As addressing climate change becomes a high priority it seems likely that there will be a surge in interest in deploying nuclear power. Other fuel bases are too dirty (coal), too expensive (oil, natural gas) or too speculative (solar, wind) to completely supply the energy needs of the global economy. To the extent that the global society does in fact choose to expand nuclear power there will be a need for additional production. That increase in demand for nuclear power will inevitably lead to an increase in demand for uranium. While some of the increased demand for uranium will be satisfied by expanding production from existing deposits, there will undoubtedly be pressure to find and develop new deposits, perhaps quite rapidly.

A similar urgency to add to known deposits of uranium occurred in the United States immediately after the SecondWorldWar. A main premise of my presentation is that there is much one can learn from investigating past behavior. Past work has argued that firms tended to over-invest in exploration during the period of AEC control, and that AEC pricing policies were an important causal factor. Looking forward to the potential expansion in demand for uranium, it is important that society be mindful of these past mistakes, and that policies be put in place that will present a similar mis-allocation of resources in the future. In particular, I argue there is a valid concern that policies will induce levels of industrial activity that fail to fully capture all potential social gains; these inefficiently low social exploration levels are linked to an departure between the private and social values of exploration information.

This seminar has been jointly organized by FEEM and IEFE, Bocconi University.