Sunday, July 12, 2009
The American Clean Energy Act, Global Warming and the Position of China and India
There are several provisions of the bill -- some are bold and others modest, some progressive and others status quoist. With respect to Global Warming and Carbon emission reduction, the Act mandates, "Starting in 2012, ACES establishes annual tonnage limits on emissions of carbon and other global warming pollutants from large U.S. sources like electric utilities and oil refiners. Under these limits, carbon pollution from large sources must be reduced by 17% below 2005 levels by 2020 and 83% below 2005 levels by 2050. To achieve these limits, ACES establishes a system of tradable permits called “emission allowances” modeled after the successful Clean Air Act program to prevent acid rain. This market-based approach provides economic incentives for industry to reduce carbon emissions at the lowest cost to the economy."
So, per ACES Act, the United States is using 2005 as the benchmark, and hoping to reduce the carbon emissions by about 17 percent in 2020.
Saturday, July 19, 2008
Three important policy elements of the India-US Nuclear and 123 agreements
As India debates and will vote for the India-US Nuclear agreement through its members of parliament (it is a proxy vote in that the members of parliament will be voting whether the parliament trusts the current government or not), and as individual members of parliament are being tugged in different directions including their own conscience, there are three policy questions they should consider.
Based on their assessment on these three policy elements, the members of parliament should cast their votes.
(1) Will the safeguards agreement between India and the International Atomic Energy Agency (IAEA), and the exemption obtained from the Nuclear Suppliers' Group assure India uninterrupted supply of nuclear fuel and technology in perpetuity if India abides by the IAEA agreement even if the United States exercises the Hyde Amendment prerogative? (The Hyde Act in the India-US Nuclear agreement prohibits the U.S. administration from directly or indirectly assisting India with lifetime fuel supplies after suspension of the deal).
Simply put, is there separability between the agreement with IAEA and the Nuclear Suppliers' Group (bilateral 123 agreement), and the India-US Nuclear agreement?
The Indian government including Prime Minister ManMohan Singh and Congress party president Mrs. Sonia Gandhi appears to think that the answer to this question is "Yes". Several others -- policy leaders and scientists including P. K. Iyengar (former chairman, Atomic Energy Commission), A. Gopalakrishnan (former Atomic Energy Regulatory Board chief) and A.N. Prasad (former Bhabha Atomic Research Centre Director) assert that the answer is "No". (The three scientists, "Therefore, the government owes a clarification to the Parliament and the public about how they intend to avoid the consequential huge economic loss from the non-operation of these extremely costly imported reactors, as a result of fuel denial.”)
(2) Will the Nuclear agreement with the IAEA and the Nuclear Suppliers' Group (NSG), and/or the agreement with the United States weaken, in any manner, India’s nuclear deterrent and an ability to protect & promote indigenous R&D efforts in nuclear technology?
Simply put, will India's national security and/or sovereignty be compromised? The government says, "No". Others assert that the agreements would compromise the security interests at least some.
(3) Will the Nuclear agreement with the IAEA and the Nuclear Suppliers' Group (NSG), and/or the agreement with the United States have negative collateral effects on other areas of national interest such agriculture, defense and space?
Simply put, will India's national interests be protected? The government says, "Yes". Other including Placid Rodriguez assert that India's national interests may be compromised. (Rodgriguez, "My greatest reservation (about the deal) is that the strategic alliance between India and the US is going into agriculture because in the other three sectors (defence, space and nuclear) we are strong and we can go independently and we will go.)
Friday, July 18, 2008
The proposed agreement between India and International Atomic Energy Agency: Is it a prudent compromise or an unworkable compromise?
The draft text of the safeguards agreement between India's Department of Atomic Energy and International Atomic Energy Agency (IAEA) secretariat appears to be splitting the differences. That's good news. Sometime splitting the differences is prudent compromise, and at other times it kills the baby.
One of the key phrases in the agreement is “corrective measures”. Put simply, the agreement stipulates New Delhi’s right to act in the event of a breakdown of the agreement for international cooperation.
There are two sets of issues/concerns being raised about this phrase. First concern is about the palce ment of this phrase -- the reference to “corrective measures” appears only in the preambular section of the agreement, not in the body of the text. This should not be a major issue.
The second concern is about the meaning of “corrective measures”, which would become operational if the permanent safeguards and assured supplies breaks down. On permanent safeguards India offers the assurance “against withdrawal of safeguarded material from civilian use at any time”. At the same time, India wants to make sure that, after accepting safeguards, it should not be left high and dry on fuel supplies. Hence the compromise language in the IAEA draft affirms about “creating the necessary conditions for India to obtain access to the international fuel market, including reliable, uninterrupted and continuous access to fuel supplies from companies in several nations, as well as support for an Indian effort to develop a strategic reserve of nuclear fuel to guard against any disruption of supply over the lifetime of India’s reactors”.
This -- the focus on diversifying suppliers and the creation of a strategic reserve -- appears to ensure a lifetime supply covers many of the contingencies.
However, the stipulation is so vague and compromised that it has left all the constituents dissatisfied and anxious.
No one understands or knows for certain what this provision means, and/or when it would become operational. Being vague about the details of the provision has suited both the Government of India and IAEA but not the well-meaning interpreters of the agreement within and without the country.
The Indian citizens are worried that India may be caught in a nuclear bind (of interrupted supplied), and the Non-proliferation critics in the U.S. and other parts of the globe are worried that India may exploit the provision for furtherance of its nuclear goals. So there you have it -- splitting the differences may prove to be suboptimal.
The draft text as provided by The Times of India can be accessed at the following link --
Indian policy leaders and citizens have to carefully consider the geopolitics in assessing the India-US Nuclear agreement
As India debates the merits of the India-US Nuclear agreement (123 agreement), public policy leaders and citizens one must consider three the current and potential geopolitics in determining the acceptability of the India-US Nuclear agreement. There are at least three different elements to be considered --
(1) The Larry Pressler Amendment which was in effect in the U.S. with regard to the export/sale of military technology to Pakistan mandated that the President of the United States had to certify to the U.S. Congress that Pakistan was not misusing the military technology. In 1990 the unthinkable happened. Pakistan had paid billion of dollars for the purchase of more than F-16 fighter aircrafts. But the then President George H.W. Bush refused to provide the certification, and Pakistan was denied the F-16 fighter aircrafts though it had paid for them. Pakistan had got those aircrafts in 2005-2006 when President Bush decided to grant India exemption from the sale of nuclear technology and fuel.
(2) We should remember that first nuclear power station -- Tarapur Atomic Power Station -- built in India ran into serious difficulties in the 1960s. The nuclear power station was built with the help of the US and Europe, and with the assurance of continuous nuclear fuel supply. However, because of many domestic and global pressures including the pressure of the Non-proliferation advocates, the United States and France pulled out of the agreement abruptly. India was stranded but thanks to the leadership of the Indian scientists and the political leadership including Mrs. Indira Gandhi, India developed the nuclear and space technology indigenously.
Congratulations to India that in spite of the attempts to impute a variety of motives to India, India never pulled the Tarapur Atomic Power Station out of the IAEA safeguards.
(3) Assuming that the Nuclear agreement is consummated, what will India do if any party -- be it India or the U.S. (because of Hyde Amendment) -- reneges from the agreement in the future? Where will India go for the nuclear fuel and technology? Imagine the scenario twenty-years from now. Assume India has 30 nuclear power plants in different parts of the country and abruptly India loses supply of most of the fuel. That would be disastrous.
The world certainly has changed the 1960s and even from 1990 but it is also likely to change again in 20 years. India should, therefore, consider the geopolitics of the nuclear agreement. dispassionately.
Monday, July 7, 2008
President Bush's decision to attend the Olympic games in China
President Bush has announced that he will attend the opening ceremonies of the Olympic games in Beijing, China next month. Simply put, the President did not want to insult China. Historically and culturally, Chinese citizens are nationalistic and take affront rather easily (and hold these grudges for a long time) to any perceived insult to their country, culture and society.
So what is the point in leaving the Chinese political leadership all upset with the United States? After all, the next President -- whoever it is -- will have to face the consequences of that. President Bush has made the right decision in not complicating the governance for the next President -- after all, President Bush is in the last 6 months of his presidency.
The responsibility and restraint shown by President Bush is to be lauded though it can be argued that China should not be rewarded for its strong arm tactics with Tibetan people and other human rights issues. May be President Bush would have not attended the opening ceremonies if he had at least one full year -- if not more -- to deal with the fall-out of such a decision instead of leaving that to the next President.
After all, President Bush has has been clear in always identifying China as a "competitor." President Bush has also been respectful of Dalai Lama and the Tibetan aspirations. So instinctively President Bush would have wanted to keep away from the Olympic games but he made the right strategic decision.
Sunday, July 6, 2008
What is the thinking on Iran-India Gas Pipeline?
Assuming that the India-Pakistan political and economic relations are honky-dory, Afghanistan is a mine-field. The political uncertainty and instability in Afghanistan for the last 30 years is evident. So how will the safety of the pipeline be assured? What is the guarantee that the pipeline will not become hostage to political and even religious angst and anger?
Of course, the relations between Pakistan and India is far from reliable. Even as late as in years 1999-2000, India and Pakistan were poised to go to war. Of course, there are constant disagreements over small and big issues -- terrorism, cross-border military incursions, perceptions of slight.
Most difficult of all these challenges is the Kashmir valley. The Kashmir valley issue has no solution at all. Pakistan political leaders are unlikely to ever give up the claim that Kashmir valley should be transferred to Pakistan -- in fact, no Pakistan political leader can afford to do this politically. Of course, India will never let anyone impinge or question its sovereignty -- Kashmir is an integral part of India. If Kashmir valley was not such a narrow and small geographic area, and if there were some natural geographic divides, may be there could have been some give-and-take on the land. But that is not the case.
What if the Iran-Pakistan-India pipeline becomes a reality, and India starts using the enormous amount of natural gas for consumer and industrial purposes, and five years down the road, some political leader in Pakistan or some terrorist in Afghanistan decides to hold the pipeline hostage? India's economy will suffer devastating consequences.
What if Iran decides to raise the price of the natural gas? By supplying such large volumes of natural gas, and with the economic necessity of using the pipeline, Iran will have a near-monopolistic power. Even as the project is on the drawing board, Iran has already demonstrated its unreliability. So what can be of the future?
The pipeline project reached a setback on July 16, 2006 when Iran demanded a price of $7.20 per million British thermal unit ($6.80/GJ) of gas against India's offer of $4.20 per million British thermal unit ($4.00/GJ). The Indian spokesperson then stated that the price demanded by by Iran was more than 50 percent above the prevailing market price in India. India and Pakistan finally agreed in February 2007 to pay Iran $4.93 per million British thermal units ($4.67/GJ) but some details relating to price adjustment remained open to further negotiation.
Finally, the political instability and volatility in Iran is too obvious.
Given all these risks, it is not at all clear why India is investing so much time and effort in exploring this alluring but illusional opportunity.
Added to all these complications are two other elements. First, the United States is stoutly against this project as the U.S. is against any relations with Iran. That political reality may soften but it is not likely to change completely. Both Pakistan and India want the good will of the United States for different reasons -- for security reasons for Pakistan and for aspirational reasons for India. Second, China now wants to be part of this project adding to another level of complexity.
So why this project? It just does not add up.
Background: The project was mooted in 1990 with expectations that it will benefit both India and Pakistan, who do not have sufficient natural gas to meet their rapidly increasing domestic demand for energy. The IPI pipeline is a proposed 2,775-km-long pipeline to deliver natural gas from Iran to Pakistan and India. According to the project proposal, the pipeline will begin from Asalouyeh and stretch over 1,100 km through Iran. In Pakistan, it will pass through Balochistan and Sindh but officials now say the route may be changed if China agrees to the project. The gas will be supplied from the South Pars field. The initial capacity of the pipeline will be 22 billion cubic meter of natural gas per annum, which is expected to be later raised to 55 billion cubic metre. It is expected to cost $7.5 billion.
Tuesday, June 24, 2008
Off-shore drilling: The case by and for McCain
With the high gas prices and improved technologies, voters are open to this idea -- all public polls show that 55-60 percent of Americans support off-shore drilling. It is estimated that there may be about 21 billion barrels of proven oil reserves that are left untouched because of a federal moratorium on offshore exploration and production.
So that should help McCain, right? Not much for two reasons. One, the voters will always be reminded that McCain might be opportunistic and runs counter to McCain's tough-it-out but do the right thing image. Two, the blue-collar, working class, lower income voters who are most affected by high gas prices are also surprisingly principled and tough (they would rather tough it), so McCain may gain no traction with this most plausible demographic group.
The principled-stubbornness of the working class demographic group came to most vivid demonstration when
Finally, even if the federal ban on the off-shore drilling was removed it would be a long time before there can be any potential oil production because the individual states such as California and Florida have to make their own determination and then the business of drilling oil has to begin.
Saturday, June 21, 2008
India-US Nuclear Agreement -- An Update
First, the substance of the pact. The benefits -- immediate access to nuclear technology and nuclear fuel -- are very robust. India's need for energy is monumental and nuclear energy must form a part of the energy portfolio for India.
The United States -- President Bush -- has made an extra-ordinary offer to India. The President is championing exception (for India) to the 1978 congressional mandate that the non-signatories of Nuclear Non-Proliferation Act cannot under any circumstances receive any nuclear technology or fuel from the United States. The so-called Nuclear Suppliers Group follow the United States lead on this matter.
So this is truly historic. India owes a debt of gratitude to President Bush and the United States. However, the Hyde Amendment is troublesome.
The Hyde Amendment which requires the President to advise the Congress every year that
Having said this, if India is ready to accept the risk with the Hyde Amendment the Indian Government must have moved with greater dispatch. It was India's responsibility to sign India-specific accords with the International Atomic Energy Agency (IAEA) before the U.S. Congress can approve the nuclear agreement.
But India has dithered on this matter for almost one year. That is because of the Communists parties who have about 60 parliamentary seats and who have been electoral partners with Congress party are strongly opposed the nuclear agreement -- their opposition is well thought-out, and it is mostly based on the Hyde Amendment.
The Congress party has spent one year trying to persuade the Communists parties -- and it has not been successful. Finally, the Congress party is threatening to go ahead with the negotiations with IAEA but why now? This is so late.
By the time, India concludes its negotiations with IAEA it will be atleast a couple of months. So the agreement cannot placed before the U.S. Congress before fall. But the agenda for fall for the Congress is set in place -- and the Congressional leaders have already said that it is too late for debate and approval of the nuclear agreement.Unfortunately, President Bush can do only so much -- particularly with the U.S. Presidential and congressional elections looming ahead so close. Once the November elections take place (Democratic party is likely to gain substantial number of seats in the U.S. Senate and the House of Representatives, and quite likely even the White House), President Bush's influence will diminish dramatically.
So what is point of Congress party being so decisive so late? It appears that the Congress party did not want to risk alienating the Communist parties but now since the national elections are only 6-9 months away the Congress party appears ready to roll the dice. Politically, that is not in the self-interest of the Congress party. Unless the Congress party can hold the Communist parties in its fold for the next general elections, its probability of winning those elections will diminish dramatically.
So what is the point? It just does not compute. The nuclear agreement is most unlikely to be approved by the U.S. Congress given the serious time constraints and the dynamics of U.S. political environment. The Congress party is also likely to lower its odds of winning the next elections.
Thursday, May 22, 2008
The travails of Pakistan
Pakistan military -- unlike in India -- has been too willing to seek political power. Three military rulers -- Ayub Khan in the 1960s, Zia-ul-Huq in 1980s and now Musharraf -- each with substantial longevity have dominated Pakistan's political leadership. The challenge with military autocracy as with any dictatorship is that there is no accountability and the desire to hold on to power warps even the most sane human mind. In a democracy, elections are as inevitable as the seasons and the political leadership is naturally held accountable and prevented from amassing power.
Look at Musharraf. First, in trying to hold and then in trying to consolidate his political power, Musharraf decided to align himself with the U.S. in the fight against terrorism. Instantly, Musharraf gained a certain respectability and credibility, and access to resources because of the patronage from the U.S. However, Musharraf squandered this opportunity though hubris and a greed for power.
Musharraf amended the constitution to suit his whims and fancies, refused to let political parties and leaders operate in Pakistan, intimated the press, and finally threatened the judiciary and removed the inconvenient judges. Musharaff disguised all this for a long time as necessary actions to fight fundamentalism and terrorism. But this excuse soon wore out.
Musharraf, finally and reluctantly, allowed parliamentary elections and participation by political parties. And then tragedy stuck in the assassination of Benazir Bhutto. Bhutto's compromised and corrupt husband, Asif Ali Zardari, was then elected as co-chair of Pakistan People's Party.
In an effort to divide the political opposition, Musharraf adopted the old Machiavellian approach by dismissing all the criminal and civil complaints against Zardari prior to the recent parliamentary elections. But Musharaff prevented Nawaz Sharif, the former Prime Minister, from contesting the parliamentary elections. While Zardari's Pakistan People's party won enough parliamentary seats for a simple majority, Sharif's Pakistan Muslim League also won substantial number of seats.
After much hard-pressed negotiations, Zardari and Sharif agreed to form the government together. But within months, the coalition has come apart. What a tragedy for Pakistan! What a gift to Musharraf!!
The agreement has come apart on a simple but enlightening issue. Sharif, rightly, wanted the Supreme Court justices who were removed by Musharraf for his own political expediency be restored to their positions through parliamentary action. That was the right constitutional, moral and political decision. But Zardari, after initially agreeing to this, blocked the rightful action because Zardari himself could not afford an independent judiciary given his precarious situation.
Of course, Musharaff is smiling. But people of Pakistan have much to be disappointed.
Myanamar: There has to be immediate change in governace
What makes human beings give -- emotionally and monetarily? Scientists tell us that we are hard-wired to help others, to drop everything in crisis situations. It has to be a crisis but it also has to a new and a sharp situation.
Note that even crises can lose their newness and sharpness after sometime, and perceptually and emotionally become a routine irritant. That is the case with Darfur. Is the situation in Darfur a crisis? Yes but we are tired of it and so the urge to give has died. That's why it is important to deal with the crisis immediately, otherwise everyone becomes worn out and distraction sets in.
The military junta in Burma has accepted the terrible conditions of its citizenry as a matter of fact and necessity to maintain control and power. That partly explains the junta's horrendous response to the tragedy and shockingly tawdry relief efforts. On the other hand, the Chinese political leadership (while not a paragon of tolerance or democracy) is aspirational -- it is intent on growing China and improving the lot of its citizens. So the Chinese political leadership has not become jaded as the military junta in Burma has.
It is time for the world -- including China and India -- to demand changes in the governance of Myanmar. The current junta has lost its conscience, and with the loss that conscience the ability to be shocked and roused.
Wednesday, May 21, 2008
The state of the US: America is rising or declining?
The size of the Unites States economy is about $13 trillion. Assuming the average annual growth of 2.5 percent (this has been the average since World War II), the
In this face of these empirics, it is impossible to argue that either
However, what might change the equation is one of two very discrete and dramatic events. First possibility is a collapse of the
The second possibility is a new innovation or a set of innovations that dramatically alters the way of life. Think of steam engine, or Bessemer process for mass production of steel, or world wide web (WWW) technology. But, here, too the
The general argument that the
May be I am missing a new breakthrough -- a new steam engine -- but short of that the U.S. is likely to dominate the world of economy, commerce, and innovations for the next 50 years.
Monday, May 19, 2008
Confident China and Paranoid Myanmar
Myanmar was struck with a devastating cyclone --Nargis -- which has killed tens of thousands of men, women and children. Death in Myanmar has come not only from the cyclone but from lack of sustained relief efforts -- so there have been deaths due to starvation and disease. The current death toll is at nearly 78,000, though expected to surpass 100,000. Upto 2.5 million people are considered severely affected.
In China, more than 34,000 are reported dead and 4.8 million have been left homeless from the recent earthquake and its aftershocks.
The two different responses from the Myanmar military junta on Myanmar and the China's political leadership reflect on the strength of the two societies. In Myanmar, the military junta refused to give information about the scope of the disaster and the necessary relief efforts. The junta has refused to let reporters visit the disaster area. No external aid was sought, and even when offered was turned down -- aid from the U.S. and even the U.N. was turned down. Even threats from the outside did little to nudge the military junta. And finally, when the relief supplies were distributed the junta converted the exercise into a propaganda effort by placing the names of the generals prominently on the relief goods.
There was no thoughtful remembrance of the dead -- only when China announced a national mourning did Myanmar follow suit.
Myanmar's crass, class-less and paranoid response is born out of the anxiety and weakness of its military rulers. It is a tragedy that the world has not pushed the military rulers hard. The U.S. and other societies do not want to use their political and diplomatic capital on Myanmar because Myanmar is not in their strategic interest.
On the other hand, China was most open and responsive. Within 14 minutes of the tragedy, Chinese officials rushed relief efforts to the disaster area. The authorities also made all the information and data available to the citizens, reporters, aid-workers, and others. China warned the disaster-area citizens of possible aftershocks and their possible fall-outs. While China is a resource-strong society, it did not turn down aid.
China paused the Olympic torch relay, and paid national homage to the dead. China's President, Hu Jintao, and Prime Minister, Wen Jiabo, have made public visits to the disaster-stricken area.
China's thoughtful and dignified response speaks volumes of its strength and confidence. China now should rightfully edge the paranoid Myanmar regime into more political accountability -- but for China's patronization of Myanmar, it would be difficult for the military junta in Myanmar to defy the basic human decency and plod on.
