Local governments addicted to nuclear subsidies

Author: 1 Comment Share:

Only 18 months after the Fukushima nuclear disaster, local municipalities in Japan are realizing how much their finances depend on the nuclear power-induced money.

“They’re like drug addicts cut off from supplies,” said a member of the assembly of Niigata Prefecture.

“People who do not benefit from the plant are a minority here. Still, it’s true that some residents who don’t directly get the money were unhappy about the restart,” said an Oi town assemblyman.

An insider in the construction industry in Kashiwazaki says that local politicians and contractors continue to hunt for new sources of nuclear power-related income even after the Fukushima plant disasters. Even though it is now next to impossible to hope for construction of new nuclear plants, they are looking into the possibility of building facilities for temporary storage of spent nuclear fuel from nuclear power plants around the country, or a storage site for contaminated materials from Fukushima, he points out.

A journalist who covers nuclear power issues for a major newspaper notes that Rokkasho’s special status among host municipalities gives it enormous leverage.  “It’s like a drug addict engaging in robbery to get the money to buy more narcotics,” the journalist said.

“But everybody does it”

The problems start because the monies received from industries put the governed and governing in an adversarial relationship as the concerns of the locals become less and less valuable with every subsidized dollar received, as well as pit national and local governments against each other to see which will come up with the largest subsidy package, and ultimately, the funds received through subsidies are chosen for use as short-term stimulus, and not long-term return.

These subsidies have become so prevalent as to be a new normal part of business and an expected part of every location decision.  If any threats appear that endanger the subsidies continuance, those who receive the monies complain and spread fear-mongering about economic fallouts.

The implication for the local economy is loss of potential benefits.  All that’s left after a few years is less stimulus and considerable debts, and a serious potential for political addiction that is not easily broken.

These subsidies are progressively losing their relevance and are becoming an unbearable fiscal burden.    Despite the huge amount of money that is widely believed to be spent on subsidies, the system is surprisingly opaque.  Continuing this wasteful overspending on risky and inherently dangerous returns drive investment returns lower and lower, and place additional further strain on the local environment.

Here’s a simple truth: Whatever relies largely on subsidies, is always at constant risk.

Source: The Japan Times

Previous Article

TEPCO officials admit failed to take enough safety measures before Fukushima disaster

Next Article

In-Focus: Japan – Noda Cabinet disapproval ratings hit new record high – Kansai Electric applies for nearly 12 percent rate hike