The Political Economic Determinants of Nuclear Power Investment: Evidence from Chernobyl (with Nancy Qian and Shaoda Wang)

This paper investigates the political-economic determinants of nuclear energy investment using the Chernobyl accident as a natural experiment. We document several facts. First, Chernobyl reduced worldwide growth in the number of nuclear power plants. Second, the reduction is driven by increased construction delays in democracies and results in the prolonged use of older and less safe plants. Third, the nuclear growth slowdown in democracies is more pronounced in the presence of large fossil fuel reserves. Finally, nuclear plant capacity reduces coal-fired power plants and air pollution. The results for the UK parliament and the US Congress provide suggestive evidence that lobbying by energy groups was an important driver of the reduction in nuclear energy investment in democracies and, in the long run, likely undermined efforts to increase nuclear energy safety and moderate climate change.