This report from the socially responsible investors Hendersons points 
out that nuclear power, despite its protestations to being the solution 
to climate change, can still not be regarded as ethically acceptable. 
Perhaps one way of combatting the nuclear threat may be to target the 
investment community at the same time as pointing out to taxpayers that 
the only way that nuclear would be economic is if it received massive 
taxpayer subsidies. Even the socially irresponsible investor will not 
put any money into something that is uneconomic.

"Our investigations into the issue have concluded that
nuclear is still not economically or environmentally
sustainable – and its revival would hinder rather than help
a solution to climate change"

I think the point to make is that nuclear power would make climate 
change *worse*, not better.

Chris

Hendersons Global Investors www.hendersons.com/sri

Nuclear Power: Still 'No Thanks'

Nuclear energy currently produces about 16% of world
electricity, and 24% of Britain’s power needs. However,
throughout its 50 year history, nuclear has been highly
controversial, not least because of the links between civil
and military applications of nuclear technology, the legacy
of radioactive waste the industry produces and the high
cost of state subsidies to make nuclear an economic
option.
Following the Three Mile Island and Chernobyl disasters,
a number of countries decided to phase out nuclear,
including Italy, Sweden and Germany. Britain ceased
building new plants a decade ago. Due to its negative
security, environmental and economic impacts, nuclear
power has long been avoided by socially responsible
investors. All the Global Care funds as well as the
Industries of the Future fund therefore exclude companies
that operate nuclear plants, provide nuclear generation
equipment or mine uranium.
As the threat of climate change has grown, however, the
nuclear industry has argued that it offers a zero carbon
energy source. The industry has been joined by some
high-profile scientists, notably Sir David King, the
government’s chief scientific adviser. The UK Government
is currently reviewing the country’s energy policy with
suggestions that this could lead to a nuclear rebuilding
programme.
Our investigations into the issue have concluded that
nuclear is still not economically or environmentally
sustainable – and its revival would hinder rather than help
a solution to climate change. From an investment
perspective, nuclear power plants are highly capital
intensive, and can only be profitable through special state
subsidies not available to other power producers. For
example, the risks associated with the operation of
nuclear plants means that it cannot obtain normal
insurance cover for accidents. The industry also has a poor
track record of delivering projects on time and to budget.
Sizewell B was the last nuclear power plant to be built in
Britain and took 15 years to go from proposal to
production and cost more than twice the original
estimate.
More seriously still, the UK’s privatised nuclear operator,
British Energy was forced to seek a major government
bail-out in 2002, following poor financial results –
described at the time by Financial Times columnist John
Kay as “the biggest write-off in the history of capitalism”
(FT 19/08/02). It was therefore no surprise that the UK’s
Energy White Paper concluded in 2003 that “the current
economics of nuclear power make it an unattractive
option for new generating capacity.”
Beyond the question of economics, no solution has yet
been found to the problem of radioactive waste, some of
which will need to be stored for hundreds of thousands of
years. In the UK, it is now projected that it will cost £56
billion for the clean-up the nuclear sites as production
ends. Ecological footprinting experts at Best Foot Forward
estimate that the external environmental costs of nuclear
outweigh those of fossil fuels, such as coal, oil and gas.
The safety issues surrounding nuclear power stations and
their vulnerability to terrorist attack have also been
accentuated following the 9/11 and 7/7 incidents.
The heartening thing is that nuclear is simply not needed
either to keep the lights on or tackle climate change.
Authoritative reports published this year by the Green
Alliance and the New Economics Foundation all show that
cost-competitive emission reductions can be made
through energy efficiency, the roll-out of microrenewables
– such as household-level solar, wind and
‘combined heat and power’ systems – as well as largescale,
wind, wave and tidal power. The estimated £20
billion needed to construct and operate new nuclear
plants to replace Britain’s existing 23 reactors could be far
better spent elsewhere – without storing up a radioactive
legacy for the future or squeezing out the country’s
nascent renewables industry. And according to Amory
Lovins, energy guru at the Rocky Mountain Institute in the
USA, “a portfolio of least-cost investments in efficient use
and in decentralised generation will beat nuclear power
in cost and speed and size by a large and rising margin”.
For all these reasons, we will continue to avoid nuclear
power in Henderson’s SRI funds, searching for inherently
safe and sustainable solutions to the world’s energy
problems.