The Political Economic Determinants of Nuclear Power: Evidence from Chernobyl

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This paper investigates the political-economic determinants of nuclear energy investment using the Chernobyl accident as a natural experiment. We document several facts. First, the accident sharply reduced worldwide growth in the number of operating nuclear reactors. Second, the reduction is driven by increased construction delays in democracies, leading to prolonged use of older and less safe plants. Third, the nuclear growth slowdown in democracies is more pronounced when large fossil fuel reserves are present. Fourth, the opening of a new nuclear power plant reduces air pollution in nearby cities. Finally, micro-level evidence from the UK Parliament and US Congress provides strong indication that political capture by energy groups played a role in reducing nuclear energy investment in democracies, which may have hindered efforts to improve nuclear safety and moderate climate change.