Maxwell H.

May/30/2015
Nuclear Economics
The detonation of Trinity, the first nuclear bomb on July 16th, 1945 marked a new page in
human history and the beginning of an era that we now call the Atomic Age. Humankinds
newfound ability to manipulate the very basis of matter, individual atoms, had profound societal,
environmental, scientific, and economical implications that we have yet to fully uncover. Being able
to concentrate immense amounts of energy into a relatively small volume gave us the greatest
scientific leap in recent history, but also the capability to annihilate ourselves.
Of course, atomic science is a whole branch of knowledge and is ubiquitous, present in the
energy industry, warfare and weaponry, propulsion, space exploration, and in many other everyday
things. But our focus will be on nuclear disasters and their economic effects.
One of the most well known nuclear disasters was the Chernobyl disaster which happened
in 1986 in Ukraine. It is the worst nuclear power plant disaster in history in terms of economic cost,
which was mostly allocated to the cleanup and relocation of residents. The Soviet Union virtually
bankrupted itself by spending 18 billion roubles in an initial response to the disaster. In Belarus, the
total cost of the disaster in the past 30 years has totalled USD$235 billion, at one point accounting
for a quarter of government spending. Even today, Ukraine still spends 7% of its national budget on
costs relating to the Chernobyl disaster, a clearly unsustainable portion of spending that highlights
the catastrophic economic burden of a nuclear disaster.
Another example of a nuclear disaster was the more recent 2011 Fukushima Daiichi
nuclear disaster which was caused by the 2011 Tokohu earthquake and tsunami, where three of
the plants six reactors experienced a meltdown, leading to an evacuation of over 300,000 people
from the surrounding area. The estimated loss of the fallout was USD$500 billion, or the gross
domestic product of Norway in 2014.
Although these disasters were certainly catastrophic and costly, they were accidental. We
have yet to mention nuclear disasters with malicious intent: the economic implications of nuclear
warfare.
To date, there have only been two nuclear weapons used in actual combat: Fat Man and
Little Boy, dropped by the USA on the Japanese cities of Nagasaki and Hiroshima respectively,
killing over 300,000 people and destroying 90% of the cities. The economic loss of this terrible
waste of human life amounted to over 65 billion yen.
A 2005 study estimated that a theoretical average sized nuclear bomb dropped on New
York would cost US$10 trillion dollars, more than 10% of the entire worlds GDP. A disaster of this
scale would be felt everywhere around the world. This study raises questions on the security of
nuclear weapons in relation to the well being and longevity of the human race.
It is worthwhile to note that the true cost of a nuclear disaster is largely hidden. Health
impacts in the form of cancers and birth defects are hard to measure definitively, and damage to
the surrounding ecosystem as well as radiation leaked into the atmosphere are even harder to
measure because of its long term and dispersive nature. The site around the Chernobyl site, for
example, will be unsuitable for human habitation for the next 25,000 years, and in that time will
continue to be a source of economic damage