Energy

How American Penalties Dwarf the Liability US Nuclear Firms Will Face in India

A $48-billion (Rs 3.26 lakh crore) penalty claimed by the US government from Volkswagen for cheating on diesel-car emissions is about 200 times as large as the $225 million (Rs 1,500 crore) insurance pool set up by Indian insurance companies to compensate US nuclear companies for mishaps in India.

If a US nuclear company were to build a reactor in India that suffered a catastrophe, and people were to die in India, the US government’s position seems to be that American suppliers shouldn’t face civil or criminal liability. The US believes the Indian civil nuclear liability law, which calls for both penalties, is unduly harsh. Rather than say so directly, US officials keep repeating that the “Indian law is inconsistent with the international liability regime.”

The Indian civil nuclear liability law holds the equipment supplier responsible for any incident caused by the supplier or its employees. The Indian liability law differs from those of other countries because it was drafted keeping in mind the 1984 Bhopal tragedy – where despite 5,000 deaths and effects across generations, no one was held criminally liable.

The penalty demanded in the Volkswagen case is about 100 times the compensation of $470 million – ($907 million in 2014 dollars) – paid by US firm Union Carbide after the Bhopal Gas tragedy, which also left 70,000 people maimed or injured. Volkswagen’s cover-up caused no injuries or deaths.

Although the Indian government wants to protect US nuclear companies against the Indian liability law, critics argued that these companies are using India’s eagerness to avoid any liability, if something goes wrong.

India wants to build more nuclear power plants in an attempt to reduce the share of coal in electricity generation. Increasing the use of nuclear power is also a part of the country’ss trategy to tackle climate change.

India currently has 5,780 mega watts (MW) of nuclear power in operation and plans to add another 17,400 MW of capacity, making it possibly the largest market for nuclear power after China, and a financially lucrative prospect for Western firms faced with limited domestic sales.

However, the 2011 Fukushima nuclear disaster, caused by an earthquake, followed by a tsunami, has heightened concerns of nuclear safety and accident costs. The fallout of that disaster will also make it hard to change India’s liability laws.

The US’ large settlements extend to corporate wrong-doing beyond its borders

Large settlements paid out in the US are a regular feature. In October 2015, the US Justice Department arrived at a settlement with oil major BP, which will pay a penalty of $20.8 billion to cover the economic and environmental damage arising from a 2010 oil spill in the Gulf of Mexico.

Volkswagen–the company allegedly installed devices that sidestep emission norms in 600,000 cars–could, in theory, face fines of as much as $37,500 per vehicle for each of two violations of the law; up to $3,750 per “defeat device”; and another $37,500 for each day of violation, a Reuters report said.

In April 2010, a deepwater oil-drilling rig operated by BP, the Deepwater Horizon, suffered an explosion which killed 11 men, and the well it was drilling leaked over five million barrels of oil in the Gulf of Mexico (Refer Table 1).

This was the largest-ever settlement in the history of the Department; the Volkswagen penalty could be larger.

A number of companies have paid tens of billions of dollars in fines over the past decade for breaking US law.

Top US banks, such as Bank of America, JP Morgan, Citigroup and Morgan Stanley, have paid multi-billion dollar fines for their roles in the 2008 global financial crisis, caused by reckless business practices of large Western banks.

The remit of the US Justice Department extends beyond its borders and to foreign firms as well. In May 2015, five global banks–Citicorp, JP Morgan, Barclays, UBS and the Royal Bank of Scotland–agreed to pay fines adding up to $2.5 billion, for manipulating a widely-used financial benchmark set in London. This brings the total penalty paid by these banks for their role in this manipulation to $9 billion.

UK-based HSBC was fined for “illegally conducting transactions on behalf of customers in Cuba, Iran, Libya, Sudan and Burma”–countries under US economic sanctions.

During the financial year 2015, the US justice department collected $23 billion in penalties in various civil and criminal cases, slightly lower than the collection for 2013 (Refer Table 2), when it had a record haul.

Indian firms also fined in the US

While the US nuclear industry wants to avoid any liability in India for acts of omission or commission, Indian companies have often been slapped with large fines for violations of US law.

Drug manufacturer Ranbaxy paid penalties of $500 million (Rs 3,400 crore) in 2013 for falsifying data about its drugs and for not following proper manufacturing practices–more than twice the value of the nuclear liability insurance pool to be created in India.

In 2013, tech firm Infosys paid a $35 million penalty in a civil settlement on allegations of visa misuse; the firm maintained that the “claims are untrue and remain unproven”.

India has started levying penalties too

India, too, has started levying big fines. For instance, in 2013, a group of Indian cement companies was fined Rs 6,698 crore by the Competition Commission of India for working as a cartel and over-charging consumers. This amount, levied for unfair business practices rather than causing deaths and injuries, is 4.4 times the proposed liability cap for nuclear incidents.

Similarly, Delhi-based real estate firm DLF has been recently ordered to pay a penalty of Rs 630 crore for unfair business practices.

(Bhandari is a media, research and finance professional. He holds a B-Tech from IIT-BHU and an MBA from IIM-Ahmedabad.)

India’s Nuclear Liability Regime is Still Up in the Air

The ratification of the CSC coupled with a hortatory declaration is far from the ‘conclusive step’ in civil nuclear liability issues in India that the MEA envisages.

The ratification of the CSC coupled with a hortatory declaration is far from the ‘conclusive step’ in civil nuclear liability issues in India that the MEA envisages

India ratified the Convention on Supplementary Compensation for Nuclear Damages (CSC) in Vienna last week. The ratification has been hailed by the Ministry of External Affairs as “a conclusive step in the addressing of issues related to civil nuclear liability in India”. The United States has welcomed it as “an important step toward creating a global nuclear liability regime”. The truth of its significance however might be a trifle more sobering.
India’s ratification to the CSC required it to declare that its national law is in compliance with the annex to the convention. It did so, despite the presence of section 17(b) of the Civil Liability for Nuclear Damage Act, 2010 [PDF], squarely contrary to article 10 of the annex to the convention.

Article 10 of the annex reads:

National law may provide that the operator shall have a right of recourse only:

1. if this is expressly provided for by a contract in writing; or

2. if the nuclear incident results from an act or omission done with intent to cause damage, against the individual who has acted or omitted to act with such intent.

Section 17 of the Act reads:

The operator of the nuclear installation, after paying the compensation for nuclear damage in accordance with section 6, shall have a right of recourse where:-

(a) such right is expressly provided for in a contract in writing;

(b) the nuclear incident has resulted as a consequence of an act of supplier or his employee, which includes supply of equipment or material with patent or latent defects or sub-standard services;

(c) the nuclear incident has resulted from the act of commission or omission of an individual done with the intent to cause nuclear damage.

It is plainly evident that article 10 allows only two conditions when national law allows recourse against the supplier. These two conditions are reproduced in section 17(a) and (c). Section 17(b), irrespective of its merits, is a third condition. Such a condition is not permitted by the CSC by a simple reading of its provisions, though the legal adviser to the Department of Atomic Energy has argued it is.

This is especially so since parliament itself recognised a departure from international norms while deliberating on the provision. The Parliamentary Standing Committee on Science and Technology on whose recommendation the wording of Section 17(b) was changed to resemble its current formulation categorically stated:

Hence there should be clear cut liability on the supplier of nuclear equipments/material in case they are found to be defective.

Further, this was not an acontextual remark. Prior to the existing language used in section 17(b), the right of recourse against suppliers was provided for only in instances involving ‘wilful acts or gross negligence’. However, on the recommendation of the standing committee, the language was amended to reflect a provision similar to the product liability laws that hold the supplier liable for product liability, faulty design, faulty manufacture, and/or negligence.

This amendment was made on account of the fact that instances involving ‘wilful acts or gross negligence’ required proof of intent, difficult to establish in law. Instead, the standing committee observed that liability for latent and patent defects in supply should be specifically provided for. This is not only because this did not require proof of intent, but also since such defects in nuclear equipment or material were not disclosed by the suppliers, a practice that had to be curbed. Parliament thus consciously departed from the CSC provisions in legislating section 17(b) to adopt a fault-based liability regime for suppliers. Scarcely can dextrous diplomacy bypass such an imperative mandate of the law and parliamentary will.

Furthermore, and herein lies the rub, such diplomacy is based on a fundamentally flawed legal proposition: that section 17(b) is an enabling provision which allows operators to take advantage of it should they wish to, or waive it if they do not. The defect in this argument dates back to a view taken by the MEA and made available publicly in an opinion given by the previous attorney-general, Goolam Vahanvati:

Section 17 of the CLND Act, 2010 is a kind of enabling provision; it gives a specific right to the operator but does not place any mandatory obligation or requirement to exercise the right of recourse against the supplier. In the absence of a mandatory obligation, the operator could choose not to exercise that right. It is a statutory right and not a fundamental right under the constitution.

In reply Vahnavati says,

The views of the MEA cannot be said to be legally unsustainable, but a question may arise about advisability of such a waiver, particularly when NPCIL is a PSU.

This raises a key subsequent question, not conclusively dealt with by the AG: Is waiver of a statutory right of a generic nature that imposes heavy obligation on national resources if exercised in conformity with public policy? A little further research would have demonstrated that it is arguably not.

Indian public policy would be irreparably harmed if operators which are all government entities are permitted to defy the express will of Parliament by entering into a contract to the contrary. This is especially so if such a waiver results in letting a defective supplier off the hook and making the taxpayer pick up the tab for his defects. This legal position is clear from Supreme Court precedent. It is only for the Supreme Court to overrule such a view or take a position to the contrary. For the MEA to contend otherwise without any affirmation from the Court, amounts to curious doublespeak by the Indian state.

Thus ratification of the CSC coupled with a hortatory declaration is far from the ‘conclusive step’ in civil nuclear liability issues in India that the MEA envisages. It reflects a myopic resolution of a stark and uncomfortable dilemma that has plagued the MEA ever since the Act was passed – either, to recommend its amendment to bring it in line with the CSC to assuage nuclear suppliers, or stand firmly behind its act which has the potential to herald a new and more equitable regime for nuclear liability internationally. The MEA has steadfastly refused to do either. As a result it has ended up walking what it believes to be a diplomatically sound tightrope. Unfortunately this tightrope belittles parliament, intensifies legal complexity, all the while largely failing to assuage nuclear suppliers.

It is high time that the MEA opened its eyes to the fact that they’re not walking a tightrope – they’re on thin air.

Arghya Sengupta is Research Director, Vidhi Centre for Legal Policy. He was lead author of a report titled: “Operationalising India’s Nuclear Agreements: Issues and Solutions of Nuclear Liability” which contains detailed arguments on this issue. It may be accessed here.

Why the Road to Nuclear Fusion is Necessarily Bumpy

The takeaway is that despite its steep costs, we can’t afford to not support an idea like fusion.

The Wendelstein 7-X device. Credit: Wikimedia Commons

While the realisation of nuclear fusion power is often raked up as a fitting example of a sunk cost fallacy, the amount of work going into realising it someday is as necessary as it is intensive. When the first explosion by a nuclear fusion reaction was conducted in 1952, scientists were filled with optimism about harnessing the power of nuclear fusion in a controlled manner – for production rather than destruction, and for generating clean energy. But for years, the technological and scientific hurdles of this proved to be too much, leading many a pessimist to wonder: can we actually harness this stellar formula for producing energy on Earth?

On February 3, 2016, German Chancellor Angela Merkel pressed a button that switched the Wendelstein 7-X on. The 7-X possesses a design considered radical for sustaining fusion reactions – the more conventional options are the tokamak and using inertial fusion – and has already proved itself relatively worthwhile. According to Hans-Stephan Bosch, a division head for the 7-X project, “The device’s first hydrogen plasma has completely lived up to our expectations.”

Most of the world’s leading fusion energy projects employ a tokamak, a doughnut-shaped chamber that is made to hold the plasma in the grip of a strong magnetic field, in turn generated by strong electric currents. The plasma is a superheated state of matter that acts as a fuel-bed for the fusion reaction. The stellarator, while borrowing a similar doughnut shape, uses a system of coiled magnetic fields to contain the plasma, relying less on the strength of the current itself as well as proving itself less fragile than the tokamak. As a result, the stellarator can operate continuously rather than in short pulses.

In another major boost for the fusion community, just five days after the 7-X powered up, physicists in China announced that their homegrown tokamak fusion machine, Experimental Advanced Superconducting Tokamak (EAST), had successfully produced and contained plasma at a temperature of close to 50 million kelvin for an impressive 102 seconds, three orders of magnitude better than the 7-X’s quarter of a second (impressive in its own right). Does this mean the tokamak is better than the stellarator?

Matthew Hole, a senior fellow at the Centre for Plasmas and Fluids at Australian National University, told Gizmag, “These are impressive feats in their own right, but they are different geometric problems using different magnetic confinement concepts. One is twisted and one is a straight doughnut. They have different performance properties, but common to both of them, in addition to ultra-long pulses, is you want high temperature, high density and long energy confinement times.”

Both EAST and the 7-X were able to achieve the latter attributes – but both were shots in the arm for the tokamak and research communities, respectively. The tokamak provides scientists with critical data on plasma physics while simultaneously functioning as working proof of the ability of a stellarator and a tokamak to function as the core of a fusion energy power plant in the future.

In the case of fusion energy, experts reckon that we might be decades away from an operational plant. So then why are governments spending billions on such futuristic devices? Is the massive investment and overhead justified for a technology that may turn operational only in a few decades? John Jelonnek, a physicist whose team works on a critical component of the 7-X, puts it rather simply: “We’re not doing this for us, but for our children and grandchildren.”

According to the World Energy Council, we are already dangerously close to a point where the demand and consumption of energy by the existing population outweighs the available energy. Current technology is incapable of supplying the shortfall, at least not single-handedly. Nuclear fusion may just be that magic technology that solves this impending crisis. It has all the tropes that accompany an ideal energy source: it is reliable, has a seemingly never ending fuel-supply and, most importantly, is clean. Given our ongoing struggle with mitigating the effects of climate change, it’s imperative to back such an energy source.

As Michael Williams, head of engineering at Princeton’s Plasma Physics Lab, told Huffington Post, “Fusion is an expensive science because you’re trying to build a sun in a bottle.” Engineers have to come up with materials that can sustain large structural and thermodynamic loads along with radiation that can cause damage at the atomic level. Physicists have to figure out how to achieve maximum containment and control turbulence in plasma. And, ultimately, the undertaking has to continue to be funded.

Consider the the International Thermonuclear Experimental Reactor (ITER) project.

It is a labour-intensive umbrella undertaking involving the European Union, India, Japan, Korea, Russia, China and the USA – with the final aim of using a fusion reactor to consume 50 MW and produce 500 MW. The project was initially seeded in 2006 with an estimated cost of EUR 5 billion and first plasma test in 2016. The cost today stands at EUR 15 billion and the first plasma test slated for around 2023. While construction for the test device has begun in southern France, the project schedule was advanced after a project’s governing council met last year. And while the official communiqué didn’t release an official date for the first plasma test, it is widely rumoured to be closer to 2025.

Why is ITER taking so much time to get off the ground? Elizabeth Surrey, head of fusion technology at the Culham Centre for Fusion Energy, Oxfordshire, states that a commercially viable fusion power plant is such a complex integration of so many interconnected systems that “no single entity can be identified as the major obstacle”. In a recent interview, Thomas Klinger, project head of the 7-X, highlighted how some structures his team built weighed tonnes – but had been assembled with a level of precision of a few microns. “If we had known how difficult it would be to build, we might not have embarked on it in the first place,” he remarked.

ITER suffers because of the scale at which its collaboration operates. According to Michael Classens, the head of communications, “The main challenge for the project is not the science and technology itself, but the management as a whole, the way these 35 countries cooperate.” Even Osamu Motojima, former director-general of the ITER Organisation, admitted that “it’s a bottom-up process that integrates technical data and work schedules for different components made by different countries”. Another problem for the project is that some member states working on schedule end up funding an expensive delayed production schedule for a slacking member state.

But even as ITER soldiers labours, one can’t help but be optimistic. According to Steve Cowley, chief executive of the United Kingdom Atomic Energy Authority, “It can’t possibly be that we’ve got this close and we can’t see it through to the end. Once this problem is cracked, we’ll have [fusion energy] forever. It’s just taking a long time to get there.” Meanwhile, as a backup to the ITER design, there are groups across the world working on alternatives that could provide significant breakthroughs and data for the fusion energy community. China has EAST, Germany has the 7-X, and the US was able to recently achieve a breakthrough in inertial containment fusion.

The takeaway is that despite its steep costs, we can’t afford to not support an idea like fusion.

Geopolitical Impact of Oil’s Drop Shows Why There’s No End in Sight

The prolonged drop in oil prices is forcing countries to pursue economic reforms and reduce expenditure. The result will be nothing short of a reorganization of political power.

The price of crude oil resumed its slide this week, falling to about US$29 a barrel and approaching the 12-year low reached last month.

The International Energy Agency is warning oil’s fall has further to go. So what factors suggest the price of oil will continue to drop? And what will be the economic and geopolitical fallout? The answers to these two questions go hand in hand, as we shall see.

First let’s recap what’s behind the plunge in the first place.

Supply and demand

In short, supply is up; demand is depressed.

Oil production in the U.S. has increased markedly since 2012, in part thanks to new technologies that have made it possible to extract more oil at a faster pace and deeper than was possible even a few years ago.

At the same time, the Organization of the Petroleum Exporting Countries (OPEC) has raised its production quota to 31.5 million barrels per day. For many, this decision is largely due to Saudi Arabia, which wishes to protect its market share and limit the development of shale gas in the U.S.

Demand, on the other hand, has not increased as quickly.

This is in part due to China’s economic slowdown and the ripples it is sending across the world, while the devaluation of the yuan has made oil more expensive.

In addition, due to mild December weather in most European countries, Russia and the U.S. (where it was 73 degrees Fahrenheit/22 degrees Celsius in New York City on Christmas Eve), oil consumption for heating has also been muted.

Iran the game-changer

For the geopolitical implications and a key reason we can expect the price of oil to continue to drop, let’s first look at Iran.

The nuclear agreement the country signed with the U.S. and other world powers last July was a game-changer, allowing Iran to return to the international market after years of tough sanctions.

The extra oil on the market could cause the price of crude to drop by $10 a barrel, according to a report by the World Bank. Iran confirmed on January 18 that the country’s daily oil production of 2.9 million barrels would be immediately increased by half a million, and another million by the end of the year.

In other words, Iran’s return will change the current international dynamic, elevating its influence in the region and beyond, potentially at the expense of adversaries like Saudi Arabia.

In addition, the rupture of diplomatic relations between Saudi Arabia and Iran following the former’s execution of 47 prisoners (including the outspoken Sheikh Nimr al-Nimr, described by Iran’s Supreme Leader as a “martyr”) suggests that neither country will be willing to reduce production and might even do everything within their power to increase market share.

Bad news for other oil producers

Other oil-producing countries have been hit hard by the 70 percent drop in oil prices since mid-2014. Many countries are affected by the drop in oil prices, and each will likely need to take quick action and implement reforms to avoid a liquidity crisis or even bankruptcy.

Venezuela, for one, is on the verge of bankruptcy, and its $125 billion debt load may force a reckoning after the government has failed for years to institute reforms. Russia, whose economy has also been battered by sanctions, is slashing spending and trying to avoid a second year of recession. Its dire situation also shows the consequences of putting off economic reforms, as oil still represents half of its budget revenues.

Kazakhstan, Central Asia’s largest economy, risks depleting the fund it uses to invest in the country’s infrastructure and industry. The fund, which was down to $64 billion in January from $77 billion in 2014, could run out within six to seven years as the government withdraws cash to make up for the lack of oil revenue.

Norway is also suffering. Statoil, the Norwegian oil and gas company, has already cut 20,000 jobs. Given that Norway’s oil industry employs one out of every nine Norwegians, the country could soon see an increase in its unemployment rate.

Saudi the reformer

For Saudi Arabia, even as it keeps production levels high and slowly drains its own reserves, the price drop has led the country to initiate widescale reforms and begin to rein in the generous water and power subsidies it gives to its citizens.

Oil exports make up 90 percent of the kingdom’s income, and the shortfall has created a deficit of $89.2 billion.

The government has already increased the price of gas by 50 percent and said that it will reduce other subsidies as well. In addition, a value added tax (VAT) of 5 percent was implemented for nonessential goods.

If prices stay low, they may completely transform the Saudi economy as the private sector grows at the expense of the public sector. One sign of that is the hint from Muhammad bin Salman, the son of King Salman, that the kingdom’s oil company Aramco might go public and allow outside investors.

If this occurs, it would inject badly needed new money into Saudi Arabia’s purses and confirm the desire for radical reform. It would also signal an economic revolution among the major oil companies.

Forcing reforms

The prolonged drop in oil prices is forcing countries to pursue economic reforms – in some cases ones that remake their economies by bolstering the private sector; in others drastically reducing spending just to stave off insolvency.

Yet the Chinese economic slowdown, the return of Iran to the oil market and the world’s elevated reserves suggest that supply will continue to outpace demand and keep prices low – and even push them down to $20 a barrel.

The result will be nothing short of a reorganization of political power. How it will shake out is still unclear.

Editor’s note: This article is based on an earlier version published in French.

Isabelle Chaboud, Professeur d’analyse financière, d’audit et de risk management, Grenoble Ecole de Management

This article was originally published on The Conversation. Read the original article.

India’s Only Hope of Squaring the Climate Change Circle is to Step on the Gas

If India has to depend on fossil fuels for its energy requirements, at least in the short to medium term, natural gas is by far the cleanest option.

Power grid. Credit: Ram Joshi/Flickr CC 2.0

Now that the euphoria over the Paris climate agreement has settled down, India, like other developing countries, will have to face up to the reality of a restricted carbon space available to deliver on the ambitious promise of development to her people. Service-sector-led growth has been flogged to saturation and the new emphasis on ‘Make in India’ will require us to consume greater quantities of energy even if we adopt efficient technologies.

India’s Intended Nationally Determined Commitments (INDC) submitted to the UNFCCC is a glib and somewhat self-congratulatory document. Nevertheless, it makes certain key commitments to the international community. Fulfilling these commitments will require us to make a paradigm shift in the way we produce and consume energy.

Therefore, the first task would be to review our energy basket and shuffle it a bit. Electricity is the cleanest and most convenient form of energy, but the way it is generated is often dirty. The dirtiest of all – coal-based electricity generation – should be the primary target of our fight against global warming. At present, coal constitutes a little over 60% of our installed power generation capacity, but for various reasons, in terms of actual units generated, coal usually accounts for well over 80% of all the electricity consumed in the country. So, reducing the share of coal and using it in a more responsible manner has to be our first priority, notwithstanding our public posturing in this regard. The responsible use of coal would mean extracting higher efficiencies through the adoption of supercritical, ultra-supercritical and other technologies. About 144 old thermal stations have been assigned mandatory targets for improving energy efficiency.

India’s INDC has committed that by 2030, 40% of our electricity would come from non-fossil fuel sources subject, of course, to funding and technology transfer from the international community. Even so, coal will account for a sizeable chunk of our power generation. International investors looking for business opportunities have zoned in on carbon capture and sequestration (CCS) as a technological manna for countries excessively reliant on coal. CCS involves separation of carbon dioxide from flue gas emitted by coal-fired power plants, compressing and transporting it by pipelines to exhausted hydrocarbon reservoirs or abandoned coal mines to be sealed and stored underground indefinitely. According to Vaclav Smil, the acclaimed international energy expert, the scale of the infrastructure required to compress and effectively sequester CO2 emissions would be so huge and expensive that it is simply not a viable option. Besides, it suffers from the ever-present risk of carbon leaking out of its storage in the future. Therefore, it is imperative that we move away from coal.

Our untapped hydroelectric generation potential is around 73 gigawatts, but not all of it can be exploited. Besides, even our existing hydel generation is far below its potential – dependent as it is, on the vagaries of the monsoon. It would be difficult to ramp up nuclear capacity by more than a few thousand megawatts on account of the huge costs, fuel issues and siting problems associated with nuclear plants.

Given the present levels of technology, that leaves us with two fuel options – renewables and natural gas. The government has launched the National Action Plan on Climate Change, which focuses on solar, wind etc. While solar does offer alluring possibilities, it alone can never meet India’s electricity requirements. Regardless of our commitments on renewables, it is unlikely that they will eliminate our dependence on fossil fuels.

Gas is the way to go

If India has to depend on fossil fuels, natural gas is by far the cleanest option. It emits less than half the carbon emitted by coal when used in power generation. The other greenhouse gases like sulphur and nitrous oxides associated with natural gas are also negligible. It is also quite versatile, since it can be used in process industries as well as in transport. In the developed world, natural gas accounts for a quarter of electricity generation whereas in India, we have only about 10% of thermal power generation capacity in the form of combined cycle gas generation turbines (CCGT). Actual generation from CCGT is negligible though, on account of shortage of gas in the country. The promised cornucopia of gas from the KG basin never materialised for a variety of reasons and the existing gas-based power plants are stranded for want of fuel.

Yet, all is not lost. Gas is fungible. It can be brought through pipelines from the neighbourhood or from afar in the form of liquefied natural gas (LNG) in cryogenic ships. Europe and Russia are linked through a welter of pipelines. China has built five stages of its West-East Pipeline system spanning tens of thousands of miles across to its eastern seaboard. India has been lagging behind in this regard. While the TAPI pipeline seems to be moving ahead, it has to cross many obstacles before it materialises. Preliminary studies are being conducted to explore the possibility of bringing an undersea pipeline from Iran, the world’s biggest gas giant. Undersea gas pipelines are not rocket science. They bring North African gas to Spain and Italy. Russian gas travels to Turkey and thence to Europe through several pipelines running through the Black Sea. With the lifting of decades-long sanctions, Iran is like Prometheus unbound, raring to go. While undersea pipelines are an expensive option, the current low gas prices can make them viable.

Natural gas prices worldwide are linked to crude prices. With crude prices at a historic low, it would be in India’s interest to quickly tie up long-term supplies of natural gas through pipelines where feasible and in the form of LNG. India has three functioning LNG terminals and a fourth one – the infamous Enron terminal in Dabhol which has been mothballed but can be commissioned with minimal effort and expense. Now is the time to build more LNG terminals to bring gas from other parts of the world. Gas is a much more abundant fuel than oil and many new LNG suppliers have sprung up in recent years in the Caribbean, in western Africa, Australia etc. India would do well to quickly set up more LNG terminals and sign long-term gas supply contracts incorporating a price-band.

Simultaneously, the domestic gas pipeline infrastructure has to be expanded. Without waiting for the market to come up with investments in gas infrastructure, the government must promote a national champion to roll-out the network and build the terminals, a model that has served other countries well.

Squatters on carbon space

While we embark upon these measures, we also need to rethink the concept of development. China has chosen and even succeeded in equating development with rapid urbanisation, energy-guzzling vertical growth, expansive high-tech infrastructure, privatised transport and glitzy malls etc. The Chinese model is neither feasible nor desirable for India. We must evolve our own development model, one that resists the seductions of an unsustainable energy-intensive lifestyle based on excesses.

But even as we do that, as our INDC rightly states, ensuring a modicum of decent living to our disadvantaged millions would entail GHG emissions of at least 4 tonnes per capita as against our current per capita emissions of 1.56 tonnes. But these statistics can be misleading. They are averages which help India’s affluent hide behind the country’s 300 million poor who emit next to nothing. Flaunting our low per capita emissions to demand a greater share of the remaining global carbon space may be useful in an international negotiating arena, but the government will have to ensure that the carbon space available to us is more equitably apportioned internally. After all, by its own admission in the INDC document, 304 million Indians do not have access to electricity. These Indians constitute a quarter of the global population without access to electricity. Will the government display the courage and the will to ensure that a sizeable capacity – if not all – of all new power plants will be earmarked to serve those who are not yet privileged to access this clean form of energy? Otherwise, the affluent Indians who already emit much more than their fair share of carbon will continue to hog the national carbon space.

Sudha Mahalingam is an independent energy consultant and former Member, Petroleum and Natural Gas Regulatory Board

The Fate of Dissent in an “Export-quality” Democracy

In any society, especially one that proclaims its democracy from the rooftop on every occasion, the right to dissent is paramount. Yet those who do usually end up facing the full might of the state.

Anti-nuclear activist SP Udayakumar. Credit: IANS

In India we often indicate the superiority of a particular product (be it a pair of pants or a crate of mangoes) by referring to it as being of “export-quality.” I have often wondered whether our much-vaunted democracy is another instance of something Indian that is not really intended for domestic consumption but only to impress those outside our country. It seems we have reduced democracy to just three things: (a) the conduct of largely free and fair elections; (b) orderly transitions of power between civilian regimes; and (c) the fact that the Indian armed forces are uninvolved in politics.

When subject to a less superficial and more substantive audit, our claims to democracy falter at so many levels.

Almost 70 years after independence, nearly 80% of our population remains incredibly poor, living on less than $2 a day. The degree of malnutrition among our young is the highest in the world. On the Human Development Index we are not only buried way down the list of nations, we are regressing in comparison to neighbors such as Bangladesh. What good is the right to vote if so many cannot even be sure of the next meal?

At any point in time since Independence the number of Indians in states governed by some form of authoritarian rule (Kashmir and the entire northeast come to mind) exceeds the population of many nations in this world. We claim to have freedom of press, but a study by Delhi’s Center for the Study of Developing Societies found that not one of the over 300 leading media executives and shapers of opinion was from a non-‘dvija’ background. While a rapidly rising number of authors and artists have rightly returned their Sahitya Akademi awards in protest over the growing communalisation of our institutions and public life, the murder of Dalits in broad daylight evokes barely a smidgen of protest.

It is strange that in the world’s largest democracy, any female between, say, 12 and 72 would be taking a huge risk if she were to venture out alone after dark into any of our cities. Female infanticide remains a horrendous blot on our record, while the lives of so many of the girl children who survive are marked by continuous deprivation and discrimination.

All this and more is well known, and the gap between our thin democracy and the substantive ideal remains wider than ever. What I would like to highlight, however, is one instance of how our democracy operates when faced with a most important and basic test: how does it treat a principled individual who happens to disagree with the state? I have in mind S.P. Udayakumar, an educator and opponent of the nuclear plant at Kudankulam in Tamil Nadu.

In the mid-1990s, S. P. Udayakumar completed his dissertation (on the politics of Hindutva and the threat it represented to Indian secularism) at the University of Hawai`i at Manoa. He had multiple options to work as a scholar in the United States and did so for a few years.

Udayakumar, however, was very clear that he had to return to his native Kanyakumari district to fulfill his lifelong ambition: to establish a quality school providing free education for the underprivileged.

In due course, with the support of local residents and small donations from his many friends in different parts of the world, Udayakumar and his wife Meera were successfully running a school whose philosophy of education was based on Gandhian principles in the best sense of the term. Most importantly, the school catered overwhelmingly to the poor and destitute from the lowest castes – precisely the people neither India’s state nor its much-vaunted emerging market ever gave a damn about.

Once Udayakumar became conversant with the various issues surrounding the nearby Kudankulam Nuclear Power Plant (KKNPP), he was drawn into the movement opposing its construction and commissioning.

The KKNPP, like so many other projects involving India’s nuclear establishment, is marked by cost overruns, dubious safeguards, poor environmental impact assessment, corruption, secrecy, and highly inadequate crisis-management planning in the event of a disaster. As M.V. Ramana’s meticulous research in his recent book has shown, our track record is one where the adverse impacts are visited disproportionately on the poor and any benefits accrue exclusively to our urban middle-classes. Udayakumar emerged as a well-informed, principled and staunch opponent of the KKNPP.

Yet, for doing that he has had about 380 patently false cases filed against him – including charges such as sedition and “waging war against the state.” The Supreme Court recently insisted that the state government of Tamil Nadu withdraw about 140 of the cases as lacking any merit but Udayakumar continues to be hounded, with about 30 charge-sheets filed by the police necessitating repeated appearances in court. Alongside this, his passport has been impounded; he is under continuous police and IB surveillance; and his bank accounts have been frozen. There is not one shred of evidence that any of his activities have been remotely against the law or the best interests of his community – yet the harassment is unending. The school that he and Meera started is now down to just about 125 students and has been attacked by the usual goondas with the covert support of the local police and party hacks.

In any society, especially one that proclaims its democracy from the rooftop on every occasion, the right to dissent from the state is paramount. The Udayakumars, Teesta Setalvads, Binayak Sens and Medha Patkars of our nation are to be treasured and valued for they are the exceptions, those who despite paying an enormous personal price have continued with the struggle. Think of how many who espoused the right causes gave up after the initial onslaught of trumped-up court cases, intimidation, allegations of being unpatriotic, and harassment? And further still, how many gave up without even trying after seeing what happens to whistle-blowers in our society?

Disagreement, dissent and principled opposition to authority are the lifeblood of any democracy. The example of Udayakumar’s continued harassment and intimidation by the Central, state and local governments, by political parties of every hue at both New Delhi and Chennai, is proof of our authoritarian core. Next time we feel the urge to celebrate our allegedly exceptional and vibrant democracy, let us instead remember that until individuals such as Udayakumar are treated with fairness and in accord with their constitutional rights, our democracy will be nothing more than yet another “export-quality” commodity: intended for foreign audiences but denied to those who matter within our own country.

Sankaran Krishna is professor of political science at the University of Hawai`i at Manoa in Honolulu, USA. He can be reached at Krishna@hawaii.edu

‘Production Subsidies are Driving the World to Burn More Fossil Fuel than it Needs’

Unfortunately, these environmentally damaging subsidies are often ignored during discussions on fossil fuel pricing and use, which tend to focus on the quantifiably larger and more politically controversial consumer-focused subsidies.

Unfortunately, these environmentally damaging subsidies are often ignored during discussions on fossil fuel pricing and use, which tend to focus on the quantifiably larger and more politically controversial consumer-focused subsidies

Scholven Power Station, a coal-fired power plant, in Germany. Credit: Guy Gorek

Chennai: With global climate talks set to happen in Paris in less than three weeks and a number of major economies having pledged to take action to limit climate change, a new report shows that the governments of G20 countries spend over $450 billion a year on propping up the production of fossil fuels.

According to the report, which was put out by the Overseas Development Institute and Oil Change International on Thursday, this number is nearly four times the entire global subsidies for renewable energy, which was $121 billion in 2014.

Some of the biggest offenders include Russia (nearly $23 billion in both 2013 and 2014), the US ($20 billion) and the UK ($9 billion). China, on the other hand, provided national subsidies of just over $3 billion annually on average between 2013 and 2014, including tax breaks for oil, gas and coal producers.

Fossil fuel production subsidies – or subsidies that are aimed at producers and often handed out in the form of state investment, tax breaks and public financing – are often ignored during discussions over fossil fuel subsidies, which tend to focus on the quantifiably larger and more politically controversial consumer-focused subsidies.

For instance, while this report places India’s national production subsidies at $103 million in both 2013 and 2014, India’s total fuel subsidy bill in 2014 alone was a little over $10 billion; which takes into account the vast jungle of taxes and consumer-aimed differential pricing for fuel that exist in India, especially for kerosene and diesel.

More Attention

And yet, as Alex Doukas, who is one of the report’s co-authors, points out, production subsidies are an area within climate change action that need more attention.

“It’s true that a lot of other research and analysis focusses on consumer subsidies, which do have a significant impact on climate change and the budgets of the world’s major economics. But in some ways, production subsidies are very scandalous. Because they represent money flowing from governments to private companies and because it drives us to produce more than what we would produce otherwise without subsidies,” Doukas, a senior campaigner at Oil Change International, told The Wire.

One of the more startling figures that the report throws out in favour of focusing on production subsidies, a statistic that comes from the IPCC’s fifth assessment report, is that in order to stay within the two degree limit needed to avoid dangerous climate change, the world must leave three-fourths of its existing fuel reserves in the ground.

“What you see is that a lot of the more developed and large countries continue to be some of the biggest financiers for fossil fuel production. And a lot of these countries lecture other countries on the need to reduce consumer subsidies. A lot of rich countries don’t like to talk about production subsidies,” Doukas added.

When it comes to the question of international public financing for fossil fuels, the report points out that Japan and China are the largest players, with Japan providing an annual average of $19 billion for 2013 and 2014 and China providing the second largest amount at almost $17 billion annually.

A separate report by Oil Change International shows that India is not a large recipient of international public finance, receiving only $4.1 billion between 2007 and 2014, most of which came from G20 countries.

While the report places India and China at the lower end of the list of G20 countries – with only South Africa being lower at $20 million in national annual production subsidies – it may not be a cause for jingoistic chest-thumping in Paris and certainly isn’t a cause for celebration just yet. Some of the data that the report depends upon isn’t wholly complete: in countries such as Indonesia and Saudi Arabia for instance, national subsidies could not be identified.

Also, investment by state-owned enterprises (SOEs) represents a major source of support for fossil-fuel based production. While China’s annual national production subsidy may be around $3 billion a year, the report also highlights the fact that SOE investment in China’s fossil-fuel production activities is more than double that of any other G20 country. “On average, Chinese SOEs invested $77 billion a year in fossil fuel production in 2013 and 2014,” the report’s authors write.

Annual expenditure on fossil fuel production by ONGC, IOCL, CIL and other SOEs in India amounted to nearly $15 billion on average in 2013 and 2014.

“While yes, India is certainly not the worst offender as far as our research goes, subsidies do come in different shapes and forms. India does provide a significant amount of public finance, mostly domestic. State-owned banks provided an annual average of nearly $2 billion in finance over 2013 and 2014, with the large majority of this going to coal-fired power plants,” Doukas said.

How the Centre’s Fuel Subsidy Policy has Short-changed Bihar

Throughout the previous decade, Bihar has consistently been the lowest per capita recipient of fuel subsidy transfers amongst all states and Union Territories.

The more diesel, LPG and kerosene a state consumes, the greater the Centre’s fuel subsidy to it. Because they consume less energy than people in richer states like Haryana, Gujarat or Delhi, Bihar’s people are effectively bearing a disproportionate share of the burden of subsidising richer Indians for their energy consumption. Credit: Meena Kadri/Flickr

Despite significant social and economic progress in recent years, the development challenges facing Bihar remain profound. The state, one of the poorest and most populous in the Indian Union, goes to the polls for State Assembly elections in October 2015. Among the issues currently under debate is the granting by the central government of ‘special category status’ to Bihar – a longstanding demand of state politicians across party lines, based partly on a sense of historical discrimination against the state within central government funding allocations.

A key issue frequently unrecognised in these discussions on the fiscal relationship between the central government and poorer states is the inequality between states in the distribution of (centrally-financed) fuel subsidies. In the past decade, fuel subsidies have collectively represented the single largest social transfer administered and funded by the central government. At the national level, the highly regressive social distribution of fuel subsidies, and in particular of diesel and liquefied petroleum gas (LPG) subsidies, is well-documented. Less widely understood is the structural discrimination between states inherent in both current and previous fuel subsidy policies, with consumers and businesses in India’s poorest states receiving a disproportionately low share of total subsidy expenditure.

Throughout the previous decade, Bihar has consistently been the lowest per capita recipient of fuel subsidy transfers amongst all states and Union Territories. Figure 1 below shows total per capita subsidy expenditure, calculated on the basis of per capita consumption of subsidized products, for the 20 largest states and Union Territories in FY 2013-14 (the most recent year for which state-level consumption data is currently available), highlighting the scale of the disparity between states in the receipt of subsidy transfers.

In 2013-14, Bihar received an average per capita transfer of Rs 602 per person. By comparison, Haryana received Rs. 2,556 per capita, Delhi received Rs. 1,967, Punjab received Rs. 1,912, and some smaller states and Union Territories received even more (for example Goa received Rs. 2,903 per person).

In 2013/14, Bihar was the lowest per capita recipient of subsidy transfers for diesel, receiving less than 10% (Rs. 175 per capita) of the equivalent transfer received in Haryana (Rs. 1,770 per capita), the highest among major states (see Figure 2 below).

Bihar was also the second lowest recipient of subsidy transfers for LPG in FY 2013-14 (marginally exceeding only Jharkhand, and having previously been the lowest per capita recipient in FY 2012-13), receiving a per capita average of Rs. 170 (see Figure 3 below). This represented approximately one-eighth of the equivalent transfer in Delhi, which received Rs. 1,340 per person.

Despite being the poorest Indian state, and among the states with the lowest level of access to electricity and LPG, Bihar’s allocation of subsidized kerosene (the one subsidized product whose distribution is directly determined by the central government) was roughly equivalent to the all-India average at Rs. 257 per capita, with several wealthier states – most prominently Gujarat, at Rs. 371 per person – receiving far higher per capita subsidy allocations (see Figure 4 below).

The cumulative effect of these distortions in subsidy expenditure (which are a direct result of central government decisions regarding the design and implementation of fuel subsidies) is massive, resulting in huge disparities in multi-year resource transfers. For example, in the three most recent years for which state-level consumption data is currently available (FY 2011-12 to FY 2013-14), the central government and associated public-sector enterprises spent a total of Rs 447,771 crore (US $73.6bn) subsidizing diesel, LPG and kerosene – over four times the equivalent central budget allocation to the flagship National Rural Employment Generation Scheme (NREGS) public employment programme. During this period, Bihar consistently received the lowest per capita transfer of all states (at between Rs. 525-625 per person). Table 1 and Figure 5 below show the total per capita subsidy received in Bihar relative to selected states and UTs from FY 2011-12 to FY 2013-14.

Table 2 shows the approximate per capita difference between the subsidy received in selected states and that received in Bihar for the three years to March 2014, and the total transfer required (on an annual basis) for Bihar to receive the same per capita transfer as that received in the selected states.

Table 3 then calculates the total transfer required to equalize the transfer received in Bihar and that received in selected states for the three years to March 2014 (without accounting for inflation), and the per capita transfer that this would represent (using 2014-15 population estimates).

This shows that were Bihar to receive a subsidy transfer equivalent to that received in Haryana for the three years to March 2014 alone, this would require an additional (compensatory) transfer of Rs. 74,008 crore, or Rs 6,859 for every person in Bihar. To achieve parity with Delhi would require a transfer of Rs. 42,087 crore, or Rs 3,900 per person, and to achieve parity with Gujarat would require a transfer of Rs. 28,371 crore, or Rs 2,629 per person.

The author is with the International Institute for Sustainable Development (IISD)

Despite Risks, Africa is Looking to Nuclear Energy with Russia and China’s Help

The challenges and concerns facing nuclear power development are huge but expect Africa’s powerhouses from Egypt to Nigeria to reach operational levels eventually.

Panoramic Open pit of the Rio Tinto Rössing uranium mine, Namibia. Credit: jbdodane/Flickr CC BY-NC 2.0

Many African countries are in the grip of a nuclear fad. They believe nuclear energy will bring with it an international currency of prestige. Countries with nuclear energy programs are seen as rich and technologically advanced and as a result possess advanced status compared to other developing countries.

Nuclear is not new to Africa. It has been active since the 1950s when the Democratic Republic of Congo built Africa’s first nuclear reactor. But now, more African countries are planning to develop atomic power for energy security.

There are 12 nuclear research reactors hosted in eight African countries. South Africa is the only African country with an operational nuclear power plant. But the list of countries seeking nuclear energy is long. Sub-Saharan countries of Ghana, Niger, Uganda and others have expressed interest in building nuclear plants. North African countries Algeria, Morocco and Tunisia have similar plans.

Why nuclear?

Africa’s future economic growth is dependent on numerous key factors: political stability, human security, education, and electricity. The good news is that Africa has energy options ranging from the widely criticised coal to the more favourable natural gas, geothermal energy and renewables. Many African countries are taking a diversified approach with nuclear playing a significant role.

Africa’s regional heavyweights Kenya, Nigeria and South Africa lead the way on the continent. These countries have developed long-term plans to propel economic growth. Even fossil-fuel-rich countries like Nigeria seek long-term power reliability and stability due to an ever-fluctuating oil price.

An integrated nuclear infrastructure review team from the International Atomic Energy Agency (IAEA) will soon complete their 2015 tours of Kenya, Morocco and Nigeria to identify problems and make recommendations as these countries advance the nuclear option.

Risks associated with nuclear

Many experts are asking if Africa is ready for nuclear energy in the face of mounting ethical, monetary, safety and security concerns. The main concerns include corruption, radiation events like the Fukushima disaster, high costs, lack of expertise and waste management.

One of the first steps to nuclear energy is gaining access to uranium. Africa is not short on supply. It contributes nearly 20% of world uranium production; 34 African countries that have uranium deposits. Most is mined in South Africa, Malawi, Namibia and Niger.

There is a real security threat posed by extremist organisations gaining access to nuclear material. The IAEA’s incident and trafficking database provides information on incidents involving nuclear and other radioactive material.

From January 1993 to December 2013, 2477 incidents were reported in the incident and trafficking database, of which 424 involved unauthorised possession and related criminal activities. The main concern is extremist organisations targeting corrupt politicians or experts knowledgeable in enrichment to attack or sabotage nuclear facilities.

We learnt of al-Qaeda’s plan to source nuclear material and recruit rogue scientists to build “dirty bombs” via American cables from WikiLeaks. Today, co-operation between extremist organisations exacerbates this threat. The 2013 joint attack of the French-owned Somair uranium mine in Niger is one example.

There is also the problem of the legacy of Pakistani scientist Abdul Qadeer Khan’s global nuclear proliferation network. Now a free citizen of Pakistan, Khan at one time was at the centre of the global nuclear black market.

He had connections in South Africa. He also agreed to provide Libya with nearly all of the infrastructure and expertise necessary to build a nuclear bomb. Khan is an example of the damage one man can inflict and how fast and wide a proliferation network can spread.

The US, through several offices and supporting multilateral organisations, seeks to minimise the threat. And the Global Initiative to Combat Nuclear Terrorism, co-chaired by Russia and the US, is a partnership of 86 nations following core principles around nuclear terrorism deterrence, prevention, detection, and response objectives.

To date, Algeria, Cote d’Ivoire, Libya, Madagascar, Morocco, Seychelles and Zambia have partnered with the organisation.

The US has a premier program for strategic trade control of nuclear activities. It held a workshop in Kenya in August on trade management legislation, dual-use technology, and conventional weapons. The nuclear security challenges are clear and Africa has a role to play.

The big players leading Africa’s quest

Koeberg Nuclear Power Station, South Africa. Credit: Mark Holtzhausen/Flickr CC BY NC-ND 2.0

African nuclear expertise is limited so they are looking abroad to achieve their nuclear ambitions. This includes the Western powers like France and the US. But China and Russia and their closely affiliated non-state and state-owned nuclear energy providers are the biggest players in Africa.

Russia’s nuclear involvement in Africa is not new and is rapidly expanding. President Vladimir Putin appears to be the frontrunner in South Africa’s nuclear expansion. It was announced that Russia will build Egypt’s nuclear power plant in Dabaa after Putin’s visit to Cairo in February 2015. Russia’s state energy corporation Rosatom also recently signed a deal with Nigeria to build a nuclear plant that will be operational in 2025.

China’s overall expansion into Africa over the past decade is nothing short of remarkable. China has used this momentum to make inroads into the nuclear sphere. Most recently, China and Kenya signed a deal on the construction of the first nuclear power plant in the east African nation to be operational by 2025. At the same time, China General Nuclear Power Holding Corp will begin mining for uranium at its Husab mine in February in western-central Na mibia.

China and Russia’s interest is linked to the projection of strategic power and investment into Africa, but also to secure access to uranium reserves. Together, China and Russia are leading the drive for global energy security. At the same time they are solidifying their overall political and trade relationships with African countries and their leaders.

Despite the challenges and concerns facing nuclear power development, expect Africa’s powerhouses from Egypt to Nigeria to reach operational levels.

Scott Firsing, Research Fellow, International Relations, Monash University

This article was originally published on The Conversation. Read the original article.

After an Ugly Battle, G77+China Win the Day on First Day of UN Climate Talks

South Africa stunned the UN climate change negotiations by saying the two co-chairs and some developed countries’ attitude to developing countries was akin to apartheid.

©UNEP

South Africa, speaking for 134 developing countries under the G77+China group, stunned the UN climate change negotiations on the first day of the talks at Bonn, Germany, by saying that the two co-chairs and some developed countries’ attitude to developing countries was akin to apartheid.

The blunt attack, rare in international diplomacy and UN multilateral negotiations, was pointed particularly towards the co-chair from US, Daniel Reifsnyder. It came after all developing country groups criticised the co-chairs for producing a draft Paris agreement which favoured select developed countries and then refusing to bring balance to the text.

The battle between developing countries and the co-chair turned acrimonious, stretching over more than couple of hours before the two co-chairs gave in to the demands of the G77+China countries. They accepted the proposal from Malaysia that all countries should be allowed to reinsert their proposals in the text without debate and arguments from others. It was finally decided that only once the draft agreement had been reworked with insertions of proposals from all aggrieved countries that the way to negotiate out the differences over next four days would be figured out by the heads of delegations from 196 countries gathered at Bonn.

The heated arguments were somewhat expected with all the groups under the G77+China block of countries having concluded over the weekend that the co-chairs’ draft was heavily tilted to favour developed world – primarily the US.

This included the Association of Small Island Countries, the Least Developed Countries and the Small Island Developing States besides Like Minded Developing Countries (LMDC) and Africa Group. By Monday morning the civil society and environmental groups gathered at Bonn from North and South had almost unanimously concluded the same with their press conferences, tweets and statements referring to the co-chairs’ draft Paris agreement as “#UStext”.

But, the opening session on Monday turned bitter as the co-chairs stuck to their guns. They, along with the US and EU preferred that developing countries first discuss their concerns in an open-ended oral argument and then it be decided which ones would be taken on board. Developing countries said it would delay actual negotiations and was a stalling process. South Africa responded with anger after the co-chairs refused to yield to 134 countries’ collective demand. They said the G77 was being asked to justify additions to ADP draft (draft Paris agreement), which is like in the apartheid struggle where oppressed had to justify why they were equal and had the right to vote.

Speaking for the G77+China group, it told the two co-chairs, “Seems you are arguing with us and negotiating with us rather than facilitating.”

AOSIS joined the argument saying, “Injustice has been done to members of my constituency by the co-chairs text. This injustice cannot be unanswered.”

Malaysia said, “You can’t have a two-wheel bicycle with one wheel removed and then wonder why it can’t move. The draft is unbalanced and excludes concerns of many.” The co-chairs asking for developing countries to justify their point of view before they are accepted, Malaysia said, was like the co-chairs trying to make a judgement call.

Speaking to Business Standard from Bonn, a senior negotiator from the LMDC group, of which India and China are prominent members, said, “The analogy I would give is: you push someone off the boat and while she struggles in the sea ask her to justify why she should be allowed back in. This is what the co-chairs and some developed countries wanted a. The argument was not over process, it was about all countries having equal rights at the UN negotiations.”

Another negotiator from the LMDC explained the developing country perspective: “The co-chairs were to summarise all countries’ positions. They had to note where there was consensus and where it didn’t exist. Parties (countries) were to then negotiate further at Bonn bridging the differences. Instead, they gave us a document in which the co-chairs decided what the compromises would be and these were mostly compromises that developing countries were told to accept.”

Meena Raman from Third World Network, an observer group at the Bonn talks, said, “Developing world (all 134 countries as one) was speaking in a united voice had to justify why their views had to be included. This was unacceptable. Developed countries wanted evaluation of developing country proposals while theirs have been put on the table by the co-chairs. The co-chairs were acting partisan.”

By the time of going to press, the two co-chairs had finally given in to the demands of the developing countries. They announced that countries would be allowed to submit their proposals for insertion in the draft agreement. These proposals would then be inserted live before all countries without any discussion or argument. Once this process was over, the heads of delegations would sit with the co-chairs to decide how the negotiations would then occur over this redrafted Paris agreement. The negotiators were to gather at 4 pm Bonn time to see their proposals being reinserted.

This article was originally published on Business Standard.