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Are we headed towards CDM endorsements for nuclear energy?

By A S Panneerselvan

Will the Indo-US defence deal pave the way for India to get Clean Development Mechanism (CDM) endorsement for its nuclear programme? So far, nuclear energy has not been formally included in CDM credits. If it is, CDM credits will give nuclear energy the Kyoto stamp of approval, encouraging developing countries to go down the nuclear road

I have been asked to write a comprehensive analysis of the recent Indo-US nuclear agreement. I have to write a requiem for myself. I have spent my entire adult life -- as a journalist, as a political commentator and as an activist -- fighting the nuclear regime and advocating moves to realise a comprehensive disarmament structure that would really eliminate these weapons of mass destruction from the face of the earth.

There are four said elements in the Indo-US nuclear deal and one unsaid. The four stated positions are: India will separate its civilian programme from its military programme and subject its civilian programme to international safeguards; there will be no need for India to adhere to the nuclear non-proliferation regime; the international Nuclear Supplies Group will start supplying nuclear fuel once the separation takes place; and the deal will ensure energy security for India. The unsaid deal is that the way will be paved for India to get Clean Development Mechanism (CDM) money for its nuclear programme under Article 12 of the Kyoto Protocol.

Before addressing the question of climate change and nuclear energy, it is important to understand the mechanism of the nuclear industrial regime. The uniqueness of the nuclear regime is that it moves swifter than others. All critiques of this regime are primarily reactive. For instance, adjustments in US laws have been made in an unusually expeditious manner. Nearly seven months before President George Bush and Prime Minister Manmohan Singh signed the nuclear deal in Delhi in March 2006, on July 26, 2005, US Congress accepted the Burr Amendment, which considers nuclear energy the cleanest energy, and decided to fund nuclear energy programmes. This is a clear indication that India's nuclear programme would be subsidised by the CDM. All this in the name of a clean environment, being sensitive to climate change, and a reduction in carbon emissions.

The International Atomic Energy Agency (IAEA) is at the forefront in pushing nuclear energy as one of the best options for the CDM. It has taken on the task of explaining the role of nuclear power in achieving sustainable development in developing countries and in mitigating GHG (greenhouse gas) emissions. Three senior members of the Indian nuclear establishment -- A K Nema of the Nuclear Power Corporation of India, B K Pathak of the Bhabha Atomic Research Centre and R B Grover, technical advisor to the chairman of the Indian Atomic Energy Commission -- have presented the Indian case to the IAEA, which presented it at the Sixth Conference of Parties to the UNFCCC at The Hague.

These members of the nuclear establishment argue that nuclear power is economically competitive; that coal-based power plants are located far from the pitheads, thereby increasing their total cost; that replacing coal plants with nuclear plants reduces GHG emissions by 1.87 million tonnes of carbon each year; that the total emission offset over the lifetime of a nuclear power plant is 56 million tonnes of carbon; and that to preserve the environment it is necessary to support the nuclear power option as it has an "unlimited resource base" under the CDM facilities.   

So far, nuclear energy has not been formally included in the CDM credits. Developing countries are the key to the nuclear industry's future, yet, to date, orders for new reactors have been scarce. The main barrier is economic. The huge capital cost of a new reactor and long repayment period are significant deterrents. But if CDM credits were factored in, this could change. For example, a 700 MW coal-fired power station emits about 4.5 million tonnes of carbon dioxide (CO2) a year. If a nuclear reactor was built instead, it could be claimed that it offsets this amount of CO2. Estimates of the value of CO2 per tonne vary, but for a CDM project an amount of approximately $ 10-30 a tonne is likely. Thus, the carbon offset by this nuclear reactor over a 10-year period would be valued at between $ 450 million and $ 1.35 billion (less, when future credits are discounted). An agreement between the Western supplier of the reactor and the developing country in which it is being built to subtract the value of the carbon credits from the initial capital cost of the reactor would greatly improve the economics. A 700 MW nuclear reactor costs approximately $ 2.5-3 billion. The CDM credits it generates could cut the capital cost by 10-40%. .

Aside from the economic implications, there is also great potential for nuclear plants to undermine domestic action to reduce greenhouse gas emissions. If, for example, Canada were to secure another contract to build two 700 MW reactors in India (most of India's pressurised heavy water reactors are Canadian), it could potentially claim 9 million tonnes of carbon reduction credits per annum -- equivalent to approximately 6% of its 1998 carbon dioxide emissions.

If nuclear power is made eligible for the CDM, the Kyoto Protocol will be contributing to the threat of nuclear proliferation. All nuclear power plants produce weapons-usable plutonium. A sphere of plutonium smaller than a tennis ball can be used to make an explosive device that can kill many thousands of people. The two developing countries lobbying most aggressively for CDM credits for nuclear projects are China and India, both of which have active nuclear weapons programmes. Other likely candidates for nuclear credits under the CDM, like South Korea, have only recently halted clandestine programmes to develop a nuclear arsenal.

The threat to global security posed by nuclear proliferation is equal to that of climate change. For the Kyoto Protocol to exacerbate this threat through its mechanisms would be a truly perverse -- and dangerous -- outcome for the climate convention negotiations. Many developing countries, particularly those in the Pacific and Africa, are concerned that investment in CDM projects will mirror current investment flows and be biased towards high-growth countries like India, China and South Korea. They are rightly seeking an assurance that the CDM will be structured to ensure an equitable distribution of resources among all developing countries.

Allowing nuclear power in the CDM will undermine their efforts. It will see CDM credits sucked in by nuclear mega-projects in countries like China, India and South Korea, further reducing the resources available for sustainable projects in non-nuclear developing countries. CDM credits for nuclear power will be seen as an endorsement of the nuclear industry's argument that it has a role to play in combating climate change. It will be, in effect, the 'Kyoto stamp of approval'. This could encourage developing countries to go down the nuclear road. It could help developed countries that cling to the nuclear dream to justify further subsidies for their domestic nuclear power programmes, extend reactor operating lives, and even undertake new construction. The legitimacy it would give to the nuclear industry could also jeopardise phase-out plans -- legislated or de facto -- in a number of countries. As a Swedish delegate at COP5 said: "If Sweden were to allow nuclear in the CDM, that would make political trouble for the nuclear phase-out at home." If the CDM is to be an effective instrument for sustainable development, and advance the goal of greenhouse gas reductions, then preventing support to nuclear energy from the Climate Change Convention is essential. Otherwise, a key mechanism of the Kyoto Protocol will become just another nuclear subsidy.

The operative part of the Indo-US deal is: "India would reciprocally agree that it would be ready to assume the same responsibilities and practices and acquire the same benefits and advantages as other leading countries with advanced nuclear technology, such as the United States. These responsibilities and practices consist of identifying and separating civilian and military nuclear facilities and programmes in a phased manner and filing a declaration regarding its civilian facilities with the International Atomic Energy Agency (IAEA); taking a decision to place voluntarily its civilian nuclear facilities under IAEA safeguards; signing and adhering to an Additional Protocol with respect to civilian nuclear facilities; continuing India's unilateral moratorium on nuclear testing; working with the United States for the conclusion of a multilateral Fissile Material Cut Off Treaty; refraining from transfer of enrichment and reprocessing technologies to states that do not have them and supporting international efforts to limit their spread; and ensuring that the necessary steps have been taken to secure nuclear materials and technology through comprehensive export control legislation and through harmonisation and adherence to Missile Technology Control Regime (MTCR) and Nuclear Suppliers Group (NSG) guidelines."

This section of the agreement has generated opposition and criticism in India. The critique from both the left and the right finds fault with compromising India's security and subjecting its sovereign rights to closer international and US scrutiny. It is alleged that India has become a regional rear guard for the US in its strategic positioning against China's growing economic and military might. By offering the new nuclear deal, the United States has convinced India to give a decent burial to the ambitious Iran-Pakistan-India gas pipeline.

The national sovereignty issue seems to be an old ghost that continues to haunt mainstream Indian political parties. In reality, the Indian defence elite has been working for nearly 25 years to create a twin nuclear architecture whereby the civilian programme will be subjected to international safeguards and secrecy will be maintained for defence nuclear institutions. This doctrine was proposed by Raja Ramanna, former chairman of the Atomic Energy Commission and later minister of defence. In fact, Indian civilian nuclear sites have been under international scrutiny, though not by the IAEA but by the WANU (World Association of Nuclear Users) since the 1980s.

The Department of Atomic Energy (DAE) came out in the open about its weapons programme in May 2000. As a first step, the government and the DAE took away the authority of the Atomic Energy Regulatory Board (AERB) to oversee the safety of a large number of critical nuclear installations meant for the weapons programme at the Bhabha Atomic Research Centre (BARC). Since then, an Internal Safety Committee set up by then BARC director Dr Anil Kakodkar (present chairman of the Atomic Energy Commission) was made responsible for ensuring the safety of the public and the workers from dangers which could emanate from these facilities. This diminishes the responsibility for unbiased independent safety regulations entrusted thus far with the AERB. Neither the Bharatiya Janata Party nor the left raised any objections to that development. There was not a single follow-up story in any newspaper on this issue; not even a single letter to the editor. The present Indo-US nuclear deal is just a formalisation of the action plan conceived by India in the early-1980s and being implemented in stages since 1989.

India was the first country to realise the total ineffectuality of the Nuclear Non-Proliferation Treaty (NPT), deciding to remain outside the NPT. India kept invoking Israel as an example for not signing the NPT. Israel is one of the few countries outside the NPT that has nuclear weapons and the US has never persuaded the Israelis to sign the agreement. The examples of Iran, Iraq, Libya, the apartheid regime of South Africa, and North Korea is often cited as standing proof that signing the NPT is not a guarantee against a weaponisation programme. The Strobe Talbott-Jaswant Singh talks between June 1998 and September 2000 indeed laid the groundwork for the present deal.

It is important to bear in mind the continuity in the overall thrust of the nuclear policy despite the change of guard in both countries. October 13, 1999, was a crucial day: Atal Behari Vajpayee took office with a renewed mandate; and the United States Senate rejected the CTBT. On that day the Global Disarmament Debate died. The new Indo-US defence deal only completes the rites of passage of the dead disarmament debate.

(A S Panneerselvan is the Executive Director of Panos South Asia. He was formerly the managing editor of Sun TV and Bureau Chief for Outlook magazine. He has written extensively on nuclear issues.)

InfoChange News & Features, June 2006