The United States’ nuclear energy plants contribute $60 billion annually to gross domestic product (GDP), in addition to other economic and societal benefits, according to a new study conducted by economists at The Brattle Group.
The report estimates the value of the entire nuclear industry to the U.S. economy and its contribution to limiting greenhouse gas (GHG) emissions. The research concludes that the nuclear industry accounts for about 475,000 full-time jobs (direct and secondary). In addition, energy generated from nuclear plants prevents 573 million tons of carbon dioxide emissions. This is worth an additional $25 billion annually if valued at the U.S. government’s estimate for the social cost of carbon.
“The economic and environmental benefits of nuclear energy are often undervalued in national and state energy policy discussions,” said Dr. Mark Berkman, co-author of the report and a principal at The Brattle Group. “It is even more critical to consider the significant value of U.S. nuclear plants in a landscape where several factors threaten some nuclear facilities and could diminish the industry’s contribution to our electricity supply, the economy, and the environment.”
The report also finds that nuclear energy:
• Helps keep electricity prices low – without it, retail electricity rates could increase by about 6 percent on average. Keeping electricity prices low is the primary means by which nuclear power boosts the economy.
• Provides $10 billion in federal revenues and $2.2 billion in state tax revenues annually.
• Avoids 650,000 tons of nitrogen oxide (NOX) and over one million tons of sulfur dioxide (SO2) emissions annually, together valued at $8.4 billion using the National Academy of Science’s externality estimates.
“This report stresses the need to address the underlying challenges associated with premature nuclear energy plant shutdowns to ensure that Americans can continue to reap the indisputable benefits that these plants bring to the table,” said Nuclear Matters co-chair, former Senator Judd Gregg (R-NH). “The public and policymakers are seldom offered such starkly obvious public policy choices as working to ensure existing nuclear energy plants continue to operate.”
“Reducing carbon emissions is one of our country’s top priorities,” stated Nuclear Matters co-chair, former Senator Evan Bayh (D-IN). “And yet, in this carbon-constrained world, existing nuclear energy plants receive no value for their ability to generate an astounding amount of carbon-free, reliable energy. The answer to one of our biggest environmental and economic challenges lies, in part, in nuclear energy. Without nuclear power, it would be impossible to achieve our carbon reduction objectives.”
Nuclear energy provides almost 20% of the United States’ electricity. Some U.S. nuclear plants are at risk of being prematurely shut down due to a confluence of economic and policy challenges.
The report estimates the nuclear industry’s value using Regional Economic Models, Inc. (REMI), a widely-used dynamic input-output model of the U.S. economy, which for this study was linked with a simplified Brattle model of the U.S. electricity sector in order to better capture the dynamics of power markets and prices. By linking these models, the authors were able to measure the overall value of the U.S. economy with and without the nuclear industry, providing the most accurate picture of the fleet’s contribution to the economy. This approach explicitly subtracts off the economic value of the alternative generation that would be necessary in the absence of nuclear power, to find the incremental contribution of the nuclear industry.
“The Nuclear Industry’s Contribution to the U.S. Economy” was prepared for Nuclear Matters by Dr. Berkman and Dr. Dean Murphy of The Brattle Group.
About Nuclear Matters
The mission of Nuclear Matters is to inform the public about the clear benefits that nuclear energy provides to our nation, to raise awareness of the economic challenges to nuclear energy that threaten those benefits, and to work with stakeholders to explore possible policy solutions that properly value nuclear energy as a reliable, affordable and carbon-free electricity resource that is essential to America’s energy future.
Supporters of Nuclear Matters include a range of companies and organizations in the energy industry, including Ameren Missouri, American Nuclear Insurers, Arizona Public Service Company, AREVA, Black & Veatch, POWER Burns and Roe, Centrus Energy Corp. Dominion, Duke Energy, Energy Future Holdings Corporation, Energy Northwest, Entergy Corporation, Exelon Corporation, FirstEnergy Corporation, GE Hitachi Nuclear Energy, Lightbridge Corporation, Nebraska Public Power District, NextEra Energy Inc., Omaha Public Power District, Pacific Gas and Electric Company, South Texas Project Nuclear Operating Company, Southern Company, Tennessee Valley Authority, and Westinghouse Electric Corporation.
About The Brattle Group
The Brattle Group analyzes complex economic, finance, and regulatory questions for corporations, law firms, and governments around the world. We are distinguished by the clarity of our insights and the credibility of our experts, which include leading international academics and industry specialists. For more information, please visit www.brattle.com.
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