03/21/2011 05:02 pm ET | Updated May 25, 2011

Does Nuclear Energy Make Sense?

It's too soon to say anything definitive about what's going on in Japan. Who really knows what the outcome might be from the frightening breakdown of the Fukushima Daiichi Nuclear Plant (the radioactive releases could go on for months)? But the speculation about what this means for a much-touted nuclear "renaissance" in the U.S. began in earnest last week. As the New York Times reported, "U.S. Nuclear Industry Faces New Uncertainty."

Some quick background: For years, no new nuclear plants were built in the U.S. But nuclear power is now being taken seriously again. Roughly 30 to 40 applications for new plants or expansions to existing facilities are moving through the process with the Nuclear Regulatory Commission (NRC). One of the main reasons nuclear is "back" is that it satisfies two very distinct interest groups: (1) pro-energy lobbyists and companies that usually sit on the right (although President Obama has adopted the rallying cry of "all-of-the-above" as an energy independence strategy as well), and (2) those who want to aggressively fight climate change, who usually camp out on the left.

In the past, being an "environmentalist" of any stripe meant being anti-nuclear. More recently, however, some high-profile environmentally-minded people, such as Whole Earth Catalog founder Stewart Brand, have been promoting nuclear power, mainly because it might hold the promise of fighting climate change (since it produces virtually no carbon emissions). To me, the conversion of environmentalists to pro-nuclear advocates is a sign of just how terrifying they find the prospect of climate change specifically.

Okay, so jump back to today. For obvious reasons, nuclear is being questioned again. I'll admit to being incredibly conflicted about this source of energy and I usually punt when asked the question. But we have to take the recent events into account. Pretending that it should have no impact on the debate - see Senator Mitch McConnell's comments to this effect -- is absurd.

The reality is that we're debating energy strategy anyway, for reasons ranging from national security to national competitiveness to climate change. The kind of devastating accident unfolding in Japan only highlights the issues and brings to the fore the conversation we're already having. But as a result I find myself asking two main questions about grid-based energy (as opposed to transportation fuels, which nuclear does not play a role in).

1) Does nuclear energy make sense?

We can debate this topic endlessly and there are seemingly good reasons that environmental groups and others have changed their views on nukes. Put most simply, it provides steady base power (20% of our electricity today) and is close to "zero carbon." So as a longer interim solution, until the grid and economy are cleaner, it could be logical. But the most compelling argument I've heard against nuclear is not about safety (although, again, how can we not include that in the discussion given what's going on?). No, it's about cost.

For solid analyses on all things energy, I look to long-time expert Amory Lovins and his impressive assortment of in-depth studies. In a couple of reports, "Four Nuclear Myths," and "Nuclear Power: Competitive Economics and Climate Protection Potential," Lovins tackles the economics of building and insuring nukes, among other things. In short, compared to focusing on energy efficiency, nuclear is really expensive. [Since I first posted this, Lovins wrote a HuffPost piece with much more detail on these arguments.]

Without going into massive detail on economics, I've always liked the really simple logic around renewables -- they have zero variable cost (wind, sunshine, and underground heat are free). Lovins and others put more data around how the economics of renewables will win out over time, but basically, free is hard to beat.

2) Does any centralized energy make sense?

This may be a more heretical question, but it may actually drive us to an answer faster than the question about nuclear power itself: why do we generate energy at large plants on a grid to begin with? There are efficiencies of course, and the need for baseload power, but there are also massive losses of energy as we step it down from the plant to the grid to our homes and buildings. Instead, why not build a far more distributed energy system (or at least invest only in distributed energy going forward)?

What I mean by this is solar on every roof, geothermal in every basement, local wind turbines in every neighborhood and on city buildings, and an electric car storing energy in every garage.

This vision of a clean energy grid is not a tree-hugger fantasy; in fact, it's already on its way.

Renewable energy experts have told me that cost of producing solar panels is down 50 to 70 percent in the last few years, a direct result of massive investment in the clean economy by China, which has become a solar manufacturing powerhouse. As solar entrepreneur and CEO of the Carbon War Room Jigar Shah says, "China is doing to solar panels what it did to computers and iPhones -- bringing the cost way down."

The other major argument for a big distributed energy push is security. Former CIA director Jim Woolsey likes to point out that a tree branch in Ohio brought the entire Northeast grid down in the summer of 2003. As he says, terrorists "are smarter than those Cleveland tree branches and could easily cause a major catastrophe."

On a more local level of "security," we can also discuss safety, both personal and environmental. Traditional energy is getting harder and more dangerous to find. We don't dig a mile under the ocean for fuel for the heck of it. That's where we have to go now. Underwater drilling and nuclear energy are some of the most complicated technologies in the world, which means there are very large inherent risks. A spill of oil or nuclear radiation can affect millions of people. Local energy is local in its risks also. It's not too cheeky to point out that if a natural disaster causes an offshore wind turbine to fall, or a solar panel to rip off a house, there's no spill and limited danger.

Between basic economics, security, national competitiveness (the push to a clean economy creates jobs), the logic for a distributed, non-nuclear, non-fossil-fuel grid and transportation network seems very strong.

I'm sure many readers have passionate, and different, opinions on this issue, so let's have the conversation. But please, let's assume that we all have the best interests of the business community and country at heart. We all want a strong, healthy, sustainable economy -- the question is whether nuclear should be a part of that future. That's looking more and more unlikely each day.

(This post first appeared at Harvard Business Online. See the comments on this post for a nice debate on the topic.)