NCPA - National Center for Policy Analysis

British Nuclear Power is Stuck With a Carbon Tax

October 4, 2002

Critics say that energy markets in Britain are rigged against nuclear power for political reasons. Proponents of nuclear power in the British energy ministry argue that nuclear energy is the easiest way to cut green house gas emissions. However, nuclear power opponents want to dismantle the industry instead. The political compromise is a nuclear industry saddled with numerous burdens:

  • Britain's nuclear generator must spend over $300 million annually for its waste to be reprocessed at an expensive state-owned facility.
  • This not only avoids the politically unpopular (but cheaper) storage of nuclear waste, but also keeps the state-owned reprocessing facility financially afloat.
  • Nuclear power must also set aside funds for future plant decommissioning.
  • In addition, the nuclear industry must pay a special tax ($125 million yearly) aimed at reducing CO2 emissions -- even though they emit no carbon.

The British government justifies this because the tax is designed to "encourage" renewable energy rather than penalize carbon producers. Nuclear power plants also pay higher local taxes than their competitors that pollute more. Because of these factors, British taxpayers were forced to bailout Britain's privatized nuclear power company.

Source: "Nuclear Industry: Fallout," The Economist, September 14-20, 2002.

 

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