The profit motive is strong. But in the case of natural disasters or "unnatural" ones, the profit motive conflicts with the public good.
Tokyo Electric is handling an estimated $112-billion cleanup of the nuclear plant wrecked by an earthquake and tsunami in 2011. At the same time it’s trying to operate as a company generating power for its 29 million customers. The tasks are not compatible as the utility doesn’t have motivation to invest in Fukushima as it’s a lost cause compared with businesses that will make money, said CLSA Asia-Pacific Markets analyst Penn Bowers. That’s hindering the recovery by delaying technical solutions the utility deems it cannot afford.
Read more: http://www.vancouversun.com/news/Tepco+split+looms+utility+lacks+ability+deal+with+Fukushima+disaster/9109324/story.html#ixzz2jOpiDBkP
I think that this definitely signifies a point at which the market system fails to address an externality. It seems as though it would be in the best interest of the Japanese people for the government to take over the clean up while the utility company continues to provide power to the consumers.
ReplyDelete"Tepco on Thursday reported an operating profit in the first half on efforts to cut costs and boost revenues through higher electricity rates."
ReplyDelete"... government injection into the utility’s fund for payouts to people and companies affected by the Fukushima."
Seems like only the taxpayers and the govt shouldered the burden of this disaster, not the corporation!
Agreed, this process will take forever causing the electric company to run out of funds and without government help there will be a significant loss of power and unhappy customers.
ReplyDeletePretty much what Colin said.
ReplyDelete