Nuclear power, risk, and retroactivity.

Author:Hammond, Emily
 
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ABSTRACT

The 2011 Fukushima nuclear disaster presented a familiar scenario from a risk perception standpoint. It combined a classic "dread risk" (radioactivity), a punctuating event (the disaster itself), and resultant stigmatization (involving worldwide repercussions for nuclear power). Some nuclear nations curtailed nuclear power generation, and decades-old opposition to nuclear power found a renaissance. In these circumstances, risk theory predicts a regulatory knee-jerk response, potentially resulting in inefficient overregulation. But it also suggests procedural palliatives that conveniently overlap with administrative law values, making room for the engagement of the full spectrum of stakeholders. This Article sketches the U.S. regulatory response to Fukushima. From a positive perspective, this story provides a useful case study for understanding administrative agencies' responses to disasters and the concomitant role of risk perception. But this story also invites using an administrative law lens to take a fresh look at the issues of retroactivity and stakeholder engagement. This Article concludes by identifying insights as well as research needs for both regulatory responses to disaster and classic administrative law.

TABLE OF CONTENTS I. INTRODUCTION II. RISK PERCEPTION AND NUCLEAR RISK REGULATION A. Risk Perception and Nuclear Power B. The Nuclear Regulatory Scheme and the Backfitting Rule III. THE REGULATORY RESPONSE TO FUKUSHIMA IV. RETROACTIVITY AND PRINCIPLES OF ADMINISTRATIVE LAW A. Retroactivity B. Principles of Administrative Law and Stakeholder Engagement V. CONCLUSION I. INTRODUCTION

The tragic 2011 Tohuku Earthquake and Tsunami in Japan presented a familiar scenario from a risk perception standpoint. The events combined a classic "dread risk" (radioactivity), a punctuating event (the Fukushima nuclear disaster), and resultant stigmatization (involving worldwide repercussions for nuclear power). (1) The Fukushima disaster revived memories of the Three Mile Island and Chernobyl disasters and provided a reminder of the global interconnectedness of nuclear power. In response, some nations curtailed nuclear power generation, and decades-old opposition to nuclear power found a renaissance. (2) In the United States, Fukushima coincided with increasing concerns about spent-fuel policy that threatened to dampen recent initiatives aimed at a nuclear resurgence. (3)

With much at stake for nuclear power, the Nuclear Regulatory Commission (NRC) quickly appointed a task force to review its regulations and make recommendations in light of lessons learned from Fukushima. (4) The resulting Near-Term Task Force (NTTF) Report concluded that continuing reactor operation would not "pose an imminent risk to public health and safety." (5) However, it also made a number of recommendations, many of which NRC has begun to implement. Some of the recommendations and resulting regulatory activity are detailed below. For now, the important point is that to carry out the NTTF recommendations, NRC issued a series of orders modifying existing nuclear power plant licenses. (6)

The prospect of modifying existing licenses--termed "backfitting"--raises a host of issues. First, backfitting is a form of retroactivity, which is disfavored throughout American law. To be sure, there are several types of retroactivity. (7) For example, suppose NRC were to adopt a rule requiring all existing operators to install emergency back-up electricity generation equipment. If NRC also imposed penalties for failing to have such equipment prior to the new rule's issuance, it would be imposing new sanctions on past conduct. This type of retroactivity is particularly problematic. (8) But if NRC merely required the equipment going forward, the rule would be only "secondarily]" retroactive in that it would upset operators' expectations by imposing new costs in connection with existing licenses. (9) Courts are far more worried about the first category than the second. But both have the potential to upset expectations, undermine reliance, and destabilize the economic assumptions under which regulated entities operate. (10)

Second, backfitting is situated at the intersection of high-stakes interests: costs to industry, safety for workers and the public, and confidence in the nation's nuclear agency. Yet it has received scant treatment in the courts and scholarly literature. (11) The procedures by which backfitting is ordered, and the substantive analyses that accompany such regulatory action, deserve a closer look. Nuclear energy is uniquely poised to offer insights for disaster response in many different contexts that may call for post hoc regulatory adjustments. Indeed, the field is in some sense an ideal laboratory: it provides a closed system of regulation, (12) a unified industry, (13) a discrete number of regulated units, (14) a comprehensive statutory scheme, (15) and a relatively unchanged technology since its first deployment. (16)

Yet all these attributes point to a third set of issues lurking behind the backfitting model. During the 1970s and 1980s, nuclear power construction was famously plagued by delays and cost overruns. (17) Some of these problems were caused by the need to make safety upgrades throughout the three-part licensing process; others were caused by litigation; still others related to the overall economy.18 Certainly Three Mile Island and Chernobyl raised serious safety concerns during this same time period. In fact, no new reactors were completed after Chernobyl, save Tennessee Valley Authority's Watts Bar 1, which came online in 1996 but had been ordered in 1970. (19)

Despite the many concerns about nuclear power, it fills an important need for electricity reliability by providing steady base-load power, comprising 20 percent of U.S. electricity generation. Its lifecycle carbon emissions are comparable to hydro and wind power, making it an important player in climate change policy. (20) And it emits none of the criteria pollutants and toxics that plague its baseload competitor, coal. (21) Of all the electricity fuels, nuclear power most comprehensively internalizes negative externalities. (22) But this puts it at a competitive disadvantage in the wholesale markets--particularly relative to coal and natural gas-fired generation--and several plants have announced closures and plans not to renew their licenses. (23) The industry argues that unless there are significant market reforms, nuclear power plants will not be economically viable. (24) In other words, the future of nuclear power is uncertain, and the industry's ability to respond to newly identified safety needs while operating economically is only becoming more urgent. (25)

These many issues are beyond the scope of a single essay. (26) My modest goals here are twofold. First, I document NRC's application of the backfit rule as a response to Fukushima, drawing from the risk perception literature to shed light on this regulatory approach. Second, I examine the backfit rule through an administrative law lens, focusing on retroactivity and the "administrative law values of participation, deliberation, and transparency." (27) The role of these principles is of particular importance in a field where safety is paramount, risk perceptions run high, and disasters can never be fully predicted. And accounting for administrative law principles sheds light on how other regulatory regimes might approach hazard mitigation and disaster response in light of lessons learned. (28)

This Article proceeds as follows. Part I sets the stage by providing a brief overview of the risk perception mechanisms at work in nuclear power, linking those mechanisms to nuclear power regulation, and describing the regulatory structure for backfitting. Part II details the regulatory response to Fukushima, including the use of the backfitting rule to date. Part III takes up the administrative law concerns that backfitting raises and explores how the retroactivity principles fare in this particular regulatory context. Part IV identifies links between broad statutory discretion, highly detailed regulatory regimes, and deferential judicial oversight that can inform the rationality of agency behavior in the wake of disasters.

  1. RISK PERCEPTION AND NUCLEAR RISK REGULATION

    Basic risk perception principles aid in understanding the importance of the nuclear regulatory scheme to public acceptance of nuclear power. First, a distinction is helpful. The term "risk" can refer to risk assessment, risk perception, and/or risk management. Much of the nuclear regulatory scheme implements risk assessment methods, which attempt to measure the cumulative likelihood and magnitude of various hazards. (29) The assessments of risk are used to develop mitigation strategies, which attempt to reduce the likelihood of a hazard, its magnitude, or both. (30) Part II below provides details on how these concepts were implemented post-Fukushima. The ways people perceive risk, however, relate to both the extent of any regulatory response, and the public's acceptance of such response. This Part provides a brief overview of just a few of the risk perception concepts that relate to Fukushima and nuclear power.

    1. Risk Perception and Nuclear Power

      Decades ago, pioneers of risk perception Amos Tversky and Daniel Kahneman observed that humans perceive risk in ways that deviate from mathematical predictions. (31) Indeed, due at least in part to their perceptions, humans seldom behave as rational economic actors. (32) It so happened that risk perception research came of age at the same time as atomic energy. As a result, many of the pioneering studies of risk perception involved nuclear power. (33)

      One such line of research resulted in the theory of the psychometric paradigm, (34) which categorizes risks according to how dreaded (35) and how familiar (36) they are. Risks that are high-dread and low-familiarity are perceived to be the...

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