Varun Sivaram

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Russia’s Nuclear Diplomacy: How Washington Should Respond

by Guest blogger for Varun Sivaram
April 7, 2017

Russian President Vladimir Putin meets with Hungarian Prime Minister Viktor Orban in Budapest, Hungary, on February 2, 2017 (Reuters/Alexei Druzhinin) Russian President Vladimir Putin meets with Hungarian Prime Minister Viktor Orban in Budapest, Hungary, on February 2, 2017 (Reuters/Alexei Druzhinin)

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This is a guest post by Sagatom Saha, the research Associate for energy and U.S. foreign policy at the Council on Foreign Relations. Follow him on Twitter at @SagatomSaha.

Last week, Westinghouse Electric Company, the firm that once marked America’s dominance in nuclear power, filed for bankruptcy.  Over the decades, the United States has since been reduced to a minor player in the global nuclear market it created. And although some of the world’s largest developed economies like Germany and Japan have taken a step back from nuclear power, in rapidly emerging economies keen on securing clean, reliable, and affordable power, nuclear is poised for growth. In Foreign Affairs, I explain how Russia is benefiting geopolitically in America’s absence.

Although emerging economies may want to deploy nuclear power to meet a variety of goals from meeting their climate targets under the Paris Agreement to powering their growing economies, Russia has been aggressively exporting nuclear technologies as a matter of foreign policy. Putin himself has travelled internationally to sign deals to construct nuclear reactors on nearly every continent. As a result, Russia already dominates the global market, and it is poised to increase its market share. Moscow already uses its favorable market position to exact political gains like support within the European Union from Hungary. If this trend continues, Russia could find itself with more allies in the decades to come, and the United States fewer.

In the essay, I write:

Russia stands to benefit most from the developing world’s increasing appetite for nuclear power. Rosatom currently has export orders valued at more than $300 billion—60 percent of the overall market—for 34 plants in 13 countries. Russia’s share of the global nuclear export market will increase as long as the Kremlin considers it a matter of state policy. Putin’s visit to Hungary was only one stop in an international tour to sign nuclear power deals that resulted in broad agreements on nuclear power with 13 nations on nearly every continent.

Rosatom’s dominance is explained, in part, by its business model. The firm operates on a Build, Own, and Operate scheme–that is, Rosatom constructs the reactor, retains ownership of it, and offers the full range of services from initial financing to fuel disposal. And, in part, because of generous state funding, Rosatom is able to offer cheap financing and sell reactors at far lower costs than its international competitors. In 2010, for example, the development and construction cost of a nuclear plant in Russia was 20 to 50 percent less than Western equivalents. At the same time, Russia is racing ahead with plans to deploy the world’s first two Generation IV reactors domestically by 2025. In the absence of serious rival suppliers, the combination of favorable financing and advanced technology will sustain Russia’s competitive edge for decades to come.

Unfortunately, even as it increases its nuclear exports, Russia would do little to address the emerging security challenges that would accompany the spread of fissile materials. To avoid a more dangerous future in which the United States loses economic and diplomatic leverage, I urge the United States to compete with Russia by revitalizing its civil nuclear industry with sensible, bipartisan policies including cutting regulation, lowering borrowing costs, and investing in science and innovation.

Post a Comment 2 Comments

  • Posted by George Chakko

    Sorry,

    The author does not understand nuclear military science.

    Second, he does not understand the dynamics of nuclear industry. Are we in cold war times again? tt’s time to ask a fundamental question. Who wants to destroy whom for what
    Here few facts:
    1) Russia promoted pebble-water reactors in S. Africa that were supposedly bomb-proliferation -free. What happened after that?
    2) Russia has not promoted horizontal nuclear proliferation. But the U.S promoted it.
    The reality now is:
    The U.S. cannot match Russia’s TOPOL – M nuclear headed zig-zag rockets /missiles, either in Europe or in and around employed ie Russian sub-nucs in 300 km around the U.S. West & East Coast that can destroy America. That is the reason Trump was elected to make peace with Russia.

    George Chakko. Vienna, Austria
    Vienna, 08/ 04/ 2017 0:252 hrs CET

  • Posted by George Chakko

    Welcome to Mr. Sagotom Saha’s views.

    In a way it confirms what I said in response pointing to missed facts by the author. Couple of facts amiss still: a) Why is Russian nuclear technology welcome? Russian offered long ago at least, a decade back proliferation-free reactors. Of course, no reactor is absolutely proliferation free ! The U.S. unfortunately dwelt on the immediate post WWII theory that any nuclear reactor delivered is a nuclear weapon by itself. The fundamental reason behind, very little known today, is simply, the U.S. distrust and incapability to produce and transfer a proliferation –free reactor, although the U.S. developed the beryllium-based reactor. To explain this may I quote my article as a U. N. correspondent at the IAEA’s 40th Anniversary in 1997 in Vienna (published by The Hindu in Nov , 1997, exact date pl. check).

    “A historic battle, now almost forgotten, before the IAEA statute could be adopted on October 19, 1956 in New York, took place between India and the U.S. on Article XII of the statute on safeguards. It was key to India’s nuclear independence. Dr. Bhabha argued then against neo-colonist nuclear have’s that safeguards ought not be perpetually applied to successive generations of nuclear materials produced by countries requiring initial Agency to embark on a peace peaceful nuclear programme.”

    Above all , he further objected to “ the clause that all fissionable materials recovered, or got as by-product, be invariably deposited with the Agency” wanting to dispense with U.S. hegemony. In Homi Bhabha’s view, the IAEA would unwarrantedly hold a country’s economy on nuclear power generation when the Agency’s help was only initial. The Russians swung to India’s view. Forgotten is also the fact that a tabled rescue compromise by France and Switzerland, not dis-aligned from India’s basic need, to produce fissionable materials for research and fuel use in reactors in operation or not, What is not said to day is that, India is the only country then, that insisted that IAEA should not help countries having a military programme, a clause India most unfortunately took back After 48 hours, however, Admiral Lewis accepted the French-Swiss proposal after consulting John Foster Dulles. May I close with a last quote for good reasons they are worth: “Dr. Bhabha saw the line dividing military and non-military very thin”.

    So the fundamental question. Were the Americans right? My answer is, they were. Only, they terrorised a Stalinist Russia with their unwanted nukes on Hiroshima and Nagasaki. For this cardinal mistake the U. S and the world bleed even today. A leadership and chance stupidly lost because of this blunder for decades.

    George Chakko, former U.N. correspondent, now retiree in Vienna, Austria.

    Vienna, 10/ 04/ 2017 10:55 hrs

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