Decommissioning costs for the Fukushima disaster will exceed 11 trillion yen ($106 billion), threatening TEPCO's solvency:
Finbarr Flynn Tesun Oh Emi Urabe October 6, 2016 Fukushima Cleanup Talks Put Tepco Survival Risk in Focus. Bloomberg, http://www.bloomberg.com/news/articles/2016-10-06/fukushima-clean-up-talks-put-tepco-survival-risk-back-in-focusTEPCO is asking the government for help:
Tokyo Electric Power Co. is still struggling to put the Fukushima nuclear disaster behind it, admitting this week that paying for decommissioning the plant in one go risks leaving it insolvent…. The March 2011 nuclear accident and its fallout will ultimately cost more than 11 trillion yen ($106 billion), according to a study by academics including Kenichi Oshima, a professor of economics at Ritsumeikan University. Tepco has estimated that decommissioning alone will cost about 2 trillion yen.
Osamu Tsukimori and Kentaro Hamada October 5, 2016 Tepco calls for government help to curb impact of rising Fukushima costs. http://uk.reuters.com/article/uk-tepco-outlook-idUKKCN1250JTTEPCO is probably in on the the push to limit Japan's utilities' liabilities for future serious nuclear accidents:
The operator of the nuclear power plant destroyed in the Fukushima disaster five years ago has asked Japan's government for help in avoiding the risk of the utility going bankrupt should there be a sharp rise in the full estimated clean-up costs. Tokyo Electric Power Co Holdings Inc (9501.T) didn't specify what kind of help it was seeking, but people familiar with the matter said Japan's biggest utility is looking for new rules to avoid having to book a huge loss in its accounts if it is estimated that there will be big cost overruns for decommissioning the power station.
Utilities may get caps on liability in time of serious nuke accidents. (October 2, 2016). The Asahi Shimbun, http://www.asahi.com/ajw/articles/AJ201610020022.htmlThe process of shifting crises costs incurred by private parties to government has been described in terms of the “privatization of gain and the socialization of losses.”
In the event of a serious nuclear accident, the government is considering capping the liability of electric power companies and placing the burden beyond that on the public in the form of taxes or higher electricity rates. The Cabinet Office plans to submit the plan to an experts’ panel along with the current program, which does not contain such caps, sources said.
Economists George Akerlof, Paul Romer, Robert Hall, and Greggory Mankiw[i] helped formulate contemporary understandings of how organizations can privatize profits while socializing losses in their description of how excessively risky conduct by limited liability corporations can result in government bailouts and/or bankruptcy proceedings that allow retention of private earnings. The economic and social costs of the company’s risk conduct are therefore essentially socialized when assumed as a government liability.
I have documented through my analysis of financial and energy sectors that this general practice of privatizing gain and socializing losses tend to be enjoyed by institutionally vested corporations with close ties to government.
I also point out that net effect is typically the “privatization of risk” as individuals ultimately are forced to assume myriad economic and social costs incurred by the corporation’s risky behavior, costs ranging from higher taxes to ruined livelihoods as fishing and agriculture are limited by radioactive elements in the soil and water, bioaccumulating in flora and fauna.[ii]
In the Fukushima disaster we see how the allocation of risk in the wake of the disaster has systematically disadvantaged citizens as risks have been socialized in the costs of government bailouts and privatized as citizens have been transformed into radiation refugees.
[i] George A. Akerlof, Paul M. Romer, Robert E. Hall, N. Gregory Mankiw 1993. Looting: The Economic Underworld of Bankruptcy for Profit. Brookings Papers on Economic Activity, 1993, No. 2 (1993), pp. 1-73 Stable URL: http://www.jstor.org/stable/2534564 Accessed: 28/03/2009 20:32
[ii] Majia Nadesan. 2013. Fukushima and the Privatization. Palgrave Pivot, 2-3.