Electric utilities have trumpeted nuclear power for years, advocating it as lower in production costs than other alternatives. Yet, society has resisted heavy reliance on nuclear power. Explain the source of the disagreement and suggest which side (utilities or society) is correct
Utilities based their assessment on private marginal costs; in terms of those costs, nuclear power appeared attractive. Society at large saw significant detrimental externalities such as storage of nuclear wastes, production of bomb-grade plutonium, and catastrophic meltdowns with the associated nuclear contamination of the air and water. Society is correct that efficiency calls for the inclusion of marginal social costs, which were largely ignored in early advocacy of nuclear power.
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