UPDATE: As some of you have pointed out, the nuke plants are near Augusta. Thanks for the correction.

Johnny Isakson and Saxby Chambliss were happy to claim credit for the Obama administration’s announcement that it was guaranteeing loans that would help build nuclear reactors on Georgia’s coast. But it’s an odd thing for the two Republicans, who usually argue that the government ought to stay out of private industry.

In fact, economists might argue that the huge government subsidies are little different from the bank bail-outs and bail-outs for the automotive industry.Liberals and conservatives have argued against the federal guarantees. From the WaPo:

Nuclear power plants “are simply not economically competitive now, and therefore they can’t be privately financed,” said Peter Bradford, an adjunct professor at Vermont Law School and a former member of the Nuclear Regulatory Commission. “There are many cheaper ways to displace carbon, and there are many cheaper ways to provide for electric power supply.”

Jack Spencer, a fellow at the Heritage Foundation and a supporter of nuclear power, warned: “Loan guarantees do not a nuclear renaissance make.” He said the guarantees would “perpetuate the problems that have plagued nuclear energy for 30 years: the regulatory structure and nuclear waste [disposal] and too much government dependence.”

William O’Keefe, who heads a science-related think tank in Washington, doesn’t think the loans are such a good idea. From the WaPo:

If private companies are unwilling to risk their capital on new nuclear plants, why should the taxpayer take on part of that risk? The answer is: We shouldn’t.

The U.S. taxpayer has been subsidizing nuclear power since its inception, and it has yet to achieve its potential. Some of this is the fault of government policy, but some of it is just plain economics. The cost of a new nuclear plant has been estimated to be on the order of $4 billion, with some estimates being over $10 billion when cost overruns are taken into account. That makes the cost of nuclear-produced electricity very high.

The Obama administration is promoting nuclear power because it does not involve CO2 emissions. But that is only one criterion, and it should be judged on a cost-benefit basis. How much would new plants coming online over the next two decades reduce the climate change risk? And are there more-cost-effective alternatives for reducing that risk? There is growing evidence that the risk of climate change has been exaggerated, and that certainly weakens the case of the administration.