Can Nuclear Power Save the Kyoto Protocol?

Abstract

The Kyoto Protocol is now a legally binding treaty signed by 141 nations, although not by major polluting nations such as the United States, China and India. Can nuclear power, which is carbon free, save Kyoto and solve the global warming problem? Nuclear energy is a tough sell in the developed countries, but developing countries continue to rely heavily on it. Many new nuclear power plants are under construction. We develop an empirical Hotelling model that accounts for the limited stock of uranium, future efficiency improvements in nuclear technology and recycling of nuclear waste. The model shows that currently known stocks of uranium may be exhausted in a few decades. But advanced nuclear reactors can provide clean energy for a long time. However, the role of nuclear power may be much diminished even with modest technological change in fossil fuels and solar energy.

Keywords: Clean Energy, Dynamic Models, Energy Resources, Hotelling Theory, Resource Substitution

JEL Classification: Q32, Q41, Q48