There is a major worldwide debate about nuclear power that has important implications for its use. On one side of the debate, some analysts believe that nuclear power should be considered to be “green energy” because operation of a nuclear power plant produces very little carbon dioxide. On the other side to the debate, analysts say that the construction, fueling and waste handling with respect to nuclear power do produce a significant amount of carbon dioxide. Over the life of a nuclear power reactor, it will produce more carbon dioxide than wind, solar, geothermal and hydro power sources.
      Chang Tzi-chin is the Minister of the Taiwan Environmental Protection Administration (EPA). During a legislative session in Taipei on Thursday, he said that nuclear power cannot be considered to be green energy. That means that carbon reduction still requires renewable energy, energy efficiency, or carbon capture and storage technology.
      He considers this to be the mainstream view around the world. Environmental, social and governance investments (ESG) prohibit investing in nuclear power plant projects. MSCI is the most reputable aggregator of investment indices. It generates ESG lists by first excluding companies in the nuclear power, arms, gambling and pornography industries. Many funds that consult the MSCI ESG indices do not buy stocks or bonds of companies involved in those industries. After disregarding any of the prohibited companies, it looks at how a company’s performance indicators meet sustainability requirements. Most power plants in other countries are privately owned but many are publicly traded. MSCI-listed ESG funds ignore companies that generate revenue from nuclear power.
      For the past few years, the European Union (EU) has been publicizing it Green Deal. This is a transformation of the EU energy sector. It has adopted the EU energy classification system. This is a transparency tool that lists economic activities that meet sustainability standards. Companies that meet the standards are allowed to issue green bonds. These bonds have lower borrowing costs and fewer administrative procedures. Any fund that claims to be ESG must reveal how sustainable the companies in their portfolios really are. The EU classification system excludes nuclear power generation. Nuclear power can’t be used to account for carbon reduction efficiency.
     The EU position is that carbon reduction cannot be achieved to the detriment of the other environmental objectives. These include eliminating radioactive waste or protecting biodiversity. They believe that carbon reduction must “do no significant harm” to the environment. With respect to nuclear power, it is considered to be a major hazard in Taiwan, which is a densely populated country located in an earthquake zone.
      Another example of this concern is the proposed third liquified natural gas (LNG) terminal off the coast of Datan Borough in Taoyuan’s Guanyin District. The infrastructure for the LNG terminal has been moved farther out to sea away from the coastline and the shipping lane will not be dredged which will minimize damage to an algal reef. Even if the terminal is part of the fight against air pollution, it must comply with the principle of not causing any harm to other aspects of the environment.
     There are referendums being held next month in Taiwan that have either distorted the issue of nuclear power or have become highly politicized. Perhaps the logic that supports today’s ESG trend in global finance can assist the public to better comprehend the issue and make more informed decisions.