A case for nuclear energy

COP-8 has sent a strong message in favour of nuclear power in view of its potential to mitigate greenhouse gas emission and the resultant climate change.

NUCLEAR power does not give rise to stack emissions, which accompany the generation of power from fossil fuels. It produces virtually no greenhouse gases (GHGs) and, according to World Nuclear Association (WNA) estimates, each year nuclear power plants around the world avoid emissions up to 2.5 billion tonnes of carbon dioxide (CO2). According to the estimates of the International Atomic Energy Agency (IAEA), emissions from the entire nuclear fuel cycle - from uranium mining to waste disposal - are in the range 10 to 50g of CO2/kWh, which is of the same order as emissions from wind energy. This should be compared with emissions from fossil fuels, which range from 450g to 1,200g CO2/kWh. In terms of full energy chain (FEC) calculations, the range of total GHG emissions (not just CO2) - in grams equivalent of carbon per unit of electricity (gCeq/kWh) - from various electricity production sources and the corresponding chains is shown in the diagram.

The recent Special Report on Emission Scenarios (SRES) of the Inter-governmental Panel on Climate Change (IPCC) quantifies the potential of nuclear energy to mitigate climate change and notes that it will remain a notable part of the energy-mix irrespective of the different policies and scenarios evolved to reduce GHG emission. It would seem ironical, therefore, that nuclear power figures only marginally in the United Nations Framework Convention on Climate Change (UNFCCC) negotiations. Indeed, the Kyoto Protocol, which is the only legally binding mechanism that has been put in place in this respect, restricts the use of nuclear energy as a means to achieve emission reduction targets by Annex-I Parties to the Convention, namely industrialised countries and economies in transition, as mandated by the Protocol.

According to the Kyoto Protocol, Annex-I countries "shall, individually or jointly, ensure that their aggregate anthropogenic CO2 equivalent of GHG emissions... do not exceed their assigned amounts... with a view to reducing their overall emissions by at least 5.2 per cent below the 1990 levels in the commitment period 2008 to 2012." The Protocol establishes three `flexibility mechanisms' in addition to domestic actions that can be used by Annex-I parties to meet their targets. The mechanisms are: joint implementation or JI (Article 6), clean development mechanism or CDM (Article 12) and emissions trading or ET (Article 17). The Bonn Agreement on the Protocol, arrived at in July 2001 at the extended Sixth Conference of the Parties (COP-6bis), forbids the use of nuclear energy under the JI and CDM mechanisms.

JI is a cooperative mechanism that involves two or more partners from Annex-I countries, which are subject to quantified emission reductions, with distinctly different marginal GHG mitigation costs. Any Party included in Annex-I may transfer to, or acquire from, any other such Party emission reduction units (ERUs) resulting from projects aimed at reducing anthropogenic emissions. That is, it is a transaction amongst Annex-I countries only. The acquisition of ERUs, the Protocol says, "shall be supplemented by domestic actions" to help meet the targets.

The CDM, on the other hand, involves projects to be implemented in non-Annex-I countries with financial assistance and technology transfer from Annex-I countries. The CDM, modelled after the concept of JI, seeks the "meaningful participation of developing countries" in the global effort to mitigate climate change. Both mechanisms are based on the principle that while GHG mitigation costs could differ significantly between regions, the impact on climate is independent of the geographical location of the emission or emission mitigation. This enables the achievement of substantial mitigation effects at proportionately lower costs (per tonne of C-equivalent of GHG emissions avoided). Through this mechanism, the recipient country obtains modern technology at a lower cost, while the investing country/firm receives Certified GHG Emission Credits (CERs), which can be applied against its domestic reduction commitment. Thus CDM aims to benefit both Annex-I and non-Annex-I parties.

Based on the premise that allowing economic agents to trade national ERUs or emission permits would lower the costs of meeting aggregate emission reduction targets substantially, the Protocol includes such a trading provision in Article 17. The buyers would be countries where the cost of reducing emissions is high. The Protocol states that this will be supplemented by domestic action. Provisions under the ET mechanism implies that if one party wishes to emit more than the assigned amount, it has to acquire the corresponding amount of emission permits from other parties. The selling parties are then required to reduce their emissions beyond the required targets. Given the condition on domestic reduction, parties can buy only part of their reduction commitments.

During COP-6 in November 2000 at The Hague, the role of nuclear energy in the CDM/JI was strongly debated. It is clear that CO2 emissions would be reduced if nuclear and renewable energy is used as CDM or JI projects instead of fossil fuel projects that a recipient country may find affordable in the usual course. However, when COP-6 met again in Bonn, the Parties agreed "to recognise that Parties included in Annex I are to refrain from using CERs (or ERUs in the case of JI) generated from nuclear facilities to meet their commitments under Article 3.1." The Parties also agreed "to affirm that it is the host Party's prerogative to confirm whether a CDM project activity assists in achieving sustainable development." Thus, a country is free to declare that a nuclear energy project would contribute to its sustainable development; as indeed would the countries of the Asian region, particularly, Japan, India, China, Korea and Taiwan. However, since there are no CERs to be gained, it is unlikely that an Annex-I country will come forward to assist in the implementation of a nuclear energy CDM project in a non-Annex-I country.

Although the West is not building any new nuclear installations, there are signs of a revival on this front (see box). While Annex-I countries are not entitled to CERs from nuclear projects that are executed in non-Annex-I countries, they can use nuclear power for domestic purposes. Japan is one Annex-I country that has formulated a plan of action based on a mix of nuclear power and renewables in order to meet its targets. Germany, on the other hand, has rejected nuclear energy as an option to mitigate climate change. At COP-8, the German Federal Minister for the Environment, Natural Conservation and Nuclear Safety, J. Trittin, stated that the phasing out of nuclear energy would begin by 2010 and that his government's policy would be to increase the share of renewable energy up to 40 per cent and improve energy efficiency in all sectors of the economy.

In this context and given the IPCC's observations, the role of nuclear power may become significant not only with respect to meeting Kyoto targets but beyond Kyoto - in the post-first commitment period beyond 2012. It was from this perspective that a side event on the topic of "Nuclear energy and the Kyoto Protocol" was held at COP-8. It was sponsored by the Nuclear Energy Agency (NEA) of the Organisation for Economic Cooperation and Development (OECD). The session was addressed by Hans-Holger Rogner of the IAEA, Evelyne Bertel of the NEA, Akira Nakanishi of the Atomic Energy Division of the Japanese Ministry of Education, Culture, Sports, Science and Technology and P.B. Grover of India's Department of Atomic Energy (DAE).

Rogner emphasised that credible longer-term energy demand and supply analyses by the IAEA foresaw a growing role for nuclear power. He added that in the short and the medium term, drastic GHG reductions were not possible without recourse to nuclear energy. "Nuclear power alone is not the solution to climate change but it had to be an integral part of any strategy," he stressed. Observing that foreclosing the nuclear option ran counter to the concept of sustainable development, he said: "Future societies may well opt to stay away from nuclear power. But they should be allowed to decide for themselves."

While the Kyoto Protocol disallows the implementation of JI or the CDM with nuclear energy projects, there is no statement with regard to ET or Article 17 in the Bonn Agreement; according to the NEA's Bertel, emission reductions due to the use of nuclear power may be traded. As of now, only guidelines, rules and regulations for the implementation of JI and the CDM have been agreed upon. In fact, any substantial progress on these with regard to the CDM was made only at COP-8. Although emission trading between domestic entities of a country is permissible - and this would depend only on domestic laws as was established in the United Kingdom recently - trading between Parties cannot begin because the guidelines and rules for these are yet to be worked out. For instance, the maximum amount that can be traded between countries, as a fraction of the reduction target of the buying country, has not yet been specified.

However, in the case of the countries of the European Union, since they are permitted to implement the Protocol as a single entity and arrange different emission levels among themselves in order to achieve the combined emission target of 8 per cent below the 1990 levels, emission trading is permitted. According to the E.U. spokesperson, an ET system has been put in place for the region. Of the nearly 5,000 entities permitted to trade, some are agencies that produce nuclear power.

However, according to a recent report of the OECD, analytical studies and simulations carried out so far indicate that as a flexibility mechanism ET does not have any strong implications. This, according to the report, is because the concept of a market value for carbon emission avoidance is yet to be evolved. If a trading regime evolves to include such a carbon value, nuclear energy could emerge as a competitor to carbon-emitting energy sources, the report points out.

According to Bertel, the Protocol was the result of a highly political process in which trade-offs and compromises were reached to accommodate the conflicting interests of the different Parties. As a result, the basic objectives and the underlying principles of the mechanisms were often unclear, she said. According to her, the debate over the inclusion of nuclear energy in the CDM was driven by varying perspectives of sustainable development. The view against nuclear energy was based on issues of safety, radioactive waste disposal and proliferation of nuclear weapons.

Another perspective that contributed to its omission from the CDM was that large projects were inherently unsustainable. It was argued that the CDM should be used exclusively for small-scale projects that involve increased use of renewable energy sources and for improvements in energy efficiency. This view excludes not only nuclear energy, which usually involves large-scale projects (construction of small nuclear plants is a viable concept now), but also large hydropower projects and "clean coal" projects that involve trapping and CO2 sequestration components. Indeed, opposition by non-governmental organisations (NGOs) to large dam projects involving the CDM was in evidence at COP-8.

However, at Bonn, exclusion of certain technologies from the purview of the CDM was opposed by some developing countries saying that it amounted to an infringement of their sovereign right to determine their own technological path to a sustainable future and involved the imposition of other technologies. However, developed countries argued that the CDM investing parties or the CDM process itself had the right to decide which technologies are sustainable, especially those with potential trans-border effects. The upshot of Bonn is that although the exclusion of nuclear energy from the CDM does not bar a non-Annex I country from deploying it for mitigation measures, it prevents the use of the CDM subsidy for the purpose. Bertel further pointed out that in the absence of agreed emission targets beyond 2012, the CDM referred only to the first commitment period. Therefore, even if nuclear projects were allowed within the CDM, taking into account the time needed to plan and construct nuclear plants, it would be extremely unlikely that any of them could generate CERs before 2012. In that sense, she said that the exclusion of nuclear energy from the CDM was largely symbolic. However, she cautioned that this exclusion could get locked in when commitment periods and emission targets were set. She underlined the importance of recognising that in the long term, nuclear energy could contribute significantly to the reduction of GHG emission and said that there was a need to ensure its inclusion in the CDM in the post-Kyoto period.

Based on case studies, an IAEA report has concluded that nuclear power plants would lead to long-term certifiable GHG reductions in contrast to fossil fuel projects that would otherwise have been implemented in these countries, and thus satisfied the CDM criterion of "environmental additionality". Nuclear power also satisfied the other criterion of "financial and technological additionality", the report concluded. The argument is that implementing CDM nuclear projects, instead of fossil fuel plants, would require supplemental financial resources and implementing nuclear projects would involve technology transfers to the host country.

Even if nuclear power is included in the CDM in the post-Kyoto period, there are obstacles. For one, transfer of nuclear technology has never been favoured by the nuclear majors of the world on the grounds of its proliferation potential although IAEA safeguards are invariably part of such transfers. Secondly, in the case of countries such as India, Pakistan and Israel that are not signatories to the Nuclear Non-Proliferation Treaty (NPT), any nuclear transfer does not automatically trigger the imposition of full-scope safeguards (FSS). The implication of FSS is that all nuclear activities would be brought under the safeguards regime of the IAEA, not just safeguards on the technology being transferred or on a project being executed. However, in the revised guidelines of the 38-member Nuclear Suppliers Group (NSG), no nuclear technology can be transferred to non-NPT signatories without invoking FSS.

The implication of this is that developing countries that are NPT signatories or countries that are willing to accept FSS on their nuclear activities would stand to gain if nuclear energy becomes part of the CDM after 2012. The three NPT non-signatories have resisted FSS all along. Their stand thus precludes the possibility of nuclear CDM projects being executed in India, Pakistan and Israel. That the GHG-mitigating potential of nuclear power would be a strong argument to implement nuclear power projects in all countries as part of domestic measures, Annex-I and non-Annex-I, was the message of the COP-8 side event.