Tuesday, March 20, 2012

The USD 99 million versus USD 3 billion nuclear question

So it has come to pass...the Tamil Nadu government has cleared the nuclear power plant project in Kundankulam. The Chief Minister of Tamil Nadu, Jayalalitha, who had until now demanded the central government and the Indian Atomic Energy Commission to provide satisfactory explanation about safety measures, has reportedly decided, after perusing materials submitted to it, that the plant is safe. She has reportedly also dismissed any risk of an earthquake or tsunami hitting the region. Of course, since protestors who allege that there is no disaster management plan as required legally for those living within a 30 mile radious, the government decision is not entirely persuasive. 

So, in an effort to persuade local villagers, the Tamil Nadu government is reportedly offering nearly USD 99 million (INR 500 crores) worth of infrastructure building, including provision of cold storage to local fisherfolks for storing fish, construction of houses, building roads, and repairing their boats. In return for this bargain, the construction of the USD 3 billion (INR 1300 crores) nuclear power project will proceed. The government apparently has also imposed a Section 144 restriction on protestors. Section 144 of the Indian Penal Code (IPC) punishes anyone from joining an unlawful assembly with a deadly weapon with two years imprisonment or fine. Peaceful protests, however, are reportedly continuing and several, including scientists and villagers, have gathered inside the plant in protest. Their demand? To repeat: that the government and India's Atomic Energy Commission provide a disaster management plan for at least those living with a 30 mile radius of the plant site. A full newsreport is available here.

Since I have not had an opportunity to thoroughly examine the government documents or interact with those in opposition, including petitioners, I will refrain from giving my two cents worth on the legality of the issue. But, I will admit that I was especially intrigued to read at the same time reports on Kudankulam and a special report on nuclear energy published by the The Economist in its March 10th issue. (I would highly recommend the report, The Dream that Failed).

Unlike the Indian government, the authors of the The Economist report have actually cooled to the idea of nuclear energy; a source of energy that they admittedly once termed as a source that was "as safe as chocolate factory." (This was pre-Johnny Depp). What is especially striking is their observations on the regulatory implications, notably:

1. That a nuclear energy plant is simply not feasible without government support, backing, subsidy, or initiative, because of the high risk and associated costs.

2. In relation to the above point, the report notes that costs are usually managed in the form of subsidies and limited liability.

3. That with so much at stake, the accountability and transperancy generally suffer. They point to Japan, a developed nation, as an example of dismal failures on that front.

After reading both the reports together, I am left with one thought--how do we begin to assess what is in a nation's self-interest in a time of energy reforms? Regulators are putting a lot in stake in the hope of promoting development and competition. Nuclear energy is involves serious high stakes risk. The chances may be that an accident occurs once every two decades. But, the devastation is often irreversible. Should we then regulate nuclear energy as any other form of energy? I am still thinking... 





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