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The economics of nuclear power are reviewed from the perspectives of investments, finance and overall competitiveness versus alternatives on a life-cycle basis. Nuclear power plants, once built, are cheap to operate but their construction is expensive, and with current commercially available unit sizes they represent a sizable financial exposure and economic risks to investors. Long lead times for planning, licensing and construction as well as payback periods counted in decades further compound investor risks. Policies that reward environmental performance generally improve the competitiveness of nuclear power. The chapter touches upon direct economic costs as well as externalities and government policy in support of the technology.

In this article we discuss a stochastic optimization model used for evaluation of long-term energy development. The model includes the following features: 1. Increasing returns to scale for the costs of new technologies with uncertain learning rates; 2. Uncertain costs of all technologies and cost/quantities for energy sources, both renewable and depletable; 3. Uncertainties in future energy demands and their volatilities; 4. Uncertain environmental constrains; 5. Clusters of linked technologies that induced technological advances.

Canada is committed to stabilizing emissions of greenhouse gases at 1990 levels by the year 2000. This paper examines the costs and benefits of meeting the key component of this commitment: energy-related carbon dioxide (CO2) emissions. The analysis uses a dynamic linear programming methodology to produce a process-oriented, techno-economic model of the Canadian energy system for the period 1990-2030. Three scenarios are analyzed to investigate the effects of sectoral vs. overall limits on C02 emissions compared to a "business-as-usual" (BAU) base case. The results from this work point to least-cost routes to CO2 emission reduction, as well as addressing the issue of "equity vs. efficiency" in achieving the reductions. Potential collateral benefits to emission reduction are also discussed.