Why Power Companies Build Nuclear Reactors on Fault Lines: The Case of Japan

Theoretical Inquiries in Law 13 (2):457-486 (2012)
  Copy   BIBTEX


On March 11, 2011, a magnitude 9.0 earthquake and thirty-eightmeter high tsunami destroyed Tokyo Electric’s Fukushima nuclear power complex. The disaster was not a high-damage, low-probability event. It was a high-damage, high-probability event. Massive earthquakes and tsunamis assault the coast every century. Tokyo Electric built its reactors as it did because it would not pay the full cost of a meltdown anyway. Given the limited liability at the heart of corporate law, it could externalize the cost of running reactors. In most industries, firms rarely risk tort damages so enormous they cannot pay them. In nuclear power, “unpayable” potential liability is routine. Privately owned companies bear the costs of an accident only up to the fire-sale value of their net assets. Beyond that, they pay nothing — and the damages from a nuclear disaster easily soar past that point. Government ownership could eliminate this moral hazard — but it would replace it with problems of its own. Unfortunately, the electoral dynamics in wealthy modern democracies combine to replicate nearly perfectly the moral hazard inherent in private ownership. Private firms will build reactors on fault lines — but so will governments.



    Upload a copy of this work     Papers currently archived: 91,102

External links

Setup an account with your affiliations in order to access resources via your University's proxy server

Through your library

Similar books and articles

DPJ's Political Leadership in Response to the Fukushima Nuclear Accident.Tomohito Shinoda - 2013 - Japanese Journal of Political Science 14 (2):243-259.
Questioning nuclear waste substitution: A case study.Alan Marshall - 2007 - Science and Engineering Ethics 13 (1):83-98.
The Rise of Nuclear Fear.Spencer R. Weart - 2012 - Harvard University Press.
The Gordian Knot: Moral Debate and Nuclear Weapons.Ward Wilson - 2013 - Ethics and International Affairs 27 (3):319-328.


Added to PP

13 (#913,759)

6 months
3 (#550,572)

Historical graph of downloads
How can I increase my downloads?

Citations of this work

No citations found.

Add more citations

References found in this work

No references found.

Add more references