Answer to Question #268633 in Economics for Gabriel

Question

A lack of electricity regularly results in power failure in Lebanon. The daily gap between supply and demand may increase if the Lebanese economy continues to grow. The Lebanese Government is planning to build more power stations but there is a risk that the social costs of operating power stations may be greater than the social benefits.

Discuss whether the social costs of operating power stations are likely to be greater than the social benefits.

Answer 1

The social costs of operating power stations depend on the type of energy source. Power stations using coal result in health damages (through air pollution and climate change). Nuclear power stations are characterized by nuclear-related health risks. Power stations on renewable sources have comparatively negligible health risks and the resulting social costs.