The New York Times reports today that the Chinese — who consume more coal than the U.S., Europe, and Japan combined – are leading the way on “clean coal” power plant construction and nuclear power. The implicit question of course is, if the Chinese can do that, why can’t we?
What gets built in the Chinese power sector is a function of governmental decision-making. What gets built in the U.S. is primarily a function of (private) business decision-making. The Chinese are building a lot of nukes and clean-coal power plants because the government is ramming them down the economy’s throat. We Americans are not building those plants because the government is not doing likewise. Because clean coal and nuclear power are both more risky and expensive than conventional power (even the modest sort of clean-coal technology mentioned by the Times is so expensive that few investors are interested in going forward with those technologies), it’s not going to get much love in a free-market economy. Investors are not going to voluntarily take losses to make Greenpeace feel better.
If and when clean-coal and nuclear power plants are economically competitive, they will be built. But investors don’t think they are as of yet, so they will not. Will governmental intervention to force the construction of uneconomic power plants prove worthwhile from an economic point of view? It’s hard to see how.