Despite economic downturn, nuclear energy commerce is still worrisome

By Karthika Sasikumar, December 1, 2009

At the beginning of 2008, the nuclear power industry’s euphoria over the much-hyped “nuclear renaissance” was in full swing. But as that year drew to a close, the hopes for a revival seemed delayed, if not derailed, due to faltering world economies. Little has changed this year to alter that prospect. As the global financial crisis has continued, demand for energy has plummeted along with the world’s stock markets. Such news may help calm international security experts, who fear that a proliferation of nuclear energy know-how could lead to nuclear weapons proliferation.

At the beginning of 2008, the nuclear power industry’s euphoria over the much-hyped “nuclear renaissance” was in full swing. But as that year drew to a close, the hopes for a revival seemed delayed, if not derailed, due to faltering world economies. Little has changed this year to alter that prospect. As the global financial crisis has continued, demand for energy has plummeted along with the world’s stock markets. Such news may help calm international security experts, who fear that a proliferation of nuclear energy know-how could lead to nuclear weapons proliferation. Yet in the current economic environment dangers persist and there are still plenty of reasons to worry.

Nuclear distrust. Even if the majority of new nuclear plans never come to fruition, mere high-level discussion of the nuclear energy option can lead neighboring states to develop nuclear technologies themselves. The links between nuclear energy and nuclear weapons create strong incentives for states to respond to any nascent nuclear weapons capability in a rival by preparing against that eventuality. The rival may merely be interested in nuclear power–but it might also be acquiring a weapons capability. Whether a single centrifuge ever spins or a single kilowatt is generated, the lurking fear of the dual-use option will lead to regional mistrust.

It already has.

The Middle East is a prime example. Iran, with each revelation about the extent of its ostensibly peaceful nuclear program, has given its neighbors more reasons to acquire their own dual-use capabilities. For instance, Egypt has announced plans to build a reactor at El-Dabaa on the Mediterranean. Similarly, the Gulf Cooperation Council (consisting of the United Arab Emirates, Bahrain, Saudi Arabia, Oman, Qatar, and Kuwait) decided in 2006 that its members would cooperate on civil nuclear power with the first joint plant to be announced next year. Additionally, Saudi Arabia and the United Arab Emirates each have signed agreements to cooperate with the United States on nuclear energy. Algeria, Jordan, and Morocco also have shown interest in nuclear power—all after Iran’s program came to light.

Aware of the growing concerns in the Persian Gulf, Secretary of State Hillary Clinton hinted earlier this year that Washington would be willing to offer security guarantees to help reassure its regional allies (e.g., upgrading allies’ defenses and extending the U.S. nuclear umbrella). Egyptian President Hosni Mubarak, however, brushed off this suggestion pointing out that such an agreement would necessitate foreign troops in Egypt and implicitly accept Iran as a regional nuclear power.

South Asia’s nuclear arms race is a case in point of what could happen in the Middle East. In 1974, India tested its “peaceful” nuclear device in the Rajasthan desert (manufactured partly by diverting technology and material from its civilian nuclear program). Prime Minister Indira Gandhi contacted her Pakistani counterpart Z. A. Bhutto, dismissing fears that the move had destabilized regional security. She wrote that the energy crisis, especially acute at that time, made it vital to exploit the potential of nuclear energy, which she described as a “ray of hope for mankind.” Bhutto, however, had already begun a Pakistani military nuclear program, and the Indian detonation only added impetus to Islamabad’s quest for the bomb. The race for a Pakistani nuclear weapon in the decades that followed allowed A. Q. Khan to create his nefarious proliferation network that sold nuclear secrets to North Korea and Iran.

New Delhi’s leadership long claimed that its nuclear program was part of its economic development efforts. (Tehran has echoed such claims.) This rationale, along with Cold War considerations, enabled New Delhi to successfully cajole donor countries that were worried about the diversion of civilian technology to military aims. Linking the country’s nuclear program to development also allowed New Delhi’s nuclear energy establishment to build domestic support and harness the combined strength of the country’s democratic institutions, nationalism, and hopes for upward mobility.

Today India continues to use such arguments to defend its nuclear program, even as it has emerged as a major world economy. The U.S.-India agreement on civil nuclear cooperation–which is widely seen as tacit U.S. acceptance of India’s nuclear arsenal–was promoted by New Delhi as a recognition of the country’s technological sophistication and a way to ensure its future energy supplies and sustain its economic growth rate.

Blasts from the past. Beyond the security threats posed by individual countries seeking dual-use nuclear technologies, the international nonproliferation system itself has proven weak at stopping proliferation–specifically the Nuclear Non-Proliferation Treaty (NPT) and the International Atomic Energy Agency (IAEA).

When the NPT and the IAEA were created, they weren’t given the full powers they needed to do their jobs effectively. In the decades after World War II, countries viewed nuclear power as an incredibly positive discovery, which was why developing countries fought to retain the right to nurture it indigenously. It was believed at the time that nuclear fission offered these countries the potential for a revolutionary leap into the future, enabling them to skip several stages of development. Thus developing nations fought long and hard to secure the inclusion of Article IV in the NPT, allowing the development of nuclear energy for specifically peaceful purposes.

And so, the pillars of the nonproliferation regime were founded with a divided mandate–both to control the spread of nuclear weapons through safeguards and verification regimes and to encourage the peaceful development of nuclear energy and science. The IAEA’s founding statute vows that it “shall seek to accelerate and enlarge the contribution of atomic energy to peace, health, and prosperity throughout the world.” At the same time, the agency was intended to verify, per Article III of the NPT, that there would be no “diversion of nuclear energy from peaceful uses to nuclear weapons or other nuclear explosive devices.” Yet such a distinction is difficult to make since knowledge of nuclear technology can be used both for good and for ill.

At the same time, certain non-nuclear weapon states wanted to guarantee that the agreement wouldn’t deny them the potential to build a viable nuclear deterrent if it was some day required. Accordingly, the NPT doesn’t restrict the size of civilian fissile material stockpiles. The treaty also has an exit provision that is relatively simple–a state can withdraw with 90 days notice if it judges that continued compliance would harm its “supreme interests.” These flawed institutions and their mandates continue to stymie effective international nonproliferation efforts today.

Many have recognized the faults in the existing nonproliferation regime, and as such solutions have been proposed. Technical answers include so-called proliferation-resistant reactors. (Although reactor designs and concepts appear promising, prototypes have yet to be produced.) Other solutions involve institutional fixes, with different strategies for parceling out the various processes of the nuclear fuel cycle so that no one country can control or divert fissile material. These proposals include arrangements for guaranteeing nuclear fuel supplies, international fuel banks, and multilateral control of reactors. While some nations are willing to accept such arrangements, others have balked.

A safer nuclear revival. If the international community truly hopes for a safe nuclear revival responses must go deeper. First, the international community must spare some time from tackling full-blown proliferation crises in Iran and North Korea to work with states like Egypt that are just starting civilian nuclear programs. To help build and sustain a coalition interested in keeping the application of nuclear energy strictly peaceful, the international community should:

  • Invite diplomats and scientists from nuclear aspirant countries to international forums and appeal to their professional and national interests by offering genuine technology transfers. The nuclear industry has a role to play here as well, once it recognizes that proliferation in one state or region will ruin its business prospects elsewhere.
  • Reduce the prestige associated with nuclear technology. Iran’s pursuit of nuclear technology has been motivated by a desire to raise its regional and international profile as much as it has been about providing energy and, potentially, weapons.
  • Candid and objective discussion about the reality and feasibility of nuclear power plants (e.g., whether national electricity grids can accommodate them, whether a sophisticated and trained workforce exists to build and operate them, and whether countries can handle the long time frames that nuclear power entails from construction to eventual decommissioning) would help sort those that are genuinely interested in pursuing nuclear energy from those that are simply interested in raising their prestige and/or developing weapons.
  • A genuine commitment from the dominant nuclear powers to the security concerns and requirements of weaker states. This would involve admitting that such states have genuine security needs, and viewing their nuclear choices not in isolation, but as responses to regional and global decisions. In the Middle East, for example, it would be a mistake to evaluate each attempt at nuclear development individually. Egypt seeks to frame the problem in terms of the denuclearization of the entire Middle East, thus drawing attention to both Israel and Iran, which is the focus of global attention.
  • The nuclear weapon states should seriously rethink the wisdom of signing bilateral nuclear energy deals with supposedly “safe” allies in light of the persistent security challenges that nuclear technology poses and the ramifications of its development.

Scholars and policy makers worry about the threat of nuclear fuel or facilities diverted to military uses by governments (or worse, by a terrorist group), however, the strategic consequences of mere high-level discussion of the nuclear energy option can threaten regional and eventually global security as well and should not be ignored.

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