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Can Nuclear Power Supply Clean Energy in the Long Run ?

This paper models nuclear energy by developing a dynamic model with endogenous substitution among polluting nonrenewable resources. Nuclear power can reduce the cost of generating clean energy significantly. However, continued expansion of nuclear capacity at historical rates is likely to cause a scarcity of uranium and make nuclear power costlier than other energy sources within a few decades. Renewables such as solar, wind and biomass, clean coal and next generation nuclear power may supply significant amounts of clean energy late this century. The cost of generating low carbon energy increases sharply if global carbon concentration targets are set at 450 ppm instead of 550 ppm. A policy implication is that the current political and regulatory impediments to the expansion of nuclear power generation may prove to be costly in a post-Kyoto world.