Light water reactors (LWRs) like those at Fukushima, which use water as a primary coolant, produce most of the world s nuclear power. The huge quantities of local water that LWRs consume for their operations become hot water outflows, which are pumped back into rivers, lakes, and oceans.

SINGAPORE Japan s nuclear crisis is a nightmare, but it is not an anomaly. In fact, it is only the latest in a long line of nuclear accidents involving meltdowns, explosions, fires, and loss of coolant accidents that have occurred during both normal operation and emergency conditions, such as droughts and earthquakes.

For the Fukushima nuclear power plant, a 1,000 year flood and ordinarily innocuous design defects combined to deprive the reactors of circulating water coolant and cause serious radiation leaks. In financial markets, an unexpected collapse in real estate securities and design defects in the derivatives and repo markets combined to damage core financial institutions ability make good on their payment obligations.