chakravo_04

Emory University
Department of Economics
Working Papers

Title: Could Nuclear Power Solve the Global Warming Problem?

Number: 04-07

Author: Ujjayant Chakravorty, Bertrand Magné and Michel Moreaux

Issue Date: July 2004 (Revised, March 2005)

Abstract: Global warming is primarily caused by carbon produced by the burning of fossil fuels,
especially coal. However, nuclear power is carbon free. We develop a dynamic model of the
world energy economy that includes fossil fuels and nuclear power. If global warming is to
be controlled, nuclear power becomes economical, but a surprising result is that currently
known stocks of uranium may only last for a very limited time. We find the scarcity rent
of uranium to be large. Since only four countries possess most of the world’s uranium,
this could lead to an OPEC-like uranium cartel. We model advanced nuclear technology,
prototypes of which are already operational, that can re-use a significant portion of nuclear
waste. We find that this technology can supply energy for an indefinite period. If global
energy demand were to stagnate along with population late in this century, the imputed
price of carbon today may be much lower than previously thought.

Title:	Could Nuclear Power Solve the Global Warming Problem?
Number:	04-07
Author:	Ujjayant Chakravorty, Bertrand Magné and Michel Moreaux
Issue Date:	July 2004 (Revised, March 2005)
Abstract:	Global warming is primarily caused by carbon produced by the burning of fossil fuels, especially coal. However, nuclear power is carbon free. We develop a dynamic model of the world energy economy that includes fossil fuels and nuclear power. If global warming is to be controlled, nuclear power becomes economical, but a surprising result is that currently known stocks of uranium may only last for a very limited time. We find the scarcity rent of uranium to be large. Since only four countries possess most of the world’s uranium, this could lead to an OPEC-like uranium cartel. We model advanced nuclear technology, prototypes of which are already operational, that can re-use a significant portion of nuclear waste. We find that this technology can supply energy for an indefinite period. If global energy demand were to stagnate along with population late in this century, the imputed price of carbon today may be much lower than previously thought.

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