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is very high, perfect foresight is simply impossible, no matter how much one might be willing to pay for it.
The business environments for nuclear power (electricity business) and synthetic fuels (fuel/oil business) share some characteristics that can lead to belief-based decisions. Investment in both industries is large-scale and capital-intensive. A large-scale, capital-intensive investment usually stays in service for a very long time. Major investments in the power and oil business are typically considered in a 50-year time frame. Therefore, energy investment usually requires very long-term planning.
Furthermore, an energy planner must consider a wide array of factors (see chapter 4). The tremendous amount of required information renders accurate foresight even less likely. It is a recurrent phenomenon that long-term forecasts turn out to be extremely unreliable. Nevertheless, decision makers constantly require long-term forecasts to make their decisions. Energy forecasters are, therefore, constantly asked to perform an impossible mission. Their jobs require them to come up with numbers that nobody could possibly know. I name this peculiar jeopardy “forecaster's dilemma.”
Although forecasters constantly make mistakes, their mistakes are not random. A herding phenomenon is prevalent in energy forecasts. When the future is too uncertain to predict, forecasters often echo each other in order to escape the burden of proof. Long-term investment decisions are, therefore, often based on shared beliefs, and the shared beliefs themselves are often baseless.
The formation of shared beliefs follows social mechanisms and is subject to political manipulation. The herding phenomenon amplifies the power of unwarranted beliefs. Therefore, long-term energy planning is particularly susceptible to the distortion of official ideology. Because it is scientifically impossible to accurately predict the future, political leaders assume moral and philosophical leadership in guiding the public in their imagination about the future. The Atomic Age was portrayed as grander and more wonderful not because the dominance of nuclear power in the energy economy was scientifically assessed to be the best scenario, but because it fit the needs of U.S. Cold War ideology.