Build back nuclear
With the U.S. rejoining the Paris Agreement last Friday, it’s puzzling to see what President Biden has actually announced he’ll do to meet its goals. Mr. Biden seems to believe that adding boxes to a bureaucratic org chart and mingling with foreign officials at conferences may avert an environmental crisis: an executive order from his first week in office creates a White House envoy, a new Climate Policy Office, an international photo op branded as the Leaders’ Climate Summit, and a heap of “draft action plans” for a government task force to review. This month also brought news that the Biden Treasury Department would set up a “climate hub” among its ranks. Draft actions plans don’t write themselves, after all.
But hidden in this strategy, such as it is, lies one idea of consequence, and that is the president’s goal to finance lower emissions in developing countries through organizations like the World Bank. While the Bank already seeks to do this, its hands have been tied in an area where it could make an enormous difference: nuclear energy. For the president’s climate plan to be serious, it should prioritize nuclear support through the Bank and the other multilateral lenders where the U.S. is a top shareholder.
While rich countries’ carbon output is largely flat, the developing world’s emissions are only projected to grow unchecked. The U.S. and Europe, responsible for nearly all emissions at the turn of the 20th century, now only account for one third. Wealthy nations may be the loudest voices in climate activism, but the future will be decided elsewhere, and it won’t be an especially prosperous one if we insist that poorer societies power their way up the income scale with renewables alone. Nuclear will be essential for their energy mix.
Although its reputation in the United States suffers from memories of Three Mile Island, a 1979 accident as haunting as the bell bottoms of that era (but just as harmless to human life), nuclear energy is a mainstream power source providing 30 percent of the world’s low-carbon electricity. The main risks connected with nuclear arise when retreating from it, not embracing it. For instance, after a 2011 tsunami hit Japan’s Fukushima reactor, leading the country to temporarily take its nuclear power plants offline, fossil fuel usage and electricity prices surged, resulting in more deaths for the country than from the disaster itself. Researchers have shown that Germany overreacted to Fukushima too, shutting down some of its reactors and incurring $12 billion in social costs each year, mostly through increased mortality from higher levels of air pollution.
Not only does nuclear energy release no carbon emissions, innovations continue to minimize the waste it leaves behind. One recent breakthrough at the Argonne National Laboratory may permit up to 97 percent recycling of spent nuclear fuel. Other advances continue to strengthen power plants’ safety, and in the case of modular reactors, they permit both smaller physical footprints and use with different energy sources.
Despite producing safe power with more reliability than solar or wind, nuclear hasn’t benefitted from the same subsidies, and its financing is more complex since projects require massive upfront costs. This is why government-backed agencies are often called in to guarantee loans when building abroad. With Beijing and Moscow eyeing nuclear energy deals in South Asia, Africa, Eastern Europe, and even Latin America, it makes no sense for the U.S. to stay on the sidelines. For this very reason, Congress in 2019 eased restrictions at the Export-Import Bank when competing for nuclear deals against Chinese suppliers.
Yet the World Bank and its sister institutions across the globe can do even more. Not only is the Bank’s lending more transparent than China’s, it has the balance sheet and experience in developing countries to make an impact. It could also finance safer reactors based on U.S. and Japanese technologies.
Though the World Bank left nuclear finance decades ago, its own anti-poverty mission makes its return a no-brainer. The governments that act as the Bank’s shareholders have already compelled it to quit upstream oil and gas projects in the developing world, even as the Bank pursues a goal of universal access to electricity. This makes little sense. If the World Bank has to surrender its expertise in fossil fuel lending, surely it can restore its know-how in nuclear finance.
Breaking ground on new infrastructure is better than endless handwringing. Years of climate talks have emitted pledges to coordinate the vaguest of environmental efforts; the Paris Agreement itself attempts to “enable opportunities for coordination,” whatever that means. These discussions are becoming nothing more than mileage runs for the frequent flyers who attend them, not progress reports on the building spree that the world will need to thrive with ample clean energy. It’s time to go nuclear or go home.
Congressman French Hill is a Republican representing the 2nd District of Arkansas. He is a member of the House Financial Services Committee, which oversees U.S. policy at the World Bank and other international financial institutions.