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Rating: 
Summary: A surprising failure, with redeeming features
Review: This is a strange mix of useful comments and a disastrous econometric exercise. In his attempt to estimate the cost of facing out Swedish nuclear energy, professor Nordhaus makes a number of mistakes, both on facts and on methodology: 1. He highly misjudges the supply situation. 20 TWh of oil fired capacity is simply disregarded, without explanation, despite being clearly profitable in a situation with normal electricity prices. The import potential is also much larger than he claims. Total supply is understated by an astonishing 50 TWh (compare with our present demand of around 140 TWh and the "normal" long term demand, with neutral taxes, of around 100 TWh!) 2. Marginal cost of production in existing nuclear plants is far higher than professor Nordhaus suggests. He overlooks the sizeable capital outlays required to keep old reactors alive. Transmissions costs are also left out, despite being included in prices 3. The author has not eliminated, as one should, the huge impact of discriminatory taxes and subsidies. Trying to defend this by calling the purpose of these taxes "social", when they are, of course, political, is unconvincing. 4. In his central scenario, the Swedish carbon dioxide tax is used, when measuring the cost of climate control. The correct method is to focus on the cost of buying emission rights, as the author himself actually confirms (without himself noticing!) Acting as he does against he own knowledge, one has to conclude that the main scenario is chosen to please the sponsors (our major power companies). Taken together, these mistakes (and many more) add up to a mind boggling error. With true supply figures and correct methods and proper , his estimates (in the central scenario) are reduced but over 90 %! More details are available in the Swedish Journal "Ekonomisk Debatt" (nr 8, 1999). In view of the author's reputation, this outcome is difficult to understand. He may in some respects (e.g the statistics) have been misled by his Swedish advisers, but for methods there is no such excuse. I would, nevertheless, award the book one star, in sincere appreciation of his correct side comments on a number of "sensitive" policy issues. He dismisses, e g, the prevailing view that our remaining rivers have to be exploited if nuclear reactors are closed. He also mentions the anomalies of our energy statistics, which disregards heat losses in nuclear reactors and thus makes it possible for politicians to claim, in true orwellian fashion, that energy waste is energy saving. Åke Sundström, retired government economist, author of a book on Swedish hydro energy.
Rating:
Summary: A surprising failure, with redeeming features
Review: This is a strange mix of useful comments and a disastrous modell exercise. In his attempt to estimate the cost of facing out Swedish nuclear energy, professor Nordhaus makes a number of mistakes, both on facts and on oil-fired capacity it simply disregarding, without explanation, despite being clearly profitable in a situation with normal electricity prices. The import potential is also much larger than he claims. The total supply is wrong by an astonishing 50 TWh (compare with our present demand of around 140 TWh and the "normal" long term demand, with neutral taxes, of around 100 TWh!) 2 He has not eliminated, as one should, the huge impact of discriminatory taxes and subsidies. Trying to defend this by calling the purpose of these taxes "social", when they are cleary political, is unconvincing. 3. In his central scenario, the Swedish carbon dioxide tax is used, when measuring the cost of climate controll. The correct method is to focus on the cost of buying emission rights, as the author himself is actually confirming (without himself noticing!) Acting as he does against he own knowledge, one has to conclude that the main scenario is chosen to please the sponsors (our major power companies). Taken together, these mistakes add up to a mind-boggling error. With true supply figures and correct methods, his estmates (in the central scenario) are reduced but over 90 procent! More details are available in the Swedish Journal "Ekonomisk Debatt" (nr 8, 1999). In view of the authors reputation, this outcome is difficult to understand. He may in some respects (e.g the statistics) have been misled by his Swedish advisers, but for methods there is no such excuse. I would, nevertheless, award the book one star, in deep and sincery appreciation of his controversial comments on a number of energy policy issues. He dismisses, e g, the prevailing view that our remaining rivers have to be exploited if nuclear reactors are closed. He also mentions the anomalies of our energy statistics, adding apples and pears, electricity and heat, and thus making it possible for politicians to claim, in true orwellian fashion, that energy waste is energy saving. Åke Sundström, retired government economist, author of a book on Swedish hydro energy. END
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