Seven years ago, I collected all the available cost estimates for nuclear power. The US Nuclear Energy Institute suggested a penny a kilowatt hour. The Royal Academy of Engineering confidently predicted 2.3p. The British government announced that in 2020 the price would be between 3 and 4p. The New Economics Foundation guessed that it could be anywhere between 3.4 and 8.3p; 8.3 pence was so far beyond what anyone else forecast that I treated it as scarcely credible. It falls a penny short of the price now agreed by the British government.

I still support nuclear power. I believe that to abandon our primary source of low carbon energy during a climate change crisis would be madness. It would mean replacing atomic plants with something much worse.

We should, of course, cut our profligate demand for power as much as possible. But if transport and heating are to be powered by low-carbon electricity, total demand is likely to rise even with the most parsimonious use of energy.

And we should make as much use as we can of renewables. But the biggest onshore wind schemes could supply only a fraction of the low-carbon power a nuclear plant can produce. For example, the controversial deployment in mid-Wales would generate just one 14th of the proposed output of Hinkley C. Offshore wind has greater potential, but using it to displace most of our fossil fuel generation is a tough call, even when it's balanced with a nuclear power baseload. Without that you would explore the limits of feasibility. If every square metre of south facing domestic roof and suitable wall in the UK were covered with solar panels, they would produce 9% of the energy currently provided by fossil fuels.

The harsh reality is that less nuclear means more gas and coal. Coal burning produces, among other toxic emissions, heavy metals, acid sulphates and particulates, which cause a wide range of heart and lung diseases. Even before you take the impacts of climate change into account, coal is likely to kill more people every week than the Chernobyl disaster has killed since 1986. It astonishes me to see people fretting about continuing leaks at Fukushima, which present a tiny health risk even to the Japanese, while ignoring the carcinogenic pollutants being sprayed across our own country. But none of this means that we should accept nuclear power at any cost. And at Hinkley Point the cost is too high.

Nils Pratley warned in the Guardian last week that "if Hinkley Point's entire output is tied to the rate of inflation for 40 years, we could be staring at a truly astronomical cost by the end of the contract." The City analyst he consulted reassured him that "the government surely can't be that dumb". Oh yes? Payment to the operators, the government now tells us, will be "fully indexed to the consumer prices index". Guaranteed income for corporations, risk assumed by the taxpayer: this deal looks as bad as any private finance initiative contract.

That's not the only respect in which the price is too high. A fundamental principle of all development is that we should know how the story ends. In this case no one has the faintest idea. Cumbria – the only local authority which seemed prepared to accept a dump for the nuclear waste from past and future schemes – rejected the proposal in January. No one should commission a mess without a plan for clearing it up.

But this, above all, is a wasted opportunity. By the time a European pressurised reactor at Hinkley Point is halfway through its operating life, it will look about as hip as a traction engine.

I understand that, with a project this big and timeframes this long, the government needs to pick a technology, but you would expect it to try to pick a winner. The clunky third-generation power station chosen for Hinkley C already looks outdated, beside the promise of integral fast reactors and liquid fluoride thorium reactors. While other power stations are consuming nuclear waste, Hinkley will be producing it.

An estimate endorsed by the chief scientific adviser at the government's Energy Department suggests that, if integral fast reactors were deployed, the UK's stockpile of nuclear waste could be used to generate enough low-carbon energy to meet all UK demand for 500 years. These reactors would keep recycling the waste until hardly any remained: solving three huge problems – energy supply, nuclear waste and climate change – at once. Thorium reactors use an element that's already extracted in large quantities as an unwanted byproduct of other mining industries. They recycle their own waste, leaving almost nothing behind.

To build a plant at Hinkley Point which will still require uranium mining and still produce nuclear waste in 2063 is to commit to 20th-century technologies through most of the 21st. In 2011, GE Hitachi offered to build a fast reactor to start generating electricity from waste plutonium and (unlike the Hinkley developers) to carry the cost if the project failed. I phoned the government on Monday morning to ask what happened to this proposal. I'm still waiting for an answer.

That global race the prime minister keeps talking about? He plainly intends to lose.

• This article was amended on 29 October 2013 to clarify that if 'every square metre of roof and suitable wall in the UK were covered with solar panels, they would produce 9% of the energy currently provided by fossil fuels' is a reference to south facing roofs of domestic homes.

Twitter: @georgemonbiot. A fully referenced version of this article can be found at Monbiot.com