McClaughry: Nuclear regulation’s perverse incentives

By John McClaughry

One of my go-to guys on nuclear energy is Jack Devanney, now retired after 40 years managing nuclear projects and wrestling with nuclear regulators. Here’s his latest insight:

“When we build a nuclear plant, we give an omnipotent regulator monopoly control over the project. The regulator sees no benefit from the low CO2, near zero pollution electricity produced by the plant, but he owns any problems. To escape that responsibility, he relies on rigid procedures and voluminous paperwork, which documents that all procedures have been followed religiously. So whatever happens, it’s not his fault.”

“By stifling technical progress, squashing competition, demoralizing workers, diverting management, and diluting responsibility, this perverse set of incentives often results in shoddy quality. The solution to the resulting problems and screw ups is still more rigidly prescribed procedures, more detailed paperwork, more time consuming sign offs and approvals, and the downward spiral continues. Such a system always results in additional costs and delays. If unchecked, those costs explode and the delays become interminable, as happened at [the two new Vogtle plants in Georgia] and elsewhere. This is not a problem for the regulator; and it’s his incentives that control the project.”

Devanney’s point applies in many types of government regulated activities. The regulator has to overregulate to protect his own position, no matter how senseless or costly the outcome.

John McClaughry is vice president of the Ethan Allen Institute. Reprinted with permission from the Ethan Allen Institute Blog.

Image courtesy of Public domain

2 thoughts on “McClaughry: Nuclear regulation’s perverse incentives

  1. Governments should be illegal.
    Look at the death and decline caused by governments.
    It’s sickening beyond description..

  2. The second cleanest source of power is over regulated because the leftist are afraid of the invisible boogie man radiation. They brush off the safety record of Military use of Nuke power on ships which has performed without incident since 1954 and powering Europe without incident. The new thorium reactors are safer yet. Even officials of the green faction have admitted without nuke power our demands can’t be met with solar and wind. Until we are rid of the leftist marxists and their stuck on stupid policy of blow ‘n glow power we won’t have nuke again.

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