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US President Barack Obama’s recent trip to India was full of atmospherics. The nuclear deal is being hailed as the one substantive accomplishment. It certainly is a step forward especially since the Bharatiya Janata Party (BJP) had opposed the Bush-Singh nuclear accord. But whether the insurance pool created by the four public sector insurance companies with a matching contribution by the Union government and a legal opinion of the attorney general to reinterpret the nuclear liability legislation passed by Parliament in September 2010 (“The Civil Liability for Nuclear Damage Act, 2010") will break the stalemate remains to be seen.

Ironically, it was the BJP that had insisted on some provisions that it now finds “cumbersome" for suppliers. The reinterpretation is to give “comfort" to US companies that liability in case of accidents will not only be capped, but also be confined just to the operator of the plant and not extend to the suppliers as well—as provided for in the 2010 law. India had signed on to the 1997 international Convention on Supplementary Compensation for Nuclear Damage (CSC) in October 2010 itself and has held firm to the view that its domestic nuclear liability law is in conformity with it. But the US has been insisting that our law has to be changed to bring it in line with its interpretation of the CSC. India still needs a formal decision by the Union cabinet to ratify and deposit the instrument of ratification with the International Atomic Energy Agency (IAEA). This should now get done irrespective of what the US says.

Although the US has not commissioned a nuclear reactor for well over three-and-a-half decades, two American companies GE and Westinghouse (with their Japanese partners Hitachi and Toshiba, respectively) have plans for setting up nuclear power plants—GE in Andhra Pradesh and Westinghouse in Gujarat. Their initial reaction has naturally been cautious and circumspect since the finer details of the deal have not yet been made public. But even assuming that their reaction later is that the liability issue has been settled to their satisfaction, there is no cause for great celebration. In fact, it is then that hard-nosed negotiations will actually begin and these could drag on for quite some time on cost and regulatory issues as well.

Even though environmental clearance was granted in November 2010 with tough compliance conditions, negotiations with French company Areva for the supply of six 1,650 megawatt (MW) reactors have been going on for over four-and-a-half years. Capital costs (and thereby cost of power generated) have proved to be a hugely contentious issue. There is no reason to believe that negotiations with the American companies will be any different. India certainly needs to increase its nuclear power generating capacity substantially since nuclear power plants emit no greenhouse gases such as carbon dioxide that cause global warming or gases like sulphur dioxide and nitrous oxide that have a deleterious effect on human health. But whether imports of reactors from France, Russia and the US are indeed the most cost-effective way to increase such capacity is a question that needs to be addressed seriously especially since the country is installing standardized 700MW heavy-water reactors that have been designed and developed indigenously. The capital costs of the French, American and Russian reactors could end up being at least three-four times those of the indigenously developed reactors. There has also been vociferous local opposition to the location of these plants at Jaitapur in Maharashtra in the case of Areva, Mithi Virdi in Gujarat in the case of Westinghouse, and Kovvada in Andhra Pradesh in the case of GE. These agitations have to be understood and dealt with as part of the democratic process and not be painted as being “anti-national" and instigated by forces inimical to India’s development.

On climate, too, there is exultation that India has been let off quite lightly and that it has not had to sign a bilateral agreement like the Chinese did when President Obama was in Beijing last December. But has it? In his “town hall" speech just before leaving, President Obama had this to say: “I know the argument made by some that it’s unfair for countries like the United States to ask developing nations and emerging economies like India to reduce your dependence on the same fossil fuels that helped power our growth for more than a century. But here’s the truth: Even if countries like the United States curb our emissions, if countries that are growing rapidly like India—with soaring energy needs—don’t also embrace cleaner fuels, then we don’t stand a chance against climate change." What he said was that while India has not contributed to the “stock" of emissions, it is a major contributor to the “flow".

President Obama certainly did not demand for our emissions to peak, which the Chinese have pledged. He knows that China’s emissions, the highest in the world, are over four times those of India and that the two cannot really be equated. But this does not mean that India can get away lightly. India is key to arriving at a global climate agreement in Paris later this year in December. Paris will certainly not meet all environmental expectations but will at least provide a springboard to move to a low-carbon growth path. Countries are not being imposed “top-down" targets or commitments but are submitting “contributions" based on their “national circumstances". But having done so, if countries do not agree to an international system of monitoring, reporting and verification even if it be non-punitive, then there is really no meaningful outcome from Paris. And it is here that India has been playing its usual negative role with great skill. President Obama’s parting remarks indicate that the international community is looking to India eagerly to unveil its detailed roadmap for low-carbon growth that goes well beyond announcing ambitious targets for solar and wind energy.

The author is a former Union minister and Rajya Sabha MP.

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