The Coverage of the Nuclear Risk in Europe: Which Alternative?

Posted: 22 Jan 2008 Last revised: 30 Oct 2013

See all articles by Michael G. Faure

Michael G. Faure

University of Maastricht - Faculty of Law, Metro; Erasmus University Rotterdam (EUR) - Erasmus School of Law

Karine Fiore

Centre d'Analyse Economique; REACH-CLP Unit/Regulated Products Department

Date Written: 2008

Abstract

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

Faure, Michael G. and Fiore, Karine, The Coverage of the Nuclear Risk in Europe: Which Alternative? (2008). Geneva Risk and Insurance Review, Vol. 33, No. 2, 2008. Available at SSRN: https://ssrn.com/abstract=1086291

Michael G. Faure (Contact Author)

University of Maastricht - Faculty of Law, Metro ( email )

PO Box 616
Maastricht, 6200 MD
Netherlands
+31 - 43 - 388 30 60 (Phone)
+31 - 43 - 325 90 91 (Fax)

HOME PAGE: http://www.michaelfaure.be

Erasmus University Rotterdam (EUR) - Erasmus School of Law ( email )

3000 DR Rotterdam
Netherlands

Karine Fiore

Centre d'Analyse Economique ( email )

253 ave du général Leclerc
Maisons-Alfort, cedex 94701
France

REACH-CLP Unit/Regulated Products Department ( email )

253 avenue du general Leclerc
Maisons-Alfort, cedec 94701
France

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