Mark Hibbs on Germany’s Confusion Over Whether the China-Pakistan N-Deal Should Be Grandfathered In

In an earlier post on the China-Pakistan nuclear deal, I pointed out China’s argument that it’s reactor sale to Pakistan should be grandfathered in since it had pre-existing contracts with Pakistan before joining the NSG.

Mark Hibbs, indirectly but very clearly, pulls down this defense–and, in doing so, shows how even countries can get confused by what goes on in NSG meetings.

“China has pledged—and is expected—to abide by the NSG guidelines on the transfers of nuclear equipment, technology, and material…If China did seek to provide additional reactors to Pakistan, it would need NSG accommodation… We do not believe that the 45 member states of the NSG would agree to such an accommodation…”

During last month’s 2011 NSG plenary meeting, the NSG’s participating governments did not agree on whether China’s export to Pakistan should be permitted to be grandfathered. It wasn’t even close.

With all due consideration for Germany’s resolve to keep secret China’s statement from 2004, what gives? If China’s explanation was watertight and substantiated—and if Condi Rice was wrong—China’s assertion that the commerce with Pakistan should be grandfathered should have been compelling for all PGs at last month’s NSG annual meeting. But it wasn’t.

Students and Penny-Pinchers of the (Nuclear Wonk) World Unite: Michael Krepon’s Excellent Summer Reading List

Naturally, I’m plugging the recommendations of my pat professor (and eminent nuclear scholar), Michael Krepon–aka the ArmsControlWonk.org’s  éminence grise.

And Krepon’s list primarily consists of free and easily accessible PDF attachments.  Students and penny-pinchers of the (nuclear wonk) world unite!

Added plus:  ArmsControlWonk.org is perhaps one of the best designed blogs around.

UN Security Council to Discuss Syria’s Nuclear Activities

Slate provides an excellent update on the UN Security Council’s upcoming meeting on Syria.

The IAEA referred Syria to the UN Security Council after being frustrated in its attempts to learn more about Syria’s Dair Alzour nuclear reactor, which was destroyed by Israel in 2007.

From Slate:

Sanctions are unlikely: Iran continues to expand its nuclear activities in defiance of the council, whereas Syria’s alleged violations appeared to have occurred in the past and thus do not seem to represent a present proliferation threat.

Still, one of the three diplomats who agreed to discuss confidential information on condition of anonymity said the planned July 14 discussions are significant. He pointed to the fact that the council found the issue important enough to take it up less then a month after the June 9 IAEA referral.

Syria is already under Security Council perusal. The council on Thursday expressed united support for the U.N. peacekeeping force on the tense Syrian-Israeli border — even while remaining divided over any direct condemnation of Syria’s crackdown on peaceful demonstrators and human rights abuses.

P-5 Met in Paris on Nonproliferation; Not Much to Report

The permanent members of the UN Security Council (United States, United Kingdom, France, Russia, and China) met to discuss non-proliferation matters last week.  The meeting was held as “the first follow-up meeting of the 2010 NPT [Nuclear Nonproliferation Treaty] Review Conference with the 5 nuclear powers recognized by the NPT.”

Shockingly, the conference reaffirmed the importance of the Nuclear Nonproliferation Treaty.  Here’s the U.S. State Department’s press release on the meeting.

Interesting Post on Politics of the Future

From Mcleans.ca’s Paul Well, blogging on the NDP-charged parliamentary Canada Post filibuster, on the difficulty of smart economic policy and electoral politics:

This simple notion—the world changes, it’s not like it used to be—does not come naturally to either of the main parties in the new Parliament. Layton’s NDP and Harper’s Conservatives are preoccupied with arguing about the allocation of wealth and advantage, not its creation. They are wage-earners’ parties with competing ideas about what wage-earners want. But it’s not fat-cat bosses or ivory-tower elites that are shutting HMV and Blockbuster down. It’s new ideas and technologies. This week an Industry Canada panel released a report saying Canada is mediocre, and getting worse, at producing those ideas and technologies. The feisty new Parliament, having shown off its ability to fight yesterday’s fights, was no longer around to discuss the report. Maybe this autumn. Maybe.

China-Pakistan Deal Pushes Forward Without the NSG: Is This Something to Worry About?

No, but others disagree.

A fellow law student, Matthew F. Ferraro, at Flashpoint (A Blog of The Diplomat Magazine) discusses two recent–and in his view troubling–nuclear moves by China.  Ferraro frets over (1) China’s pending nuclear deal with Pakistan and (2) Chinese refusal to allow India to join the Nuclear Suppliers Group.  While he doesn’t offer a solution to the perceived second problem, he suggests an intriguing idea for the first:  have the NSG push for a de facto waiver by lobbying China to accept a NSG declaration welcoming the deal and emphasizing that all nuclear facilities under it will be under IAEA restrictions.

While thoughtful and original piece, Ferraro’s ‘solution’ is impractical, and–if pursued–would risk dealing a fatal blow ever getting Pakistan in the nuclear fold and needlessly alienate China.

(And did I mention that pursuing this de facto waiver would futher strain America’s relationship with Pakistan?)

There are a five points to bring-up that in my view represent critical omissions/miscues on the article:

(1)  The US-India nuclear deal was a bum deal, but we’re sticking to it.  The United States actively lobbied the NSG to grant a ‘waiver’, in return for a new, strategic relationship with India.  And for what (primary) reason?  To corner China.  What did we actually get?  (1) International criticism; (2) India getting even more nuclear deals with Russia and France; (3) and India not really pinning China down.  And how do you think the United States (tacitly) got China’s approval on this waiver?  Probably a guarantee not to hold up (oh wait it can’t) complain about a nuclear deal with Pakistan.

(2)  China’s deal with Pakistan is not illegal.  Ferraro states refers to this deal as “China’s illicit sale”, but it’s not illicit.  The NSG terms are voluntary.  This is a crucial point that undermines the basis of the entire article:  China isn’t breaking its international commitments.  Yes, the NSG  could kick out China, which would then (pretty much) destroy the very reason for the NSG to exist.  But there’s an important difference between a ‘breach’ of a voluntary agreement, and violating international law.  This may seem silly semantics, but the NSG is voluntary exactly so it’s members can show the flexibility necessary to deal with nuclear commerce issues.  In fact, with an issue as sensitive as nuclear commerce, this flexibility is needed.

(3)  Is the United States really all  that upset?  Sorry to call me a skeptic, but the U.S. knew this day was coming.  Giving India a nuclear pass meant that India would get one as well.  Furthermore, at a time when U.S.-Pakistan are both vital and troubled, I think the U.S. may actually be thankful for this deal in the long-term.  Pakistan already has nukes; the United States can’t give any nuclear carrots (for domestic and external reasons); at least China can give tools, IAEA assurances, and perhaps a road to bringing Pakistan into the nuclear fold.

The critical point:  The United States can’t bring Pakistan into the nuclear fold alone; it will need China, and to get that support, the United States will have to deal with China keep Pakistan a strategic partner.

(4)  Ferraro’s solution sounds great, but spells trouble.  This isn’t the way to go.  If India was kicking and screaming about NSG approval of the U.S.-India deal, the NSG injecting itself into a bilateral agreement without China’s approval is fool-hearty at best, stupid at worst.  First, China won’t vote for it–hence, it won’t pass.  Result:  the NSG looks completely helpless, and antagonizes China.  Critical point:  China’s timing of this deal has as much to do with helping itself, as helping the other NSG members swallow the deal.  Second, it pushes Pakistan even further away from coming into the nuclear fold–like eventually signing the Nuclear Test Ban Treaty.

The NSG focusing even more attention on this matter will (1) likely fail and (2)  alienate China and Pakistan.  At at time when having India and Pakistan sign the NPT (less likely) or Conventional Test Ban Treaty (more likely medium-term) is far more important than bellyaching Pakistan nuclear deal, the NSG pursuing a de facto waiver seems a dangerous waste of time.

(5)  Thank God China’s blocking India’s NSG bid!  Ferraro leaves this point in left field, mentioning it but not explaining why it’s bad.  I assume Ferraro believes bringing India into the NSG is a nonproliferation ‘win’.  But that seems a rather dubious proposition.  Opening the doors to India inevitably opens question about permitting Pakistan and Israel into a club.  Great, let’s dominant all NSG discussion over member instead of getting the current members on the same page on nuclear policy.   (If you couldn’t guess, I believe this is a bad idea.).

Conclusion:  The Deal Is Happening, and It’s a Good Thing–But What Comes Next?

Ferraro basically sees the ‘bad’ in the China-Pakistan deal, without looking to the hard realities of today’s nuclear diplomacy.  Now admittedly, perhaps I’m to quick to give China a pass-a position Ashley J. Tellis would no doubt agree with me on.  (Note:  Tellis gives more background on the China-Pakistan nuke deal’s differences from the U.S.-India deal and how China justifies the deal).

But, overall, I still believe the United States should quietly be pleased with China’s moves.  The real question wasn’t if this move was going to happen, but (1) how it was executed and (2) how it would be used in the future to mold Pakistan’s nuclear practices.  China’s actions are actually containing the fall-out from America’s past breach of nuclear norms.  Is China getting a benefit?  Sure.  But when it comes to the nonproliferation agenda, all goodies that America gets, China and Russia will get.  At least China using its nuclear card prudently, quietly, and in way that helps maintain international stability, helps American diplomacy, and–most importantly to those concerned with nuclear proliferation–generates to a new lever to pressure Pakistan on nonproliferation issues.

But the real question of how the U.S., China, and Russia can use this lever to push a nonproliferation agenda, within their already crowded priority agendas, is too early to answer.

Predicting and Managing Liberal Revolutions: Two Articles from Foreign Policy Offer Guidance

Foreign Policy is running an excellent series that re-examines the collapse of the Soviet Union, and it’s lingering effects in its July/August Issue.

There are two pieces that make a particularly interesting joint-read:  Leon Aron’s ‘Everything You Think You Know About the Collapse of the Soviet Union is Wrong’ and Gennady Burbulis’ ‘Meltdown’.  The first knocks down structuralist explanations of the U.S.S.R.’s collapse, instead stressing the vexing variable of legitimacy (good luck making policy out of that!).  And Burbulis sounds a good old-fashioned path-dependency theme:  arguing that Russia’s path to revolution promised Putin’s half-baked liberal order.

Aron makes the argument that external pressures and internal economic woes were not the cause of the Soviet’s Union collapse.  Instead, it was elite-driven, “hesitant” liberalization that emptied the U.S.S.R.’s legitimacy.

The implications of this arguments, to me, seem clear:  (1) revolutions are difficult to predict, especially know since we’d substitute newspaper clippings with twitter-volume; (2) while may be supported external policies of other nations, can only be triggered by internally.

This, in other words, was a Soviet Union at the height of its global power and influence, both in its own view and in the view of the rest of the world. “We tend to forget,” historian Adam Ulam would note later, “that in 1985, no government of a major state appeared to be as firmly in power, its policies as clearly set in their course, as that of the USSR.”

Certainly, there were plenty of structural reasons — economic, political, social — why the Soviet Union should have collapsed as it did, yet they fail to explain fully how it happened when it happened. How, that is, between 1985 and 1989, in the absence of sharply worsening economic, political, demographic, and other structural conditions, did the state and its economic system suddenly begin to be seen as shameful, illegitimate, and intolerable by enough men and women to become doomed?

…

LIKE VIRTUALLY ALL modern revolutions, the latest Russian one was started by a hesitant liberalization “from above” — and its rationale extended well beyond the necessity to correct the economy or make the international environment more benign. The core of Gorbachev’s enterprise was undeniably idealistic: He wanted to build a more moral Soviet Union.

For though economic betterment was their banner, there is little doubt that Gorbachev and his supporters first set out to right moral, rather than economic, wrongs. Most of what they said publicly in the early days of perestroika now seems no more than an expression of their anguish over the spiritual decline and corrosive effects of the Stalinist past. It was the beginning of a desperate search for answers to the big questions with which every great revolution starts: What is a good, dignified life? What constitutes a just social and economic order? What is a decent and legitimate state? What should such a state’s relationship with civil society be?

Now juxtapose Aron with Burbulis’ (Michele A. Berdy trans.) article chronicling the failed coup attempt that resulted in the Soviet Union’s sudden liberal, and bumpy liberal consolidation:

A gradual transformation of the Soviet Union would have been manageable; the instant collapse caused by the coup was disastrous. The coup was the political Chernobyl of the Soviet totalitarian empire. Like the meltdown of a faulty nuclear reactor, the failed putsch blew the country apart, scattering the radioactive remnants of the Soviet system throughout the country. Within a month, the communist elites at every level had new jobs in state administrations and legislatures. They filled the ministries and threw themselves into business. The very people who had fought against the sweeping political and economic reforms we desperately needed were now running the organizations, businesses, and branches of government that were supposed to carry them out.

But it wasn’t just people who were scattered by the explosion. The body of an empire may collapse and the soul of its ideology may be cast aside, but its spirit lives on. In today’s Russia it persists in the revival of the belief in Stalin as a great leader, in the manipulated nostalgia for the false stability and power of the Soviet period, in xenophobia and intolerance, in the lack of respect for civil and human rights, in rampant corruption, in the imperial manner and mindset of some of our leaders and many of our citizens.

This is the poisonous legacy of those three days in August 20 years ago. It is worth revisiting the story now, not least because the putsch’s radioactive fallout has colored Russia’s memory of the putsch itself. The coup attempt deprived us of the opportunity to evolve gradually, to gain practical experience, to root out the vestiges of imperial thinking and behavior. It spoiled the promise of a democratic Russia before it had even begun.

From two very different perspectives (academic vs. eye-witness),  Aron & Burbulis make some memorable points.  First, while advanced democracies are being hit by the debt wave (and their debt politics appear drowning in immaturity), Aron points out that structural financial issues are only one slice of the geo-political order.  China is accruing its own liberal debt, and debt it will have to pay—one way or the other, and that will have a financial impact far greater than the U.S. debt ceiling.  But Burbulis makes clear that one comes after a liberal revolution is (1) impossible to control from the outside, (2) unpredictable and subject to fast-changing currents, and (3) may fall far short of  the hopes of its supporters.

But there’s one indisputable conclusion implicit in both these articles.  Those tasked with reading the tea-leaves of the international system have one hell of job.  How do we look ahead even 2 years when we’re still arguing about the U.S.S.R.’s collapse 20 years ago.

Ratifying The 1996 Comprehensive Nuclear Test Ban Treaty: Arms Control Association Vs. The National Review

The 1996 Comprehensive Nuclear Test Ban Treaty is back in the news, with some hoping the Obama administration—preferably before possibly losing re-election and thus losing a good arms-control partner—will push the Senate to ratify the treaty.

But after reading two opposing points of view (check out the dueling ACA and TNR editorials), it seems this debate really comes down to two disagreements:

(1) both sides just are operating under very different assumptions and factual assessments,

Or (2) this all comes down to one question:  whether it’s a good deal to trust other nations won’t test in return for the United States not testing.

Yes, the National Review makes arguments about not detecting nuclear tests, and the need to keep our arsenal up-to-date.  But as Daryl G. Kimball at ACA points out, the U.S. has the technology now to detect the test we would likely be looking for; and indirectly argues that the non-proliferation regime would be strengthened (read:  we could push India and Pakistan into the agreement, and sop future nuclear aspirants); and, finally, our nuclear stock-pile is good for decades without testing.

And while The National Review does not refute these arguments, and their underlying analysis, it seems there’s a more implicit thesis:  (1) this treaty won’t factor into other nation’s decisions to test or not; and (2) what happens in 20 years?  If everyone knows the U.S. will break the treaty the minute is become necessary, how much binding force will it have?  (Admittedly, all treaties suffer from this; but at least encourage patterns of behavior and predictability that allow nations to adjust their strategic plans).

That’s why I like Jake Wilson’s blog at Heritage that concludes:

Nuclear weapons testing is essential for keeping the U.S. stockpile safe, secure, and reliable in the years ahead. Ratifying the CTBT would be detrimental to U.S. national security interests, as 30 countries around the world rely on the credibility of U.S. extended deterrence. These countries would be incentivized to develop their own nuclear weapons capabilities if the United States were perceived as weak and its nuclear weapons unreliable.

This is what the debate comes down to:  a simple disagreement into the motivations of countries.  I personally find this analysis shallow.  The greatest motivator to countries to acquire weapons is, I believe, fear that they will be held hostage to a country’s technological wizardry (e.g. North Korea and Iran had no reason to forego getting a nuke after being labeled part of the ‘axis of evil’.).  And, in any case, is not the world reaching a point where shifting flows in global finance and diminishing technology costs will make nuclear weapons available to any nation determined to get them?

If I’m right (and that is a big ‘if’), it then seems the proper course of U.S. action is to show nations nuclear weapons won’t achieve their strategic aims.  Best way to do that: show the world you don’t need further testing to meet your strategic aims.

But my worldview is more concerned with preventing low-budget, small nuclear aspirants—aka more Irans, Indias, and Pakistans—from causing regional headaches, not worries over Russia or China suddenly out-nuking us in some absurdist ‘Strangelove’ scenario.

But, in any case, both the ACA and TNR editorials duck this fundamental disagreement.  Instead, they recite or debunk old talking points.  It’s not that, especially the ACA analysis isn’t well-mapped and thorough, but instead missing what may actually be swaying the vote of particular Senators.

Is Nuclear Energy Cost-Effective?

Is the real problem with nuclear energy not its low-probability/high cost disasters (read Japan’s $245 billion nuclear catastrophe), but its cost-effectiveness?

John Farrell, at Renewable Energy World, makes that argument.  He argues that nuclear is actually third most expensive source of energy, and makes the case for investing in renewable energy.  He has nice graphs, but most of the analysis rests on one 2009 study from the Institute for Energy and the Environment at Vermont Law School.

On the other hand, the World Nuclear Association, looking at US electricity costs, argues that nuclear is cheaper than coal, gas and oil energy.

And then there’s still recent study from PriceWaterhouseCoopers that found Sweden’s hydro and nuclear energy production far more cost-effective than looking to wind energy.

But in any case, forecasting future costs of energy might be beside the point:  the real is, what happens when nuclear energy is cut out?

First, here’s a graph that shows the significant role nuclear, coal and natural gas play in America’s energy portfolio. (Naturally, driving eats up most of America’s petroleum consumption.)

And then Germany’s nuclear phase-out will lead Germany to rely more on gas and oil, increasing CO2 emissions.  But, owing to Europe’s carbon trading scheme, this could in turn spur Europe to turn to cleaner sources of energy.  Whether the increased push for renewable will lead, long-term, to a cleaner future faster than with nuclear in the mix is still unclear.

But, finally, one caveat should be noted:  the Gulf Oil Spill cost approx. $40 billion–or 1/5 the cost of Japan’s nuclear disaster.  Now, in 2007, the United States spent $1.233 trillion on energy.

The numbers are there; and policy-makers will have to decide whether the cost of not using nuclear energy outweighs the danger of a low-probability/high-cost nuclear accident.  But, at least in the United States where there is no cap and trade system, nuclear energy will seem to beat out renewable energy sources in the near-term when it comes to quickly generating energy and lowering America’s carbon imprint.

Nuclear Power, Politics and Law: The Bumpy Road to Phasing Out Germany’s Nuclear Industry

Will constitutional law stop Germany from heading towards a nuke-free future?

No, but it may put a steep price-tag on it.

Last month, reacting to Japan’s March 2011 nuclear catastrophe and a shocking electoral shellacking in Baden-Wuerttemberg, Chancellor Angela Merkel announced plans to phase out nuclear energy as soon as possible.

The result?  Even worse political fortunes, and—now—the risk of paying billions in damages to Germany’s nuclear industry.

E.On, the world’s largest investor held energy service provider, announced last Friday that it would challenge the bundle of nuclear energy proposals recently made law in Germany.

And yesterday, E.On released a legal memo crafted by Gleiss Lutz detailing their claims against the government.  Specifically, the memo argues that E-on should be compensated for the German government’s illegal expropriation of their property.  Deutshe-Welle explains the reasoning of the possible suit:

The reasoning behind the claim focuses on the amount of electricity from nuclear power that energy companies would be allowed to generate before they are shut down.

Lawyers for the companies reportedly argue that these remaining kilowatt hours – to be produced in the future – are the property of the energy companies and are therefore protected as proprietary rights of ownership by the German constitution.

The amount of money at stake?  According to Eon’s Friday press release, “billions of Euros.”

Whatever the merits, this case shows the  difficulties countries may have in rapidly phasing out nuclear energy.  Furthermore, it suggests Merkel’s awkward political 180 will stay in the news for weeks to come.

This commentator has no knowledge of German property law; but, if EU law, is any guide–this property suit may have some trouble.  (The German constitution’s  Art. 14 has similar language).   Art. 17 of the EU Charter specifically states:

No one may be deprived of his or her possessions, except in the public interest and in the cases and under the conditions provided for by law, subject to fair compensation being paid in good time for their loss.

Now the “fair compensation” may seem like an easy hook.  But one case made clear that one isn’t deprived of their possessions by simply restricting their uses (for example, telling a person who bought a wineyard that they haven’t been “deprived” after EU law banned such a use, because they could always use it to sit on and enjoy–at a steep economic cost).

Now here, if the property being dealt with is unused kilowatt hours, deprivation may be more easily proven.  But, then again, the “public interest” prong is likely much more compelling.

And there’s always the business-risk argument:  When a private industry takes the chance–as did small coal producers before the advent of the ECSC–it knows there’s an always present risk that regulatory guidelines may come down that drive them out of business.  It seems here, while E-On could argue they can met every reasonable safety precaution and could not foresee such a quick change in Germany’s energy policy.  But the Greens have discussed knocking out nuclear energy, and there’s always the inherent risk of nuclear technology to argue the industry should have always known a regulatory ban could come at any time.

And while there are due process concerns, the phase out is not immediate: rather it lays down a 10-year plan (the really meeting the severe due process concerns at play in the Kadi case where a person placed on a UN sanctions list could not receive any of his funds to play for basic living expenses while he was challenging this designation.).

Hence, if German case-law has a similar trajectory to EU law the case could be in trouble.

In any case, it’s a fun case to map out, and a case with huge consequences for the German government and E.On.

If anyone can find the actual the Gleiss Lutz legal opinion, released yesterday, detailing  Eon’s legal claims (in English), I’d be very appreciative.