The Coverage of the Nuclear Risk in Europe: Which Alternative?
Posted: 22 Jan 2008 Last revised: 30 Oct 2013
Date Written: 2008
The goal of our paper is to examine whether this risk sharing by nuclear operators could constitute a serious alternative for the current coverage system. In order to examine this alternative we will place it in a concrete context of nuclear operators in Europe. Moreover, we do not merely want to sketch the theoretical possibilities of a risk sharing by operators (as this has been done before in the literature). We will in addition also examine the financial consequences for nuclear operators in Europe of such a risk sharing agreement. Given this purpose, our paper is structured as follows: after an introduction we sketch the current coverage of the nuclear risk in Europe. We present the way the insurance pools function today (by pointing at the example of France) and point at the few costs and inefficiencies of the insurance scheme. Section 3 then develops the potential alternatives. It is shown that where insurance (as a result of market failure through market power) may not provide an optimal result various alternatives can be examined and have been applied in practice. In section 4 we present our alternative of a risk sharing agreement between European operators. In that section we will not only elaborate upon the principles, but also provide some monetary backing for how the precise contribution of each operator in such a particular case would have to be calculated. The paper concludes in section 5.
Keywords: nuclear risk, risk coverage, OECD liability Conventions, risk-sharing
JEL Classification: Q48
Suggested Citation: Suggested Citation