one sense, there is no comparison between the tragedy of the earthquake – which has left more than 25,000 people dead or missing – and the financial crisis, to which no such acute physical suffering can be attributed. But when it comes to the nuclear meltdown at Fukushima, there is a common theme in the two events.

Experts in both the nuclear and finance industries assured us that new technology had all but eliminated the risk of catastrophe. Events proved them wrong: not only did the risks exist, but their consequences were so enormous that they easily erased all the supposed benefits of the systems that industry leaders promoted.

Before the Great Recession, America’s economic gurus – from the head of the Federal Reserve to the titans of finance – boasted that we had learned to master risk. “Innovative” financial instruments such as derivatives and credit-default swaps enabled the distribution of risk throughout the economy. We now know that they deluded not only the rest of society, but even themselves.

These wizards of finance, it turned out, didn’t understand the intricacies of risk, let alone the dangers posed by “fat-tail distributions”– a statistical term for rare events with huge consequences, sometimes called “black swans.” Events that were supposed to happen once in a century – or even once in the lifetime of the universe – seemed to happen every ten years. Worse, not only was the frequency of these events vastly underestimated; so was the astronomical damage they would cause – something like the meltdowns that keep dogging the nuclear industry.

Research in economics and psychology helps us understand why we do such a bad job in managing these risks. We have little empirical basis for judging rare events, so it is difficult to arrive at good estimates. In such circumstances, more than wishful thinking can come into play: we might have few incentives to think hard at all. On the contrary, when others bear the costs of mistakes, the incentives favor self-delusion. A system that socializes losses and privatizes gains is doomed to mismanage risk.

Indeed, the entire financial sector was rife with agency problems and externalities. Ratings agencies had incentives to give good ratings to the high-risk securities produced by the investment banks that were paying them. Mortgage originators bore no consequences for their irresponsibility, and even those who engaged in predatory lending or created and marketed securities that were designed to lose did so in ways that insulated them from civil and criminal prosecution.

This brings us to the next question: are there other “black swan” events waiting to happen? Unfortunately, some of the really big risks that we face today are most likely not even rare events. The good news is that such risks can be controlled at little or no cost. The bad news is that doing so faces strong political opposition – for there are people who profit from the status quo.

We have seen two of the big risks in recent years, but have done little to bring them under control. By some accounts, how the last crisis was managed may have increased the risk of a future financial meltdown.

Too-big-to fail banks, and the markets in which they participate, now know that they can expect to be bailed out if they get into trouble. As a result of this “moral hazard,” these banks can borrow on favorable terms, giving them a competitive advantage based not on superior performance but on political strength. While some of the excesses in risk-taking have been curbed, predatory lending and unregulated trading in obscure over-the-counter derivatives continue. Incentive structures that encourage excess risk-taking remain virtually unchanged.

So, too, while Germany has shut down its older nuclear reactors, in the US and elsewhere, even plants that have the same flawed design as Fukushima continue to operate. The nuclear industry’s very existence is dependent on hidden public subsidies – costs borne by society in the event of nuclear disaster, as well as the costs of the still-unmanaged disposal of nuclear waste. So much for unfettered capitalism!

For the planet, there is one more risk, which, like the other two, is almost a certainty: global warming and climate change. If there were other planets to which we could move at low cost in the event of the almost certain outcome predicted by scientists, one could argue that this is a risk worth taking. But there aren’t, so it isn’t.

The costs of reducing emissions pale in comparison to the possible risks the world faces. And that is true even if we rule out the nuclear option (the costs of which were always underestimated). To be sure, coal and oil companies would suffer, and big polluting countries – like the US – would obviously pay a higher price than those with a less profligate lifestyle.

In the end, those gambling in Las Vegas lose more than they gain. As a society, we are gambling – with our big banks, with our nuclear power facilities, with our planet. As in Las Vegas, the lucky few – the bankers that put our economy at risk and the owners of energy companies that put our planet at risk – may walk off with a mint. But on average and almost certainly, we as a society, like all gamblers, will lose.

That, unfortunately, is a lesson of Japan’s disaster that we continue to ignore at our peril.

Joseph E. Stiglitz is University Professor at Columbia University and a Nobel laureate in Economics. His latest book, Freefall: Free Markets and the Sinking of the Global Economy, is available in French, German, Japanese, and Spanish.

Amber G. · Post by **Amber G.** » 07 Apr 2011 06:51

^^^ From above, just a little different emphasis: ( The article is nice IMO)
After

..Too-big-to fail banks, and the markets in which they participate, now know that they can expect to be bailed out if they get into trouble...

and

The nuclear industry’s very existence is dependent on hidden public subsidies – costs borne by society in the event of nuclear disaster, as well as the costs of the still-unmanaged disposal of nuclear waste.

Indeed these things are serious, but then comes:

For the planet, there is one more risk, which, like the other two, is almost a certainty: global warming and climate change. If there were other planets to which we could move at low cost in the event of the almost certain outcome predicted by scientists, one could argue that this is a risk worth taking. But there aren’t, so it isn’t.

The costs of reducing emissions pale in comparison to the possible risks the world faces.

Something like 24,000 deaths per year due to fuel exhausts in US alone makes it prudent to look at the whole energy situation in perspective.

somnath · Post by **somnath** » 07 Apr 2011 07:19

^^^^Its hard to ignore Joe Stiglitz, he is one of the last of the vanishing breed of "public intellectuals" in the world..

And he makes a seemingly valid point on nuclear power per se...Unfortunately though, he is basing it on an insufficient amount of data, IMO...

The basic point he makes is this - black swan events in nukes (like acidents), cause outsize losses, and "hypotheticaly" almost necessarily has to be picked up substantially by the state...So does it it make sense to have "nuke power" at all? The issues are really two-fold:

1. How much are the losses as a result of such nuke "black swans"? And how do the numbers compare with the losses due to enhanced carbon footprint and other industrial disasters on fossil fuels?

2. Does the "payback" have to necessarily happen only on the back of the govt?

On the first question, taking Chernobyl as an example, cost estimates range from 4 billion dollars to 20-25 billion dollars...And Chernobyl was perhaps the blackest of all black swans..To put things in perspective, the BP payout to the US govt, is estimated to be 30 billion dollars in various forms..Now, what is the cost of carbon emissions from coal-fired thermal plants? There are various studies, but the sheer gap in the "total generation costs" depicted by various estimates would show it up in the tens of billions of dollars every year...(there was one study that I had posted above)...

So there goes..the costs of industrial accidents are going to only go higher - whether oil exploration, mining, or nuke power...And costs of emmissions are going to go even higher...Therefore, are we to junk a technology because of a fear of the unknown?