The NRC and the Value of Life—Revisited

December 11, 2014
David Wright
Former contributor

In February 2011, my colleague Ed Lyman wrote a blog post and a letter to the New York Times pointing out that the Nuclear Regulatory Commission (NRC) assigns a MUCH lower value to human life when assessing the costs of accidents than other government agencies. This issue has been raised again in a recent Bloomberg article.

In his New York Times letter, Ed explained it this way:

The N.R.C. has been using the same value—$3 million—since 1995. If the agency were to increase that value to the $5 million to $9 million per life that other agencies use, it would have a major effect on nuclear plant license renewals and new reactor approvals. Plant owners would have to add safety features that the N.R.C. now considers too expensive because it lowballs the value of the lives that could be saved.

N.R.C. calculations need to be brought in line with those of other agencies.

Why Does This Matter?

As Ed points out, this matters because the nuclear industry uses this figure to put a monetary value on loss of life from a possible nuclear accident. It then compares that cost to the cost of safety measures intended to prevent such an accident or reduce its consequences, to see if the safety measures are worth installing. Since the NRC allows the nuclear industry to use a value of life that is 2 to 3 times lower than other federal agencies, that lowers the calculated costs of accidents, which means fewer safety measures appear to be justified, and which means the industry doesn’t need to spend money on them.

The Fukushima disaster, which occurred a few weeks after Ed’s letter was published and is projected to result in several thousand eventual cancer deaths, made it apparent that resolving this discrepancy is not merely an abstract exercise. Yet the NRC has been studying this issue for at least the past three years without making any changes. The NRC staff is supposed to provide a recommendation for the NRC commissioners to consider by the end of this year.

The NRC is also debating whether it should give greater consideration to “qualitative factors” in cost-benefit analysis, such as the societal impacts of land contamination and evacuations. Currently when the NRC evaluates new reactor safety requirements, it considers only the direct monetary costs of such disasters—like the value of lives lost and condemned land, and the cost of decontamination—and ignores the social costs of a large population of permanently displaced people. Those factors are hard to quantify, but the NRC needs to find a way to take them into account.

Stay tuned.