National

Adapted from an EPIC analysis of data from IEA/NEA, EIA, and DOE; Chart: Axios Visuals

Six U.S. nuclear plants have closed in the past five years and nearly 35% of the remaining fleet are now at risk of early closure or slated to retire.

The big picture: Many tout carbon-free nuclear energy as a climate solution, but today’s nuclear plants are having a difficult time competing with cheap natural gas and renewables in today’s wholesale electricity markets. New advanced nuclear technologies may reduce costs, but even in the most optimistic scenarios they will not be competitive without a price on carbon.

Though they remain largely untested, advanced technologies could prove cheaper and safer than current reactors:

Small modular reactors (SMRs) are compact and require less on-site construction. 

Generation IV reactors don’t require elaborate external cooling systems like the ones that failed at Fukushima.

Liquid-sodium cooled reactors can use spent uranium and plutonium, allowing them to produce power for extended periods without costly refueling.

Yes, but: Thanks to the fracking boom, nuclear technologies will face stiff competition from natural gas combined cycle (NGCC) power plants for decades, as well as from renewables due to their decreasing costs. Unless fossil fuel plants pay a price for climate-damaging carbon emissions, carbon-free technologies like nuclear energy will likely continue to lose market share or require subsidies.

What to watch: The above chart compares the expected range of costs for producing a megawatt hour (MWh) of electricity from advanced nuclear technologies in 2040 to the projected cost of NGCC plants — both with and without a carbon price of roughly $50 per ton of emissions, as used by the Obama administration.

Without a carbon price, there is no advanced nuclear technology that is projected to be competitive with a NGCC plant.

However, with a modest carbon price in place, cost projections for all three advanced nuclear technologies suggest they could be competitive with NGCC plants, with SMRs and High-Temperature Generation IV plants particularly close.

The bottom line: The capital investments that increase the odds of innovation depend on market signals. To plan on a nuclear renaissance without a price on carbon is to treat hope as a strategy.

Michael Greenstone is the Milton Friedman Distinguished Service Professor in Economics at the University of Chicago's College and Harris School of Public Policy and director of its Energy Policy Institute.

Nuclear energy could be competitive, but it requires pricing carbon

Otherwise, it will likely continue to lose market share.

Energy

Nuclear power

Expert Voices

Alternative energy

<p><a class="gtmContentClick" data-vars-link-text="Six U.S. nuclear plants" data-vars-click-url="https://www.eia.gov/todayinenergy/detail.php?id=37055" data-vars-item="in_content_link" href="https://www.eia.gov/todayinenergy/detail.php?id=37055" target="_blank">Six U.S. nuclear plants</a> have closed in the past five years and <a class="gtmContentClick" data-vars-link-text="nearly 35%" data-vars-click-url="https://www.ucsusa.org/nuclear-power/cost-nuclear-power/retirements#.XBvKtmhKg2w" data-vars-item="in_content_link" href="https://www.ucsusa.org/nuclear-power/cost-nuclear-power/retirements#.XBvKtmhKg2w" target="_blank">nearly 35%</a> of the remaining fleet are now at risk of early closure or slated to retire.</p><p><strong>The big picture: </strong>Many tout carbon-free nuclear energy as <a class="gtmContentClick" data-vars-link-text="a climate solution" data-vars-click-url="https://www.nytimes.com/2018/12/18/opinion/climate-carbon-tax-innovation.html" data-vars-item="in_content_link" href="https://www.nytimes.com/2018/12/18/opinion/climate-carbon-tax-innovation.html" target="_blank">a climate solution</a>, but today’s nuclear plants are having a difficult time competing with cheap natural gas and renewables in today’s wholesale electricity markets. New advanced nuclear technologies may reduce costs, but even in the most optimistic scenarios they will not be competitive without a price on carbon.</p>

Ominous forecasts about the impact of climate change serve as the backdrop for the world — led by U.S. lawmakers and companies — to debate big action on the problem, which could upend energy systems and our way of life.

Energy & Environment

Data: Associated Press-NORC Center for Public Affairs Research survey conducted Nov. 14 to Nov. 19, 2018; margin of error ±3.9; Chart: Chris Canipe/Axios

As much as 67% of Americans might support a carbon tax, according to a new poll from the Energy Policy Institute at the University of Chicago (EPIC) and the Associated Press–NORC Center for Public Affairs Research.

Why it matters: 98% of economists believe that the least expensive way to slow climate change is to put a price on carbon emissions through a cap-and-trade system or tax. Although economists also suggest using revenues from carbon pricing to reduce income taxes — taxing a “bad” (carbon emissions) to reduce taxes on a “good” (income) — these poll results suggest voters prefer pairing carbon taxes with environmental spending.

Reality check: The politics of carbon pricing are challenging. Progressive Washington State has twice rejected referendums to put a price on carbon, at least partially because of aggressive advertising campaigns by fossil fuel companies and questions about how the money would be spent. Further, the American Clean Energy and Security Act failed to get a vote in the Senate in 2010, and the House of Representatives even passed a resolution last summer denouncing the idea of a carbon tax.

Yes, but: New polling released this week shows that 44% of Americans support a carbon tax. More importantly, that support varies when they are told what policies might accompany it.

Of all the possible uses polled, the largest portion of Americans support a carbon tax whose revenue would be used for environmental restoration (67%) and renewable energy R&D (59%). 

A more modest 49% would support a tax whose revenue would be used as a tax rebate — recently advocated by a group of economists as a political sweetener — while 45% support a tax whose revenue would reduce the deficit. 

Support for a carbon tax is actually lower (34%) when respondents are told the tax policy would be accompanied by eased climate regulations.

What to watch: Pricing carbon is the most efficient way to recruit the private sector to identify and develop the cheapest emissions reductions. The American public is catching up to the consensus among scientists and economists, but whether the political establishment will remains an open question.

Michael Greenstone is the Milton Friedman Distinguished Service Professor in Economics, the College and the Harris School of Public Policy and director of its Energy Policy Institute.

Voter support for carbon tax may depend on how revenue is used

Voters prefer pairing carbon taxes with environmental spending.

Carbon tax

Business

Politics

<p> </p><div><figure><div id="av-2019-01-18-carbon-tax-54HS6" style="max-width:100%"><img alt="Data: Associated Press-NORC Center for Public Affairs Research survey conducted Nov. 14 to Nov. 19, 2018; margin of error ±3.9; Chart: Chris Canipe/Axios" class="axios-visual-newsletter-fallback-image" src="https://graphics.axios.com/2019-01-18-carbon-tax/fallbacks/2019-01-18-carbon-tax-fallback.png" width="1725" height="1380"/><img alt="Data: Associated Press-NORC Center for Public Affairs Research survey conducted Nov. 14 to Nov. 19, 2018; margin of error ±3.9; Chart: Chris Canipe/Axios" class="axios-visual-apple-fallback-image" src="https://graphics.axios.com/2019-01-18-carbon-tax/fallbacks/2019-01-18-carbon-tax-apple.png" width="1242" height="1500"/></div><figcaption>Data: <a class="gtmContentClick" data-vars-link-text="Associated Press-NORC Center for Public Affairs Research" data-vars-click-url="http://www.apnorc.org/pages/default.aspx" data-vars-content-id="9609ff4a-80f4-4587-bcc5-baf0a3b42dfa" data-vars-headline="Voter support for carbon tax may depend on how revenue is used" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="http://www.apnorc.org/pages/default.aspx" target="_blank">Associated Press-NORC Center for Public Affairs Research</a> survey conducted Nov. 14 to Nov. 19, 2018; margin of error ±3.9; Chart: Chris Canipe/Axios</figcaption></figure></div><p><a class="gtmContentClick" data-vars-link-text="As much as 67% of Americans might support a carbon tax" data-vars-click-url="https://epic.uchicago.edu/news-events/news/new-poll-nearly-half-americans-are-more-convinced-they-were-five-years-ago-climate" data-vars-content-id="9609ff4a-80f4-4587-bcc5-baf0a3b42dfa" data-vars-headline="Voter support for carbon tax may depend on how revenue is used" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://epic.uchicago.edu/news-events/news/new-poll-nearly-half-americans-are-more-convinced-they-were-five-years-ago-climate" target="_blank">As much as 67% of Americans might support a carbon tax</a>, according to a new poll from the Energy Policy Institute at the University of Chicago (EPIC) and the Associated Press–NORC Center for Public Affairs Research.</p><p><strong>Why it matters:</strong> <a class="gtmContentClick" data-vars-link-text="98% of economists believe" data-vars-click-url="http://www.igmchicago.org/surveys/carbon-taxes-ii" data-vars-content-id="9609ff4a-80f4-4587-bcc5-baf0a3b42dfa" data-vars-headline="Voter support for carbon tax may depend on how revenue is used" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="http://www.igmchicago.org/surveys/carbon-taxes-ii" target="_blank">98% of economists believe</a> that the least expensive way to slow climate change is to put a price on carbon emissions through a cap-and-trade system or tax. Although economists also suggest using revenues from carbon pricing to reduce income taxes — taxing a “bad” (carbon emissions) to reduce taxes on a “good” (income) — these poll results suggest voters prefer pairing carbon taxes with environmental spending.</p>

Michael Greenstone

Stories

Voter support for carbon tax may depend on how revenue is used

Nuclear energy could be competitive, but it requires pricing carbon