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The Economic Impact of the Yucca Mountain Nuclear
Waste Repository on the Economy of Nevada

Prepared by
Mary Riddel
Martin Boyett
R. Keith Schwer
Center for Business and Economic Research
University of Nevada, Las Vegas
September 29, 2003

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VI. CONCLUSION from this 130 page document

This research summarizes the current and expected future economic impacts of the YMP on the state of Nevada. The findings show that YMP could provide a stable source of revenue, income, and employment for the state.

Currently, the scientific investigation of the suitability of the site continues as the DOE prepares to apply to the NRC for a license to operate the site as a waste storage facility. If the YMP were discontinued, economic losses, relative to the current economy, would be substantial. In 2000, the YMP contributed $195.7 million to the Nevada economy and an additional $188.6 million in 2001. The YMP was responsible for 3,650 jobs in 2000. This translates into a real disposable income of roughly $131 million earned each year in the state of Nevada.

If the Yucca Mountain facility is approved and licensed, the economic benefits would continue to flow into Nevada as a result of employment and procurement activity. New employment linked to the project is expected to peak during the construction phase at nearly 4,500 jobs. Employment gains will average 2,000 to 2,500 above and beyond the baseline job forecast during the transportation and operations phase. RPI associated with the YMP grows steadily over the years analyzed for each of the five alternative transport routes and varies somewhat over the alternatives. The economic assessment shows that substantial RPI impacts can be expected ranging from about $51 million during the initial construction phase, peaking at roughly $150 million in 2035. Like RPI, GSP impacts are largest during the construction phase. Wages, salaries, and in-state procurement activity are expected to boost state GSP by as much as $228 million during the peak of the construction phase in 2006. Average annual GSP impacts over the transportation and operations phase exceed $102 million annually, topping $127 million in many years.

It is noteworthy that YMP revenues entering the state do now and will in the future lack the cyclicality in associated with Nevada’s current primary industry, gaming and tourism. YMP jobs will be concentrated in relatively high-wage industries such as construction, professional services, and engineering. As such, they can provide a steady stream of income to Nevada residents that are largely independent of national and international economic cycles.

We should also note at this point that economic impacts on the state of Nevada included in this report are largely wage and salary based. In other words, we assume that the bulk of the capital, machinery, and construction materials are purchased out of state. This is a reasonable assumption because Nevada currently does not have the manufacturing or production base to supply much of the needed material. Nevertheless, any additional YMP dollars spent in Nevada over and above those considered in the report will generate new spending activity and the economic impacts would undoubtedly be larger than estimated here. Therefore, the numbers we present are likely to be conservative estimates of the true economic impact.

This study also examined the potential economic impacts and social costs of risk arising from transporting waste to the site. Our survey of Nevadans living near the proposed rail-transport routes reveals that there may be an initial housing market impact that has short- lived but significant negative economic consequences. Job losses, relative to the baseline forecast growth of nearly 21,000, are expected to peak in the first year of transport at 3,300. In other words 17,700 new jobs, rather than 21,000, will be created in Nevada in 2010. Housing prices, predicted to rise by about 5 percent in 2010, will see a one-time decrease in the growth rate by 1.7 percent with house prices instead growing by 3.3 percent that year. Price growth will return to its previous pace shortly thereafter. GSP impacts will also be observed in the early transport years (2010 – 2011) when GSP will fall short of the expected value of $85.091 billion by just over $400 million. As the population shifts to a more risk-tolerant base, the impact is expected to moderate substantially. During the remaining years, GSP losses are insignificant.

The contingent behavior and conjoint studies are used to get estimates of the WTA and WTP, respectively, of nuclear-waste transport. The estimates reveal that social costs of nuclear-waste transport could be very high if transport routes transect densely populated areas. As a result, convincing the public to allow ongoing transport of high- level nuclear waste may be challenging. Perceived risk of transport is high for both the rail and trucking alternative. The relatively large estimated social costs suggest that public opposition to transport may be strong, particularly in metropolitan areas that do not currently have any on-site temporary storage and therefore have little to gain by moving the waste.

The results of the risk model provide an avenue for mitigating the social costs and reducing local resistance to nuclear-waste transport: reducing the risk that people perceive from transport. DOE education programs can moderate public risk perception if the targeted audience finds the DOE information to be well researched and effectively presented. The importance of the public’s perception of the dependability of information cannot be understated. If credibility is compromised, then the DOE information could act to increase the public’s perception of risk, undermining the effectiveness of public risk education programs.



 

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