Winners, Losers, and the Nuclear-Waste Dilemma |
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Authors: | Mary Riddel R Keith Schwer |
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Institution: | (1) Economics Department, University of Nevada, 4505 Maryland PKWY, Box 6005, Las Vegas, NV 89154, USA;(2) Center for Business and Economic Research, Economics Department, University of Nevada, Las Vegas, USA |
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Abstract: | This paper explores how property-right assignment affects social efficiency when a public program has both “public good” and
“public bad” components. We show that when willingness to accept a public bad exceeds the willingness to pay, the net benefit
is unambiguously lower when the property right supports the status quo institutional structure. Thus, Kaldor–Hicks efficiency tests tend to favor
public programs and mitigation over the status quo even when mitigation negatively affects another group. To illustrate the
result, we develop social-cost estimates for moving nuclear waste from current temporary-storage facilities to a permanent
central repository at Yucca Mountain, NV, USA. For a representative city with a population of 226,195, the present value of
the external cost of shipping waste is $1.42 billion when those living near temporary nuclear-waste storage facilities are
assigned the property right to “health and safety.” That number swells to $5.95 billion when those living near the transport
route are assigned the property right. Thus, property-right assignment affects the efficient level of nuclear-waste, and thus
nuclear energy, produced. |
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Keywords: | Coase theorem nuclear-waste storage nuclear-waste transport public bads WTA and WTP |
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