Coase in the Real World: UK Nuclear Dumps

After teaching the "Coase Theorem" and as usual finding real world examples hard to come by, today's news that the UK government is attempting to use incentives to entice local councils to volunteer their land to be the repository of nuclear waste is an interesting approach. There is certainly scope for a "bargain" to be struck here between the "polluter" and those on the end of a nuclear waste site.

This article is from today's Financial Times.

Taxes will fund £20bn nuclear dump

The relevant paragraphs are as follows:

David Miliband, the environment secretary, told the Commons that discussions over financing would be "difficult and complex". The government would "in due course" need to set out how the country could meet what senior Whitehall officials conceded was a large and as yet uncalculated bill.

"This is something which needs to be done by government, not just by one department," said Mr Miliband. Privately, senior government insiders endorsed industry estimates that the construction bill could be £10bn-£20bn. Agreement on the design of a bunker and where it should be sited would take years.

Mr Miliband confirmed that councils would be invited to volunteer to host the proposed nuclear dump. Any town or city chosen would benefit from investment in local transport -networks and their social fabric. The devolved Scottish and Welsh administrations would take part in the -process.

No community would be forced to accept a burial site; that would only be built"in a geologically suitable area".