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Matt Ridley is the author of provocative books on evolution, genetics and society. His books have sold over a million copies, been translated into thirty languages, and have won several awards.

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Nuclear crony capitalism

As a general rule, if George Monbiot agrees with you, start worrying you may be wrong. The Fukushima nuclear crisis has made Monbiot a fan of nuclear power, at just the time when my doubts have been growing.

You will not be surprised to hear that the events in Japan have changed my view of nuclear power. You will be surprised to hear how they have changed it. As a result of the disaster at Fukushima, I am no longer nuclear-neutral. I now support the technology.

A crappy old plant with inadequate safety features was hit by a monster earthquake and a vast tsunami. The electricity supply failed, knocking out the cooling system. The reactors began to explode and melt down. The disaster exposed a familiar legacy of poor design and corner-cutting. Yet, as far as we know, no one has yet received a lethal dose of radiation.

Some greens have wildly exaggerated the dangers of radioactive pollution.

Yup, and some greens, George, have wildly exaggerated the dangers of genetically modified food, the population explosion, endocrine disrupters, acid rain, ocean acidification, ozone depletion, pesticides, oil spills and the Y2K computer bug.

Actually my doubts about nuclear power came before the Fukushima crisis, which has indeed reaffirmed the low risks involved in nuclear power. What worries me is the economics of an electricity generating industry that requires massive capital projects, whose costs usually over-run and whose costs per kilowatt hour are roughly double those of the newest gas turbines.

Of course, new technologies may come to rescue one day, as I argued in the case of thorium. But a perceptive article by Shikha Dalmia explains where nuclear's flaws come from -- its symbiotic relationship with government. Nuclear power requires, demands and gets subsidies of many different kinds.

But the mother of all subsidies is the liability cap that nuclear enjoys. In the event of an accident, the industry is on the hook for only $1.2 billion in damages, with the government covering everything beyond that. Japan's cap is generous even by American standards, which require the industry to cover $12.6 billion before Uncle Sam kicks in. (Nuclear proponents in the U.S. argue that this liability cap is necessary given our insane tort awards. However, the fact that even countries without such awards have to offer a liability cap suggests that nuclear technology is not yet considered safe enough to be viable.)

Which leads Dalmia to this conclusion, which resonates very strongly with me.

The liability cap effectively privatizes the profits of nuclear and socializes the risk. It uses taxpayer money to diminish the industry's concern with safety - which government regulations can't restore.

That's exactly the problem with crony capitalism, whether in finance or energy or anything else. The `market' and `capitalists' are not on the same side and against `government'. No, its government and capitalists colluding against the market, which is on the side of the people. The `financial market' proved to be no such thing; it was a casino for favoured clients run by central banks. The `energy market' is no such thing. It is a scheme run by governments for favoured clients in the nuclear, renewable and environmental-pressure group industries.

As Adam Smith so astutely observed,

The proposal of any new law or regulation which comes from [businessmen], ought always to be listened to with great precaution, and ought never to be adopted till after having been long and carefully examined, not only with the most scrupulous, but with the most suspicious attention. It comes from an order of men, whose interest is never exactly the same with that of the public, who have generally an interest to deceive and even to oppress the public, and who accordingly have, upon many occasions, both deceived and oppressed it.