Monthly Archives: February 2017

The nuclear fallout from ‘Brexatom’: threat, opportunity, or plain bonkers?

UK cancer patients may no longer be able to receive radiotherapy after Brexit, according to today’s Financial Times.

Or at least, to be able to import the crucial Molybdenum 99 isotope used for 80% of radiation treatments, the UK will have to negotiate new arrangements to replace EURATOM, the treaty that underpins nuclear regulation and cooperation across Europe.

The potential risk to cancer sufferers is just one small piece of the fallout from the UK’s decision to leave EURATOM as part of the Brexit process to leave the European Union.

The surprise decision was announced in a footnote to the Parliamentary Bill published on 26th January to authorise Brexit. Up until that point this was a grey area with disagreements over whether Brexit meant the UK would also have to leave EURATOM.

The balance of opinion seemed to confirm that, although EURATOM is legally distinct from the European Union, the UK would have leave both once Article 50 was triggered. (I wrote about this in November 2016 in Nuclear News No. 89.)

This was confirmed at a meeting I attended at the Scottish Government last September when most of the nuclear industry representatives and regulators appeared to be resigned to leaving EURATOM.

On the other hand, the European nuclear lobby group – Foratomthought the UK could decide to negotiate to remain a member (or agree some form of associate membership). The EU has numerous association agreements with other countries. For instance Switzerland is an associate member of EURATOM and the Ukraine has joined the EURATOM Research and Training Programme.

A blog on the Euractiv website goes even further saying that the idea that EURATOM is included in the exit clause of the Lisbon Treaties is false. [2]

The decision has wide-ranging implications for Britain’s nuclear industry, research, access to fissile materials and the status of approximately 20 nuclear co-operation agreements that it has with other countries around the world.

The UK is going to have to strike new international agreements with all these countries to maintain access to nuclear power technology – crucially with the US because several of the UK’s existing and planned nuclear reactors use US technology or fuel.

A new bilateral agreement will also be needed with the International Atomic Energy Agency. Nuclear co-operation agreements can take considerable time to agree and ratify. It may not be possible to complete them before Britain leaves the EU in 2019.

New reactors in jeopardy?

The concern now in the UK nuclear industry is that leaving EURATOM will complicate and delay the UK’s plans to build a new generation of nuclear power stations.

“The new wave of British nuclear power stations was in jeopardy” said the Times. Withdrawal could cause “major disruption” according to the Nuclear Industry Association (NIA) particularly for Horizon and Nugen, which are developing plans for reactors on Anglesey and in Cumbria because their plans involve co-operation with US nuclear companies.

Former Labour MP Tom Greatrex, now chief executive of the NIA, said: “The UK nuclear industry has made it crystal clear to the government before and since the referendum that our preferred position is to maintain membership of EURATOM.” [3] Although Horizon, whose reactors would use US nuclear fuel, says it is reassured by the government’s commitment to put new regulatory arrangements in place quickly. [4]

The Hinkley Point C station in Somerset could also face renewed problems. EDF has warned that Brexit could increase “the costs of essential new infrastructure developments and could delay their delivery”. EDF, which also operates Britain’s existing nuclear plants, has said it would prefer if the UK stayed within EURATOM and that if not it would be “essential that the UK establishes equivalent safeguards arrangements”.

However, if the UK ceases to be part of EURATOM, then it is vital the government agree transitional arrangements, to give the UK time to negotiate and complete new agreements with EU member states and third countries including the US, Japan and Canada who have nuclear co-operation agreements within the EURATOM framework.”

EDF is also worried that Brexit will affect the movement of people and delay the delivery of Hinkley Point C [5]. It could also impact upon its costs. For the reactor builders, being outside the nuclear common market as well as the single market and having no freedom of movement may lead to higher prices if tariffs and customs checks are introduced or if restrictions are imposed on foreign nuclear scientists and engineers. [6]

Nuclear safeguards – the implications

Leaving EURATOM is also likely to add to the workload of the UK’s nuclear regulator, the Office for Nuclear Regulation (ONR), which is busy assessing designs for new nuclear reactors including the Chinese Hualong One design.

And as nuclear engineering consultant John Large points out, “The main burden of the UK leaving EURATOM will be the need for it to cover its nuclear non-proliferation safeguards commitment and for this it will have to either set up a separate, independent agency or bring these treaty responsibilities into the Office for Nuclear Regulation.”

The Green Party’s only UK MP Caroline Lucas raised the safeguards issue in Parliament last August when she asked the business and energy secretary “what steps would be needed to replace EU Atomic Energy Community safeguards inspectors with International Atomic Energy Agency (IAEA) Inspectors to implement safeguards provisions.”

The reply did not address the fact that currently international inspections of UK nuclear plants and materials to ensure there is no diversion of materials to military misuse is verified by EURATOM on behalf of the IAEA. [7]

A quarter of all time spent on nuclear inspections throughout the EU is carried out in Britain, due to the scale of nuclear fuel fabrication and waste management facilities, such as Sellafield. Without EURATOM ONR will need to undertake many more inspections to meet IAEA requirements.

The Government will have to find extra cash, but it will also struggle to hire and train the necessary new staff especially when ONR is already struggling to keep up with the assessment of several new reactors designs (EPR, AP1000, ABWR and Hualong One). [8]

As proliferation expert Dr David Lowry puts it: “It is now time energy and foreign ministers and their advisors turn their attention to what they are going to do to ensure nuclear safeguards continuity in the UK post Brexit to avoid the UK becoming a nuclear rogue state.” [9]

Fusion – nuclear research scientists angry

Membership of EURATOM is also a condition for Britain hosting what is currently the largest nuclear fusion experiment in the world. Based at the Culham centre in south Oxfordshire, the Joint European Torus project involves some 350 scientists exploring the potential of fusion power, backed by funding from almost 40 countries in the EUROfusion consortium.

According to Nature, scientists are shocked and angry about the EURATOM exit. Depending on whether and how the UK negotiates a way back in to the organization, the move could endanger British participation in the world’s largest fusion experiment, the International Thermonuclear Experimental Reactor (ITER) in southern France.

It could also curtail operations at the Joint European Torus (JET), a nuclear-fusion facility in Culham. The facility is a half-sized version of ITER which currently receives around €56 million annually from EURATOM. Steven Cowley, a theoretical physicist at the University of Oxford who until last year was director of the Culham Centre described the decision to leave EURATOM as “bonkers”. [10]

According to the Trade Union representing nuclear scientists, the Culham Centre signed a €283m contract in 2014 for running the Joint European Torus facility until 2018, with similar contracts expected in the future.

This sum accounts for more than a quarter of the overall European Fusion Programme budget over the same period – a budget funded in part by the EURATOM Horizon 2020 programme. The UKAEA also brings EURATOM money directly to the region and UK industry by winning ITER (global fusion project) contracts. [11]

Wider impact in Europe

The political impact in the EU remains equally unclear. Britain has been one of Europe’s most active supporters of nuclear power. Brexit could tip the balance of member states towards an anti-nuclear majority.

And what then? Just as the International Whaling Commission has become an essentially anti-whaling UN agency, might EURATOM states seek to use the treaty to block, not support, the construction of new nuclear power stations in Europe. Its main role would then be to supervise the sector’s long term decline.

The complications around the UK withdrawal from EURATOM could also put a spotlight onto the EURATOM Treaty itself, whose legal status and many of its functions are out of step with the modern EU and may once again lead to calls for it to be abolished. [12]

EURATOM Mark II?

The UK secretary of state for exiting the European Union, David Davis, told parliament on 31 January 2017 that the UK will seek an alternative agreement with the International Atomic Energy Agency (IAEA) if it fails to negotiate “some sort of relationship” with the European Atomic Energy Community (EURATOM) during Brexit negotiations. [13]

The idea of a new pan-European nuclear group is also being floated, according to former conservative MP Tim Yeo who chairs the trade group New Nuclear Watch Europe.

The successor group is envisaged as a wider Europe-based pro-nuclear club including the 27 European Union member states as well as countries outside the bloc that are also developing new nuclear power plants. As well as the UK the group could include Turkey, Ukraine, Belarus and potentially Russia. [14]

Time for reform – or abolition

The UK nuclear establishment is going to have its work cut out to make sure that Brexatom does not add to the delays in its proposed new nuclear reactor programme already in prospect as a result of financial problems at EDF, Areva, Toshiba, Engie and Hitachi.

There will be widespread support for efforts to avoid any hiatus in the safeguarding of the huge quantity of fissile material in the UK. But as Hans-Josef Fell, president of the Energy Watch Group and a former member of the German parliament for the Greens points out the UK’s exit from EURATOM should be seen as an opportunity.

It’s a clear sign that it is possible for anti-nuclear countries like Austria, Ireland and Germany to unilaterally leave the Treaty – even a unique chance to dissolve Euratom. He says the core task of EURATOM is to support the nuclear industry. After Chernobyl and Fukushima ending that support is long overdue. [15]

The UK Nuclear Free Local Authorities (NFLA) recently pointed out that it sees “the EURATOM Treaty as one of the most direct ways the nuclear industry has promoted nuclear power in Europe over the past 60 years. It has often been the inside track from which pro-nuclear governments have ensured support for nuclear power within the European Commission.” [16]

For instance, in 2014 the European Union’s Competition Commissioner Margrethe Vestager had less leeway in evaluating the UK’s Hinkley Point C financial support scheme than it would have done for a non-nuclear project because of the EURATOM Treaty, which is meant to support and encourage investment in nuclear projects where needed.

“This means that if member states choose to invest in nuclear energy, the EURATOM’s objective to facilitate that investment becomes an objective of common interest that the Commission should take into account in its state aid assessment”, she said. [17]

So the Commission approved the UK Government’s plans to subsidise Hinkley Point C despite the fact that even the UK government itself expects solar and wind power to be cheaper than new nuclear power by the time Hinkley Point C is completed. [18]

Not surprising then that the NFLA sees this as “an ideal time for a major and all encompassing reform of the EURATOM Treaty to take account of the changed energy market in the EU, where renewable energy is rapidly expanding and nuclear power is in decline.” [19]

 


 

Pete Roche is editor of the No2NuclearPower website which produces a free daily nuclear news service.

Sign up to receive No2NuclearPower Bulletin by e-mail here.

This article was originally published in Nuclear Monitor #838 and is reproduced here by kind permission of the author. This version includes some updates by The Ecologist.

References

  1. FT 26th January 2017 https://www.ft.com/content/fe3b50a4-e3e1-11e6-8405-9e5580d6e5fb

  2. Euractiv 16th June 2016 http://democracy.blogactiv.eu/2016/06/16/euratom-after-brexit-votes-uk-will-remain-a-community-member-for-nuclear-non-proliferation/

  3. The Times 27th Jan 2017 http://www.thetimes.co.uk/edition/business/britain-quits-european-nuclear-body-pgmq9m9fc

  4. FT 26th January 2017 https://www.ft.com/content/fe3b50a4-e3e1-11e6-8405-9e5580d6e5fb

  5. Guardian 27th Jan 2017 https://www.theguardian.com/business/2017/jan/27/uk-exit-eu-atomic-treaty-brexit-euratom-hinkley-point-c

  6. Antony Froggatt in The Conversation 30th Jan 2017 http://theconversation.com/brexatom-the-uk-will-now-leave-europes-nuclear-energy-authority-72136

  7. David Lowry’s Blog 27th Jan 2017 http://drdavidlowry.blogspot.co.uk/2017/01/how-brexit-britain-could-become.html

  8. Antony Froggatt in The Conversation 30th Jan 2017 http://theconversation.com/brexatom-the-uk-will-now-leave-europes-nuclear-energy-authority-72136

  9. David Lowry’s Blog 27th Jan 2017 http://drdavidlowry.blogspot.co.uk/2017/01/how-brexit-britain-could-become.html

  10. Nature 27th Jan 2017 http://www.nature.com/news/researchers-shocked-at-uk-s-plan-to-exit-eu-nuclear-agency-1.21388

  11. FT 5th Feb 2017 https://www.ft.com/content/d3d780bc-e7b5-11e6-893c-082c54a7f539

  12. Antony Froggatt in The Conversation 30th Jan 2017 http://theconversation.com/brexatom-the-uk-will-now-leave-europes-nuclear-energy-authority-72136

  13. Nucnet 2nd Feb 2017 http://www.nucnet.org/all-the-news/2017/02/02/uk-could-seek-alternative-agreement-to-euratom-with-iaea-after-bexit

  14. Telegraph 4th February 2017 http://www.telegraph.co.uk/business/2017/02/04/britain-proposing-wider-europe-based-pro-nuclear-club-article/

  15. Energy Post 5th July 2016 http://energypost.eu/brexit-offers-chance-finally-put-end-euratom-treaty/

  16. NFLA Press Release 30th Jan 2017 http://www.nuclearpolicy.info/news/nfla-uk-decision-withdraw-euratom-could-halt-new-nuclear/

  17. Politico 11th January 2017 http://www.politico.eu/article/hungary-nuclear-approval-expected-thanks-to-uk-and-france-precedent/

  18. Guardian 11th August 2016 https://www.theguardian.com/environment/2016/aug/11/solar-and-windcheaper-than-new-nuclear-by-the-time-hinkley-is-built

  19. NFLA Press Release 30th Jan 2017 http://www.nuclearpolicy.info/news/nfla-uk-decision-withdraw-euratom-could-halt-new-nuclear/

 

The nuclear fallout from ‘Brexatom’: threat, opportunity, or plain bonkers?

UK cancer patients may no longer be able to receive radiotherapy after Brexit, according to today’s Financial Times.

Or at least, to be able to import the crucial Molybdenum 99 isotope used for 80% of radiation treatments, the UK will have to negotiate new arrangements to replace EURATOM, the treaty that underpins nuclear regulation and cooperation across Europe.

The potential risk to cancer sufferers is just one small piece of the fallout from the UK’s decision to leave EURATOM as part of the Brexit process to leave the European Union.

The surprise decision was announced in a footnote to the Parliamentary Bill published on 26th January to authorise Brexit. Up until that point this was a grey area with disagreements over whether Brexit meant the UK would also have to leave EURATOM.

The balance of opinion seemed to confirm that, although EURATOM is legally distinct from the European Union, the UK would have leave both once Article 50 was triggered. (I wrote about this in November 2016 in Nuclear News No. 89.)

This was confirmed at a meeting I attended at the Scottish Government last September when most of the nuclear industry representatives and regulators appeared to be resigned to leaving EURATOM.

On the other hand, the European nuclear lobby group – Foratomthought the UK could decide to negotiate to remain a member (or agree some form of associate membership). The EU has numerous association agreements with other countries. For instance Switzerland is an associate member of EURATOM and the Ukraine has joined the EURATOM Research and Training Programme.

A blog on the Euractiv website goes even further saying that the idea that EURATOM is included in the exit clause of the Lisbon Treaties is false. [2]

The decision has wide-ranging implications for Britain’s nuclear industry, research, access to fissile materials and the status of approximately 20 nuclear co-operation agreements that it has with other countries around the world.

The UK is going to have to strike new international agreements with all these countries to maintain access to nuclear power technology – crucially with the US because several of the UK’s existing and planned nuclear reactors use US technology or fuel.

A new bilateral agreement will also be needed with the International Atomic Energy Agency. Nuclear co-operation agreements can take considerable time to agree and ratify. It may not be possible to complete them before Britain leaves the EU in 2019.

New reactors in jeopardy?

The concern now in the UK nuclear industry is that leaving EURATOM will complicate and delay the UK’s plans to build a new generation of nuclear power stations.

“The new wave of British nuclear power stations was in jeopardy” said the Times. Withdrawal could cause “major disruption” according to the Nuclear Industry Association (NIA) particularly for Horizon and Nugen, which are developing plans for reactors on Anglesey and in Cumbria because their plans involve co-operation with US nuclear companies.

Former Labour MP Tom Greatrex, now chief executive of the NIA, said: “The UK nuclear industry has made it crystal clear to the government before and since the referendum that our preferred position is to maintain membership of EURATOM.” [3] Although Horizon, whose reactors would use US nuclear fuel, says it is reassured by the government’s commitment to put new regulatory arrangements in place quickly. [4]

The Hinkley Point C station in Somerset could also face renewed problems. EDF has warned that Brexit could increase “the costs of essential new infrastructure developments and could delay their delivery”. EDF, which also operates Britain’s existing nuclear plants, has said it would prefer if the UK stayed within EURATOM and that if not it would be “essential that the UK establishes equivalent safeguards arrangements”.

However, if the UK ceases to be part of EURATOM, then it is vital the government agree transitional arrangements, to give the UK time to negotiate and complete new agreements with EU member states and third countries including the US, Japan and Canada who have nuclear co-operation agreements within the EURATOM framework.”

EDF is also worried that Brexit will affect the movement of people and delay the delivery of Hinkley Point C [5]. It could also impact upon its costs. For the reactor builders, being outside the nuclear common market as well as the single market and having no freedom of movement may lead to higher prices if tariffs and customs checks are introduced or if restrictions are imposed on foreign nuclear scientists and engineers. [6]

Nuclear safeguards – the implications

Leaving EURATOM is also likely to add to the workload of the UK’s nuclear regulator, the Office for Nuclear Regulation (ONR), which is busy assessing designs for new nuclear reactors including the Chinese Hualong One design.

And as nuclear engineering consultant John Large points out, “The main burden of the UK leaving EURATOM will be the need for it to cover its nuclear non-proliferation safeguards commitment and for this it will have to either set up a separate, independent agency or bring these treaty responsibilities into the Office for Nuclear Regulation.”

The Green Party’s only UK MP Caroline Lucas raised the safeguards issue in Parliament last August when she asked the business and energy secretary “what steps would be needed to replace EU Atomic Energy Community safeguards inspectors with International Atomic Energy Agency (IAEA) Inspectors to implement safeguards provisions.”

The reply did not address the fact that currently international inspections of UK nuclear plants and materials to ensure there is no diversion of materials to military misuse is verified by EURATOM on behalf of the IAEA. [7]

A quarter of all time spent on nuclear inspections throughout the EU is carried out in Britain, due to the scale of nuclear fuel fabrication and waste management facilities, such as Sellafield. Without EURATOM ONR will need to undertake many more inspections to meet IAEA requirements.

The Government will have to find extra cash, but it will also struggle to hire and train the necessary new staff especially when ONR is already struggling to keep up with the assessment of several new reactors designs (EPR, AP1000, ABWR and Hualong One). [8]

As proliferation expert Dr David Lowry puts it: “It is now time energy and foreign ministers and their advisors turn their attention to what they are going to do to ensure nuclear safeguards continuity in the UK post Brexit to avoid the UK becoming a nuclear rogue state.” [9]

Fusion – nuclear research scientists angry

Membership of EURATOM is also a condition for Britain hosting what is currently the largest nuclear fusion experiment in the world. Based at the Culham centre in south Oxfordshire, the Joint European Torus project involves some 350 scientists exploring the potential of fusion power, backed by funding from almost 40 countries in the EUROfusion consortium.

According to Nature, scientists are shocked and angry about the EURATOM exit. Depending on whether and how the UK negotiates a way back in to the organization, the move could endanger British participation in the world’s largest fusion experiment, the International Thermonuclear Experimental Reactor (ITER) in southern France.

It could also curtail operations at the Joint European Torus (JET), a nuclear-fusion facility in Culham. The facility is a half-sized version of ITER which currently receives around €56 million annually from EURATOM. Steven Cowley, a theoretical physicist at the University of Oxford who until last year was director of the Culham Centre described the decision to leave EURATOM as “bonkers”. [10]

According to the Trade Union representing nuclear scientists, the Culham Centre signed a €283m contract in 2014 for running the Joint European Torus facility until 2018, with similar contracts expected in the future.

This sum accounts for more than a quarter of the overall European Fusion Programme budget over the same period – a budget funded in part by the EURATOM Horizon 2020 programme. The UKAEA also brings EURATOM money directly to the region and UK industry by winning ITER (global fusion project) contracts. [11]

Wider impact in Europe

The political impact in the EU remains equally unclear. Britain has been one of Europe’s most active supporters of nuclear power. Brexit could tip the balance of member states towards an anti-nuclear majority.

And what then? Just as the International Whaling Commission has become an essentially anti-whaling UN agency, might EURATOM states seek to use the treaty to block, not support, the construction of new nuclear power stations in Europe. Its main role would then be to supervise the sector’s long term decline.

The complications around the UK withdrawal from EURATOM could also put a spotlight onto the EURATOM Treaty itself, whose legal status and many of its functions are out of step with the modern EU and may once again lead to calls for it to be abolished. [12]

EURATOM Mark II?

The UK secretary of state for exiting the European Union, David Davis, told parliament on 31 January 2017 that the UK will seek an alternative agreement with the International Atomic Energy Agency (IAEA) if it fails to negotiate “some sort of relationship” with the European Atomic Energy Community (EURATOM) during Brexit negotiations. [13]

The idea of a new pan-European nuclear group is also being floated, according to former conservative MP Tim Yeo who chairs the trade group New Nuclear Watch Europe.

The successor group is envisaged as a wider Europe-based pro-nuclear club including the 27 European Union member states as well as countries outside the bloc that are also developing new nuclear power plants. As well as the UK the group could include Turkey, Ukraine, Belarus and potentially Russia. [14]

Time for reform – or abolition

The UK nuclear establishment is going to have its work cut out to make sure that Brexatom does not add to the delays in its proposed new nuclear reactor programme already in prospect as a result of financial problems at EDF, Areva, Toshiba, Engie and Hitachi.

There will be widespread support for efforts to avoid any hiatus in the safeguarding of the huge quantity of fissile material in the UK. But as Hans-Josef Fell, president of the Energy Watch Group and a former member of the German parliament for the Greens points out the UK’s exit from EURATOM should be seen as an opportunity.

It’s a clear sign that it is possible for anti-nuclear countries like Austria, Ireland and Germany to unilaterally leave the Treaty – even a unique chance to dissolve Euratom. He says the core task of EURATOM is to support the nuclear industry. After Chernobyl and Fukushima ending that support is long overdue. [15]

The UK Nuclear Free Local Authorities (NFLA) recently pointed out that it sees “the EURATOM Treaty as one of the most direct ways the nuclear industry has promoted nuclear power in Europe over the past 60 years. It has often been the inside track from which pro-nuclear governments have ensured support for nuclear power within the European Commission.” [16]

For instance, in 2014 the European Union’s Competition Commissioner Margrethe Vestager had less leeway in evaluating the UK’s Hinkley Point C financial support scheme than it would have done for a non-nuclear project because of the EURATOM Treaty, which is meant to support and encourage investment in nuclear projects where needed.

“This means that if member states choose to invest in nuclear energy, the EURATOM’s objective to facilitate that investment becomes an objective of common interest that the Commission should take into account in its state aid assessment”, she said. [17]

So the Commission approved the UK Government’s plans to subsidise Hinkley Point C despite the fact that even the UK government itself expects solar and wind power to be cheaper than new nuclear power by the time Hinkley Point C is completed. [18]

Not surprising then that the NFLA sees this as “an ideal time for a major and all encompassing reform of the EURATOM Treaty to take account of the changed energy market in the EU, where renewable energy is rapidly expanding and nuclear power is in decline.” [19]

 


 

Pete Roche is editor of the No2NuclearPower website which produces a free daily nuclear news service.

Sign up to receive No2NuclearPower Bulletin by e-mail here.

This article was originally published in Nuclear Monitor #838 and is reproduced here by kind permission of the author. This version includes some updates by The Ecologist.

References

  1. FT 26th January 2017 https://www.ft.com/content/fe3b50a4-e3e1-11e6-8405-9e5580d6e5fb

  2. Euractiv 16th June 2016 http://democracy.blogactiv.eu/2016/06/16/euratom-after-brexit-votes-uk-will-remain-a-community-member-for-nuclear-non-proliferation/

  3. The Times 27th Jan 2017 http://www.thetimes.co.uk/edition/business/britain-quits-european-nuclear-body-pgmq9m9fc

  4. FT 26th January 2017 https://www.ft.com/content/fe3b50a4-e3e1-11e6-8405-9e5580d6e5fb

  5. Guardian 27th Jan 2017 https://www.theguardian.com/business/2017/jan/27/uk-exit-eu-atomic-treaty-brexit-euratom-hinkley-point-c

  6. Antony Froggatt in The Conversation 30th Jan 2017 http://theconversation.com/brexatom-the-uk-will-now-leave-europes-nuclear-energy-authority-72136

  7. David Lowry’s Blog 27th Jan 2017 http://drdavidlowry.blogspot.co.uk/2017/01/how-brexit-britain-could-become.html

  8. Antony Froggatt in The Conversation 30th Jan 2017 http://theconversation.com/brexatom-the-uk-will-now-leave-europes-nuclear-energy-authority-72136

  9. David Lowry’s Blog 27th Jan 2017 http://drdavidlowry.blogspot.co.uk/2017/01/how-brexit-britain-could-become.html

  10. Nature 27th Jan 2017 http://www.nature.com/news/researchers-shocked-at-uk-s-plan-to-exit-eu-nuclear-agency-1.21388

  11. FT 5th Feb 2017 https://www.ft.com/content/d3d780bc-e7b5-11e6-893c-082c54a7f539

  12. Antony Froggatt in The Conversation 30th Jan 2017 http://theconversation.com/brexatom-the-uk-will-now-leave-europes-nuclear-energy-authority-72136

  13. Nucnet 2nd Feb 2017 http://www.nucnet.org/all-the-news/2017/02/02/uk-could-seek-alternative-agreement-to-euratom-with-iaea-after-bexit

  14. Telegraph 4th February 2017 http://www.telegraph.co.uk/business/2017/02/04/britain-proposing-wider-europe-based-pro-nuclear-club-article/

  15. Energy Post 5th July 2016 http://energypost.eu/brexit-offers-chance-finally-put-end-euratom-treaty/

  16. NFLA Press Release 30th Jan 2017 http://www.nuclearpolicy.info/news/nfla-uk-decision-withdraw-euratom-could-halt-new-nuclear/

  17. Politico 11th January 2017 http://www.politico.eu/article/hungary-nuclear-approval-expected-thanks-to-uk-and-france-precedent/

  18. Guardian 11th August 2016 https://www.theguardian.com/environment/2016/aug/11/solar-and-windcheaper-than-new-nuclear-by-the-time-hinkley-is-built

  19. NFLA Press Release 30th Jan 2017 http://www.nuclearpolicy.info/news/nfla-uk-decision-withdraw-euratom-could-halt-new-nuclear/

 

The nuclear fallout from ‘Brexatom’: threat, opportunity, or plain bonkers?

UK cancer patients may no longer be able to receive radiotherapy after Brexit, according to today’s Financial Times.

Or at least, to be able to import the crucial Molybdenum 99 isotope used for 80% of radiation treatments, the UK will have to negotiate new arrangements to replace EURATOM, the treaty that underpins nuclear regulation and cooperation across Europe.

The potential risk to cancer sufferers is just one small piece of the fallout from the UK’s decision to leave EURATOM as part of the Brexit process to leave the European Union.

The surprise decision was announced in a footnote to the Parliamentary Bill published on 26th January to authorise Brexit. Up until that point this was a grey area with disagreements over whether Brexit meant the UK would also have to leave EURATOM.

The balance of opinion seemed to confirm that, although EURATOM is legally distinct from the European Union, the UK would have leave both once Article 50 was triggered. (I wrote about this in November 2016 in Nuclear News No. 89.)

This was confirmed at a meeting I attended at the Scottish Government last September when most of the nuclear industry representatives and regulators appeared to be resigned to leaving EURATOM.

On the other hand, the European nuclear lobby group – Foratomthought the UK could decide to negotiate to remain a member (or agree some form of associate membership). The EU has numerous association agreements with other countries. For instance Switzerland is an associate member of EURATOM and the Ukraine has joined the EURATOM Research and Training Programme.

A blog on the Euractiv website goes even further saying that the idea that EURATOM is included in the exit clause of the Lisbon Treaties is false. [2]

The decision has wide-ranging implications for Britain’s nuclear industry, research, access to fissile materials and the status of approximately 20 nuclear co-operation agreements that it has with other countries around the world.

The UK is going to have to strike new international agreements with all these countries to maintain access to nuclear power technology – crucially with the US because several of the UK’s existing and planned nuclear reactors use US technology or fuel.

A new bilateral agreement will also be needed with the International Atomic Energy Agency. Nuclear co-operation agreements can take considerable time to agree and ratify. It may not be possible to complete them before Britain leaves the EU in 2019.

New reactors in jeopardy?

The concern now in the UK nuclear industry is that leaving EURATOM will complicate and delay the UK’s plans to build a new generation of nuclear power stations.

“The new wave of British nuclear power stations was in jeopardy” said the Times. Withdrawal could cause “major disruption” according to the Nuclear Industry Association (NIA) particularly for Horizon and Nugen, which are developing plans for reactors on Anglesey and in Cumbria because their plans involve co-operation with US nuclear companies.

Former Labour MP Tom Greatrex, now chief executive of the NIA, said: “The UK nuclear industry has made it crystal clear to the government before and since the referendum that our preferred position is to maintain membership of EURATOM.” [3] Although Horizon, whose reactors would use US nuclear fuel, says it is reassured by the government’s commitment to put new regulatory arrangements in place quickly. [4]

The Hinkley Point C station in Somerset could also face renewed problems. EDF has warned that Brexit could increase “the costs of essential new infrastructure developments and could delay their delivery”. EDF, which also operates Britain’s existing nuclear plants, has said it would prefer if the UK stayed within EURATOM and that if not it would be “essential that the UK establishes equivalent safeguards arrangements”.

However, if the UK ceases to be part of EURATOM, then it is vital the government agree transitional arrangements, to give the UK time to negotiate and complete new agreements with EU member states and third countries including the US, Japan and Canada who have nuclear co-operation agreements within the EURATOM framework.”

EDF is also worried that Brexit will affect the movement of people and delay the delivery of Hinkley Point C [5]. It could also impact upon its costs. For the reactor builders, being outside the nuclear common market as well as the single market and having no freedom of movement may lead to higher prices if tariffs and customs checks are introduced or if restrictions are imposed on foreign nuclear scientists and engineers. [6]

Nuclear safeguards – the implications

Leaving EURATOM is also likely to add to the workload of the UK’s nuclear regulator, the Office for Nuclear Regulation (ONR), which is busy assessing designs for new nuclear reactors including the Chinese Hualong One design.

And as nuclear engineering consultant John Large points out, “The main burden of the UK leaving EURATOM will be the need for it to cover its nuclear non-proliferation safeguards commitment and for this it will have to either set up a separate, independent agency or bring these treaty responsibilities into the Office for Nuclear Regulation.”

The Green Party’s only UK MP Caroline Lucas raised the safeguards issue in Parliament last August when she asked the business and energy secretary “what steps would be needed to replace EU Atomic Energy Community safeguards inspectors with International Atomic Energy Agency (IAEA) Inspectors to implement safeguards provisions.”

The reply did not address the fact that currently international inspections of UK nuclear plants and materials to ensure there is no diversion of materials to military misuse is verified by EURATOM on behalf of the IAEA. [7]

A quarter of all time spent on nuclear inspections throughout the EU is carried out in Britain, due to the scale of nuclear fuel fabrication and waste management facilities, such as Sellafield. Without EURATOM ONR will need to undertake many more inspections to meet IAEA requirements.

The Government will have to find extra cash, but it will also struggle to hire and train the necessary new staff especially when ONR is already struggling to keep up with the assessment of several new reactors designs (EPR, AP1000, ABWR and Hualong One). [8]

As proliferation expert Dr David Lowry puts it: “It is now time energy and foreign ministers and their advisors turn their attention to what they are going to do to ensure nuclear safeguards continuity in the UK post Brexit to avoid the UK becoming a nuclear rogue state.” [9]

Fusion – nuclear research scientists angry

Membership of EURATOM is also a condition for Britain hosting what is currently the largest nuclear fusion experiment in the world. Based at the Culham centre in south Oxfordshire, the Joint European Torus project involves some 350 scientists exploring the potential of fusion power, backed by funding from almost 40 countries in the EUROfusion consortium.

According to Nature, scientists are shocked and angry about the EURATOM exit. Depending on whether and how the UK negotiates a way back in to the organization, the move could endanger British participation in the world’s largest fusion experiment, the International Thermonuclear Experimental Reactor (ITER) in southern France.

It could also curtail operations at the Joint European Torus (JET), a nuclear-fusion facility in Culham. The facility is a half-sized version of ITER which currently receives around €56 million annually from EURATOM. Steven Cowley, a theoretical physicist at the University of Oxford who until last year was director of the Culham Centre described the decision to leave EURATOM as “bonkers”. [10]

According to the Trade Union representing nuclear scientists, the Culham Centre signed a €283m contract in 2014 for running the Joint European Torus facility until 2018, with similar contracts expected in the future.

This sum accounts for more than a quarter of the overall European Fusion Programme budget over the same period – a budget funded in part by the EURATOM Horizon 2020 programme. The UKAEA also brings EURATOM money directly to the region and UK industry by winning ITER (global fusion project) contracts. [11]

Wider impact in Europe

The political impact in the EU remains equally unclear. Britain has been one of Europe’s most active supporters of nuclear power. Brexit could tip the balance of member states towards an anti-nuclear majority.

And what then? Just as the International Whaling Commission has become an essentially anti-whaling UN agency, might EURATOM states seek to use the treaty to block, not support, the construction of new nuclear power stations in Europe. Its main role would then be to supervise the sector’s long term decline.

The complications around the UK withdrawal from EURATOM could also put a spotlight onto the EURATOM Treaty itself, whose legal status and many of its functions are out of step with the modern EU and may once again lead to calls for it to be abolished. [12]

EURATOM Mark II?

The UK secretary of state for exiting the European Union, David Davis, told parliament on 31 January 2017 that the UK will seek an alternative agreement with the International Atomic Energy Agency (IAEA) if it fails to negotiate “some sort of relationship” with the European Atomic Energy Community (EURATOM) during Brexit negotiations. [13]

The idea of a new pan-European nuclear group is also being floated, according to former conservative MP Tim Yeo who chairs the trade group New Nuclear Watch Europe.

The successor group is envisaged as a wider Europe-based pro-nuclear club including the 27 European Union member states as well as countries outside the bloc that are also developing new nuclear power plants. As well as the UK the group could include Turkey, Ukraine, Belarus and potentially Russia. [14]

Time for reform – or abolition

The UK nuclear establishment is going to have its work cut out to make sure that Brexatom does not add to the delays in its proposed new nuclear reactor programme already in prospect as a result of financial problems at EDF, Areva, Toshiba, Engie and Hitachi.

There will be widespread support for efforts to avoid any hiatus in the safeguarding of the huge quantity of fissile material in the UK. But as Hans-Josef Fell, president of the Energy Watch Group and a former member of the German parliament for the Greens points out the UK’s exit from EURATOM should be seen as an opportunity.

It’s a clear sign that it is possible for anti-nuclear countries like Austria, Ireland and Germany to unilaterally leave the Treaty – even a unique chance to dissolve Euratom. He says the core task of EURATOM is to support the nuclear industry. After Chernobyl and Fukushima ending that support is long overdue. [15]

The UK Nuclear Free Local Authorities (NFLA) recently pointed out that it sees “the EURATOM Treaty as one of the most direct ways the nuclear industry has promoted nuclear power in Europe over the past 60 years. It has often been the inside track from which pro-nuclear governments have ensured support for nuclear power within the European Commission.” [16]

For instance, in 2014 the European Union’s Competition Commissioner Margrethe Vestager had less leeway in evaluating the UK’s Hinkley Point C financial support scheme than it would have done for a non-nuclear project because of the EURATOM Treaty, which is meant to support and encourage investment in nuclear projects where needed.

“This means that if member states choose to invest in nuclear energy, the EURATOM’s objective to facilitate that investment becomes an objective of common interest that the Commission should take into account in its state aid assessment”, she said. [17]

So the Commission approved the UK Government’s plans to subsidise Hinkley Point C despite the fact that even the UK government itself expects solar and wind power to be cheaper than new nuclear power by the time Hinkley Point C is completed. [18]

Not surprising then that the NFLA sees this as “an ideal time for a major and all encompassing reform of the EURATOM Treaty to take account of the changed energy market in the EU, where renewable energy is rapidly expanding and nuclear power is in decline.” [19]

 


 

Pete Roche is editor of the No2NuclearPower website which produces a free daily nuclear news service.

Sign up to receive No2NuclearPower Bulletin by e-mail here.

This article was originally published in Nuclear Monitor #838 and is reproduced here by kind permission of the author. This version includes some updates by The Ecologist.

References

  1. FT 26th January 2017 https://www.ft.com/content/fe3b50a4-e3e1-11e6-8405-9e5580d6e5fb

  2. Euractiv 16th June 2016 http://democracy.blogactiv.eu/2016/06/16/euratom-after-brexit-votes-uk-will-remain-a-community-member-for-nuclear-non-proliferation/

  3. The Times 27th Jan 2017 http://www.thetimes.co.uk/edition/business/britain-quits-european-nuclear-body-pgmq9m9fc

  4. FT 26th January 2017 https://www.ft.com/content/fe3b50a4-e3e1-11e6-8405-9e5580d6e5fb

  5. Guardian 27th Jan 2017 https://www.theguardian.com/business/2017/jan/27/uk-exit-eu-atomic-treaty-brexit-euratom-hinkley-point-c

  6. Antony Froggatt in The Conversation 30th Jan 2017 http://theconversation.com/brexatom-the-uk-will-now-leave-europes-nuclear-energy-authority-72136

  7. David Lowry’s Blog 27th Jan 2017 http://drdavidlowry.blogspot.co.uk/2017/01/how-brexit-britain-could-become.html

  8. Antony Froggatt in The Conversation 30th Jan 2017 http://theconversation.com/brexatom-the-uk-will-now-leave-europes-nuclear-energy-authority-72136

  9. David Lowry’s Blog 27th Jan 2017 http://drdavidlowry.blogspot.co.uk/2017/01/how-brexit-britain-could-become.html

  10. Nature 27th Jan 2017 http://www.nature.com/news/researchers-shocked-at-uk-s-plan-to-exit-eu-nuclear-agency-1.21388

  11. FT 5th Feb 2017 https://www.ft.com/content/d3d780bc-e7b5-11e6-893c-082c54a7f539

  12. Antony Froggatt in The Conversation 30th Jan 2017 http://theconversation.com/brexatom-the-uk-will-now-leave-europes-nuclear-energy-authority-72136

  13. Nucnet 2nd Feb 2017 http://www.nucnet.org/all-the-news/2017/02/02/uk-could-seek-alternative-agreement-to-euratom-with-iaea-after-bexit

  14. Telegraph 4th February 2017 http://www.telegraph.co.uk/business/2017/02/04/britain-proposing-wider-europe-based-pro-nuclear-club-article/

  15. Energy Post 5th July 2016 http://energypost.eu/brexit-offers-chance-finally-put-end-euratom-treaty/

  16. NFLA Press Release 30th Jan 2017 http://www.nuclearpolicy.info/news/nfla-uk-decision-withdraw-euratom-could-halt-new-nuclear/

  17. Politico 11th January 2017 http://www.politico.eu/article/hungary-nuclear-approval-expected-thanks-to-uk-and-france-precedent/

  18. Guardian 11th August 2016 https://www.theguardian.com/environment/2016/aug/11/solar-and-windcheaper-than-new-nuclear-by-the-time-hinkley-is-built

  19. NFLA Press Release 30th Jan 2017 http://www.nuclearpolicy.info/news/nfla-uk-decision-withdraw-euratom-could-halt-new-nuclear/

 

The nuclear fallout from ‘Brexatom’: threat, opportunity, or plain bonkers?

UK cancer patients may no longer be able to receive radiotherapy after Brexit, according to today’s Financial Times.

Or at least, to be able to import the crucial Molybdenum 99 isotope used for 80% of radiation treatments, the UK will have to negotiate new arrangements to replace EURATOM, the treaty that underpins nuclear regulation and cooperation across Europe.

The potential risk to cancer sufferers is just one small piece of the fallout from the UK’s decision to leave EURATOM as part of the Brexit process to leave the European Union.

The surprise decision was announced in a footnote to the Parliamentary Bill published on 26th January to authorise Brexit. Up until that point this was a grey area with disagreements over whether Brexit meant the UK would also have to leave EURATOM.

The balance of opinion seemed to confirm that, although EURATOM is legally distinct from the European Union, the UK would have leave both once Article 50 was triggered. (I wrote about this in November 2016 in Nuclear News No. 89.)

This was confirmed at a meeting I attended at the Scottish Government last September when most of the nuclear industry representatives and regulators appeared to be resigned to leaving EURATOM.

On the other hand, the European nuclear lobby group – Foratomthought the UK could decide to negotiate to remain a member (or agree some form of associate membership). The EU has numerous association agreements with other countries. For instance Switzerland is an associate member of EURATOM and the Ukraine has joined the EURATOM Research and Training Programme.

A blog on the Euractiv website goes even further saying that the idea that EURATOM is included in the exit clause of the Lisbon Treaties is false. [2]

The decision has wide-ranging implications for Britain’s nuclear industry, research, access to fissile materials and the status of approximately 20 nuclear co-operation agreements that it has with other countries around the world.

The UK is going to have to strike new international agreements with all these countries to maintain access to nuclear power technology – crucially with the US because several of the UK’s existing and planned nuclear reactors use US technology or fuel.

A new bilateral agreement will also be needed with the International Atomic Energy Agency. Nuclear co-operation agreements can take considerable time to agree and ratify. It may not be possible to complete them before Britain leaves the EU in 2019.

New reactors in jeopardy?

The concern now in the UK nuclear industry is that leaving EURATOM will complicate and delay the UK’s plans to build a new generation of nuclear power stations.

“The new wave of British nuclear power stations was in jeopardy” said the Times. Withdrawal could cause “major disruption” according to the Nuclear Industry Association (NIA) particularly for Horizon and Nugen, which are developing plans for reactors on Anglesey and in Cumbria because their plans involve co-operation with US nuclear companies.

Former Labour MP Tom Greatrex, now chief executive of the NIA, said: “The UK nuclear industry has made it crystal clear to the government before and since the referendum that our preferred position is to maintain membership of EURATOM.” [3] Although Horizon, whose reactors would use US nuclear fuel, says it is reassured by the government’s commitment to put new regulatory arrangements in place quickly. [4]

The Hinkley Point C station in Somerset could also face renewed problems. EDF has warned that Brexit could increase “the costs of essential new infrastructure developments and could delay their delivery”. EDF, which also operates Britain’s existing nuclear plants, has said it would prefer if the UK stayed within EURATOM and that if not it would be “essential that the UK establishes equivalent safeguards arrangements”.

However, if the UK ceases to be part of EURATOM, then it is vital the government agree transitional arrangements, to give the UK time to negotiate and complete new agreements with EU member states and third countries including the US, Japan and Canada who have nuclear co-operation agreements within the EURATOM framework.”

EDF is also worried that Brexit will affect the movement of people and delay the delivery of Hinkley Point C [5]. It could also impact upon its costs. For the reactor builders, being outside the nuclear common market as well as the single market and having no freedom of movement may lead to higher prices if tariffs and customs checks are introduced or if restrictions are imposed on foreign nuclear scientists and engineers. [6]

Nuclear safeguards – the implications

Leaving EURATOM is also likely to add to the workload of the UK’s nuclear regulator, the Office for Nuclear Regulation (ONR), which is busy assessing designs for new nuclear reactors including the Chinese Hualong One design.

And as nuclear engineering consultant John Large points out, “The main burden of the UK leaving EURATOM will be the need for it to cover its nuclear non-proliferation safeguards commitment and for this it will have to either set up a separate, independent agency or bring these treaty responsibilities into the Office for Nuclear Regulation.”

The Green Party’s only UK MP Caroline Lucas raised the safeguards issue in Parliament last August when she asked the business and energy secretary “what steps would be needed to replace EU Atomic Energy Community safeguards inspectors with International Atomic Energy Agency (IAEA) Inspectors to implement safeguards provisions.”

The reply did not address the fact that currently international inspections of UK nuclear plants and materials to ensure there is no diversion of materials to military misuse is verified by EURATOM on behalf of the IAEA. [7]

A quarter of all time spent on nuclear inspections throughout the EU is carried out in Britain, due to the scale of nuclear fuel fabrication and waste management facilities, such as Sellafield. Without EURATOM ONR will need to undertake many more inspections to meet IAEA requirements.

The Government will have to find extra cash, but it will also struggle to hire and train the necessary new staff especially when ONR is already struggling to keep up with the assessment of several new reactors designs (EPR, AP1000, ABWR and Hualong One). [8]

As proliferation expert Dr David Lowry puts it: “It is now time energy and foreign ministers and their advisors turn their attention to what they are going to do to ensure nuclear safeguards continuity in the UK post Brexit to avoid the UK becoming a nuclear rogue state.” [9]

Fusion – nuclear research scientists angry

Membership of EURATOM is also a condition for Britain hosting what is currently the largest nuclear fusion experiment in the world. Based at the Culham centre in south Oxfordshire, the Joint European Torus project involves some 350 scientists exploring the potential of fusion power, backed by funding from almost 40 countries in the EUROfusion consortium.

According to Nature, scientists are shocked and angry about the EURATOM exit. Depending on whether and how the UK negotiates a way back in to the organization, the move could endanger British participation in the world’s largest fusion experiment, the International Thermonuclear Experimental Reactor (ITER) in southern France.

It could also curtail operations at the Joint European Torus (JET), a nuclear-fusion facility in Culham. The facility is a half-sized version of ITER which currently receives around €56 million annually from EURATOM. Steven Cowley, a theoretical physicist at the University of Oxford who until last year was director of the Culham Centre described the decision to leave EURATOM as “bonkers”. [10]

According to the Trade Union representing nuclear scientists, the Culham Centre signed a €283m contract in 2014 for running the Joint European Torus facility until 2018, with similar contracts expected in the future.

This sum accounts for more than a quarter of the overall European Fusion Programme budget over the same period – a budget funded in part by the EURATOM Horizon 2020 programme. The UKAEA also brings EURATOM money directly to the region and UK industry by winning ITER (global fusion project) contracts. [11]

Wider impact in Europe

The political impact in the EU remains equally unclear. Britain has been one of Europe’s most active supporters of nuclear power. Brexit could tip the balance of member states towards an anti-nuclear majority.

And what then? Just as the International Whaling Commission has become an essentially anti-whaling UN agency, might EURATOM states seek to use the treaty to block, not support, the construction of new nuclear power stations in Europe. Its main role would then be to supervise the sector’s long term decline.

The complications around the UK withdrawal from EURATOM could also put a spotlight onto the EURATOM Treaty itself, whose legal status and many of its functions are out of step with the modern EU and may once again lead to calls for it to be abolished. [12]

EURATOM Mark II?

The UK secretary of state for exiting the European Union, David Davis, told parliament on 31 January 2017 that the UK will seek an alternative agreement with the International Atomic Energy Agency (IAEA) if it fails to negotiate “some sort of relationship” with the European Atomic Energy Community (EURATOM) during Brexit negotiations. [13]

The idea of a new pan-European nuclear group is also being floated, according to former conservative MP Tim Yeo who chairs the trade group New Nuclear Watch Europe.

The successor group is envisaged as a wider Europe-based pro-nuclear club including the 27 European Union member states as well as countries outside the bloc that are also developing new nuclear power plants. As well as the UK the group could include Turkey, Ukraine, Belarus and potentially Russia. [14]

Time for reform – or abolition

The UK nuclear establishment is going to have its work cut out to make sure that Brexatom does not add to the delays in its proposed new nuclear reactor programme already in prospect as a result of financial problems at EDF, Areva, Toshiba, Engie and Hitachi.

There will be widespread support for efforts to avoid any hiatus in the safeguarding of the huge quantity of fissile material in the UK. But as Hans-Josef Fell, president of the Energy Watch Group and a former member of the German parliament for the Greens points out the UK’s exit from EURATOM should be seen as an opportunity.

It’s a clear sign that it is possible for anti-nuclear countries like Austria, Ireland and Germany to unilaterally leave the Treaty – even a unique chance to dissolve Euratom. He says the core task of EURATOM is to support the nuclear industry. After Chernobyl and Fukushima ending that support is long overdue. [15]

The UK Nuclear Free Local Authorities (NFLA) recently pointed out that it sees “the EURATOM Treaty as one of the most direct ways the nuclear industry has promoted nuclear power in Europe over the past 60 years. It has often been the inside track from which pro-nuclear governments have ensured support for nuclear power within the European Commission.” [16]

For instance, in 2014 the European Union’s Competition Commissioner Margrethe Vestager had less leeway in evaluating the UK’s Hinkley Point C financial support scheme than it would have done for a non-nuclear project because of the EURATOM Treaty, which is meant to support and encourage investment in nuclear projects where needed.

“This means that if member states choose to invest in nuclear energy, the EURATOM’s objective to facilitate that investment becomes an objective of common interest that the Commission should take into account in its state aid assessment”, she said. [17]

So the Commission approved the UK Government’s plans to subsidise Hinkley Point C despite the fact that even the UK government itself expects solar and wind power to be cheaper than new nuclear power by the time Hinkley Point C is completed. [18]

Not surprising then that the NFLA sees this as “an ideal time for a major and all encompassing reform of the EURATOM Treaty to take account of the changed energy market in the EU, where renewable energy is rapidly expanding and nuclear power is in decline.” [19]

 


 

Pete Roche is editor of the No2NuclearPower website which produces a free daily nuclear news service.

Sign up to receive No2NuclearPower Bulletin by e-mail here.

This article was originally published in Nuclear Monitor #838 and is reproduced here by kind permission of the author. This version includes some updates by The Ecologist.

References

  1. FT 26th January 2017 https://www.ft.com/content/fe3b50a4-e3e1-11e6-8405-9e5580d6e5fb

  2. Euractiv 16th June 2016 http://democracy.blogactiv.eu/2016/06/16/euratom-after-brexit-votes-uk-will-remain-a-community-member-for-nuclear-non-proliferation/

  3. The Times 27th Jan 2017 http://www.thetimes.co.uk/edition/business/britain-quits-european-nuclear-body-pgmq9m9fc

  4. FT 26th January 2017 https://www.ft.com/content/fe3b50a4-e3e1-11e6-8405-9e5580d6e5fb

  5. Guardian 27th Jan 2017 https://www.theguardian.com/business/2017/jan/27/uk-exit-eu-atomic-treaty-brexit-euratom-hinkley-point-c

  6. Antony Froggatt in The Conversation 30th Jan 2017 http://theconversation.com/brexatom-the-uk-will-now-leave-europes-nuclear-energy-authority-72136

  7. David Lowry’s Blog 27th Jan 2017 http://drdavidlowry.blogspot.co.uk/2017/01/how-brexit-britain-could-become.html

  8. Antony Froggatt in The Conversation 30th Jan 2017 http://theconversation.com/brexatom-the-uk-will-now-leave-europes-nuclear-energy-authority-72136

  9. David Lowry’s Blog 27th Jan 2017 http://drdavidlowry.blogspot.co.uk/2017/01/how-brexit-britain-could-become.html

  10. Nature 27th Jan 2017 http://www.nature.com/news/researchers-shocked-at-uk-s-plan-to-exit-eu-nuclear-agency-1.21388

  11. FT 5th Feb 2017 https://www.ft.com/content/d3d780bc-e7b5-11e6-893c-082c54a7f539

  12. Antony Froggatt in The Conversation 30th Jan 2017 http://theconversation.com/brexatom-the-uk-will-now-leave-europes-nuclear-energy-authority-72136

  13. Nucnet 2nd Feb 2017 http://www.nucnet.org/all-the-news/2017/02/02/uk-could-seek-alternative-agreement-to-euratom-with-iaea-after-bexit

  14. Telegraph 4th February 2017 http://www.telegraph.co.uk/business/2017/02/04/britain-proposing-wider-europe-based-pro-nuclear-club-article/

  15. Energy Post 5th July 2016 http://energypost.eu/brexit-offers-chance-finally-put-end-euratom-treaty/

  16. NFLA Press Release 30th Jan 2017 http://www.nuclearpolicy.info/news/nfla-uk-decision-withdraw-euratom-could-halt-new-nuclear/

  17. Politico 11th January 2017 http://www.politico.eu/article/hungary-nuclear-approval-expected-thanks-to-uk-and-france-precedent/

  18. Guardian 11th August 2016 https://www.theguardian.com/environment/2016/aug/11/solar-and-windcheaper-than-new-nuclear-by-the-time-hinkley-is-built

  19. NFLA Press Release 30th Jan 2017 http://www.nuclearpolicy.info/news/nfla-uk-decision-withdraw-euratom-could-halt-new-nuclear/

 

The nuclear fallout from ‘Brexatom’: threat, opportunity, or plain bonkers?

UK cancer patients may no longer be able to receive radiotherapy after Brexit, according to today’s Financial Times.

Or at least, to be able to import the crucial Molybdenum 99 isotope used for 80% of radiation treatments, the UK will have to negotiate new arrangements to replace EURATOM, the treaty that underpins nuclear regulation and cooperation across Europe.

The potential risk to cancer sufferers is just one small piece of the fallout from the UK’s decision to leave EURATOM as part of the Brexit process to leave the European Union.

The surprise decision was announced in a footnote to the Parliamentary Bill published on 26th January to authorise Brexit. Up until that point this was a grey area with disagreements over whether Brexit meant the UK would also have to leave EURATOM.

The balance of opinion seemed to confirm that, although EURATOM is legally distinct from the European Union, the UK would have leave both once Article 50 was triggered. (I wrote about this in November 2016 in Nuclear News No. 89.)

This was confirmed at a meeting I attended at the Scottish Government last September when most of the nuclear industry representatives and regulators appeared to be resigned to leaving EURATOM.

On the other hand, the European nuclear lobby group – Foratomthought the UK could decide to negotiate to remain a member (or agree some form of associate membership). The EU has numerous association agreements with other countries. For instance Switzerland is an associate member of EURATOM and the Ukraine has joined the EURATOM Research and Training Programme.

A blog on the Euractiv website goes even further saying that the idea that EURATOM is included in the exit clause of the Lisbon Treaties is false. [2]

The decision has wide-ranging implications for Britain’s nuclear industry, research, access to fissile materials and the status of approximately 20 nuclear co-operation agreements that it has with other countries around the world.

The UK is going to have to strike new international agreements with all these countries to maintain access to nuclear power technology – crucially with the US because several of the UK’s existing and planned nuclear reactors use US technology or fuel.

A new bilateral agreement will also be needed with the International Atomic Energy Agency. Nuclear co-operation agreements can take considerable time to agree and ratify. It may not be possible to complete them before Britain leaves the EU in 2019.

New reactors in jeopardy?

The concern now in the UK nuclear industry is that leaving EURATOM will complicate and delay the UK’s plans to build a new generation of nuclear power stations.

“The new wave of British nuclear power stations was in jeopardy” said the Times. Withdrawal could cause “major disruption” according to the Nuclear Industry Association (NIA) particularly for Horizon and Nugen, which are developing plans for reactors on Anglesey and in Cumbria because their plans involve co-operation with US nuclear companies.

Former Labour MP Tom Greatrex, now chief executive of the NIA, said: “The UK nuclear industry has made it crystal clear to the government before and since the referendum that our preferred position is to maintain membership of EURATOM.” [3] Although Horizon, whose reactors would use US nuclear fuel, says it is reassured by the government’s commitment to put new regulatory arrangements in place quickly. [4]

The Hinkley Point C station in Somerset could also face renewed problems. EDF has warned that Brexit could increase “the costs of essential new infrastructure developments and could delay their delivery”. EDF, which also operates Britain’s existing nuclear plants, has said it would prefer if the UK stayed within EURATOM and that if not it would be “essential that the UK establishes equivalent safeguards arrangements”.

However, if the UK ceases to be part of EURATOM, then it is vital the government agree transitional arrangements, to give the UK time to negotiate and complete new agreements with EU member states and third countries including the US, Japan and Canada who have nuclear co-operation agreements within the EURATOM framework.”

EDF is also worried that Brexit will affect the movement of people and delay the delivery of Hinkley Point C [5]. It could also impact upon its costs. For the reactor builders, being outside the nuclear common market as well as the single market and having no freedom of movement may lead to higher prices if tariffs and customs checks are introduced or if restrictions are imposed on foreign nuclear scientists and engineers. [6]

Nuclear safeguards – the implications

Leaving EURATOM is also likely to add to the workload of the UK’s nuclear regulator, the Office for Nuclear Regulation (ONR), which is busy assessing designs for new nuclear reactors including the Chinese Hualong One design.

And as nuclear engineering consultant John Large points out, “The main burden of the UK leaving EURATOM will be the need for it to cover its nuclear non-proliferation safeguards commitment and for this it will have to either set up a separate, independent agency or bring these treaty responsibilities into the Office for Nuclear Regulation.”

The Green Party’s only UK MP Caroline Lucas raised the safeguards issue in Parliament last August when she asked the business and energy secretary “what steps would be needed to replace EU Atomic Energy Community safeguards inspectors with International Atomic Energy Agency (IAEA) Inspectors to implement safeguards provisions.”

The reply did not address the fact that currently international inspections of UK nuclear plants and materials to ensure there is no diversion of materials to military misuse is verified by EURATOM on behalf of the IAEA. [7]

A quarter of all time spent on nuclear inspections throughout the EU is carried out in Britain, due to the scale of nuclear fuel fabrication and waste management facilities, such as Sellafield. Without EURATOM ONR will need to undertake many more inspections to meet IAEA requirements.

The Government will have to find extra cash, but it will also struggle to hire and train the necessary new staff especially when ONR is already struggling to keep up with the assessment of several new reactors designs (EPR, AP1000, ABWR and Hualong One). [8]

As proliferation expert Dr David Lowry puts it: “It is now time energy and foreign ministers and their advisors turn their attention to what they are going to do to ensure nuclear safeguards continuity in the UK post Brexit to avoid the UK becoming a nuclear rogue state.” [9]

Fusion – nuclear research scientists angry

Membership of EURATOM is also a condition for Britain hosting what is currently the largest nuclear fusion experiment in the world. Based at the Culham centre in south Oxfordshire, the Joint European Torus project involves some 350 scientists exploring the potential of fusion power, backed by funding from almost 40 countries in the EUROfusion consortium.

According to Nature, scientists are shocked and angry about the EURATOM exit. Depending on whether and how the UK negotiates a way back in to the organization, the move could endanger British participation in the world’s largest fusion experiment, the International Thermonuclear Experimental Reactor (ITER) in southern France.

It could also curtail operations at the Joint European Torus (JET), a nuclear-fusion facility in Culham. The facility is a half-sized version of ITER which currently receives around €56 million annually from EURATOM. Steven Cowley, a theoretical physicist at the University of Oxford who until last year was director of the Culham Centre described the decision to leave EURATOM as “bonkers”. [10]

According to the Trade Union representing nuclear scientists, the Culham Centre signed a €283m contract in 2014 for running the Joint European Torus facility until 2018, with similar contracts expected in the future.

This sum accounts for more than a quarter of the overall European Fusion Programme budget over the same period – a budget funded in part by the EURATOM Horizon 2020 programme. The UKAEA also brings EURATOM money directly to the region and UK industry by winning ITER (global fusion project) contracts. [11]

Wider impact in Europe

The political impact in the EU remains equally unclear. Britain has been one of Europe’s most active supporters of nuclear power. Brexit could tip the balance of member states towards an anti-nuclear majority.

And what then? Just as the International Whaling Commission has become an essentially anti-whaling UN agency, might EURATOM states seek to use the treaty to block, not support, the construction of new nuclear power stations in Europe. Its main role would then be to supervise the sector’s long term decline.

The complications around the UK withdrawal from EURATOM could also put a spotlight onto the EURATOM Treaty itself, whose legal status and many of its functions are out of step with the modern EU and may once again lead to calls for it to be abolished. [12]

EURATOM Mark II?

The UK secretary of state for exiting the European Union, David Davis, told parliament on 31 January 2017 that the UK will seek an alternative agreement with the International Atomic Energy Agency (IAEA) if it fails to negotiate “some sort of relationship” with the European Atomic Energy Community (EURATOM) during Brexit negotiations. [13]

The idea of a new pan-European nuclear group is also being floated, according to former conservative MP Tim Yeo who chairs the trade group New Nuclear Watch Europe.

The successor group is envisaged as a wider Europe-based pro-nuclear club including the 27 European Union member states as well as countries outside the bloc that are also developing new nuclear power plants. As well as the UK the group could include Turkey, Ukraine, Belarus and potentially Russia. [14]

Time for reform – or abolition

The UK nuclear establishment is going to have its work cut out to make sure that Brexatom does not add to the delays in its proposed new nuclear reactor programme already in prospect as a result of financial problems at EDF, Areva, Toshiba, Engie and Hitachi.

There will be widespread support for efforts to avoid any hiatus in the safeguarding of the huge quantity of fissile material in the UK. But as Hans-Josef Fell, president of the Energy Watch Group and a former member of the German parliament for the Greens points out the UK’s exit from EURATOM should be seen as an opportunity.

It’s a clear sign that it is possible for anti-nuclear countries like Austria, Ireland and Germany to unilaterally leave the Treaty – even a unique chance to dissolve Euratom. He says the core task of EURATOM is to support the nuclear industry. After Chernobyl and Fukushima ending that support is long overdue. [15]

The UK Nuclear Free Local Authorities (NFLA) recently pointed out that it sees “the EURATOM Treaty as one of the most direct ways the nuclear industry has promoted nuclear power in Europe over the past 60 years. It has often been the inside track from which pro-nuclear governments have ensured support for nuclear power within the European Commission.” [16]

For instance, in 2014 the European Union’s Competition Commissioner Margrethe Vestager had less leeway in evaluating the UK’s Hinkley Point C financial support scheme than it would have done for a non-nuclear project because of the EURATOM Treaty, which is meant to support and encourage investment in nuclear projects where needed.

“This means that if member states choose to invest in nuclear energy, the EURATOM’s objective to facilitate that investment becomes an objective of common interest that the Commission should take into account in its state aid assessment”, she said. [17]

So the Commission approved the UK Government’s plans to subsidise Hinkley Point C despite the fact that even the UK government itself expects solar and wind power to be cheaper than new nuclear power by the time Hinkley Point C is completed. [18]

Not surprising then that the NFLA sees this as “an ideal time for a major and all encompassing reform of the EURATOM Treaty to take account of the changed energy market in the EU, where renewable energy is rapidly expanding and nuclear power is in decline.” [19]

 


 

Pete Roche is editor of the No2NuclearPower website which produces a free daily nuclear news service.

Sign up to receive No2NuclearPower Bulletin by e-mail here.

This article was originally published in Nuclear Monitor #838 and is reproduced here by kind permission of the author. This version includes some updates by The Ecologist.

References

  1. FT 26th January 2017 https://www.ft.com/content/fe3b50a4-e3e1-11e6-8405-9e5580d6e5fb

  2. Euractiv 16th June 2016 http://democracy.blogactiv.eu/2016/06/16/euratom-after-brexit-votes-uk-will-remain-a-community-member-for-nuclear-non-proliferation/

  3. The Times 27th Jan 2017 http://www.thetimes.co.uk/edition/business/britain-quits-european-nuclear-body-pgmq9m9fc

  4. FT 26th January 2017 https://www.ft.com/content/fe3b50a4-e3e1-11e6-8405-9e5580d6e5fb

  5. Guardian 27th Jan 2017 https://www.theguardian.com/business/2017/jan/27/uk-exit-eu-atomic-treaty-brexit-euratom-hinkley-point-c

  6. Antony Froggatt in The Conversation 30th Jan 2017 http://theconversation.com/brexatom-the-uk-will-now-leave-europes-nuclear-energy-authority-72136

  7. David Lowry’s Blog 27th Jan 2017 http://drdavidlowry.blogspot.co.uk/2017/01/how-brexit-britain-could-become.html

  8. Antony Froggatt in The Conversation 30th Jan 2017 http://theconversation.com/brexatom-the-uk-will-now-leave-europes-nuclear-energy-authority-72136

  9. David Lowry’s Blog 27th Jan 2017 http://drdavidlowry.blogspot.co.uk/2017/01/how-brexit-britain-could-become.html

  10. Nature 27th Jan 2017 http://www.nature.com/news/researchers-shocked-at-uk-s-plan-to-exit-eu-nuclear-agency-1.21388

  11. FT 5th Feb 2017 https://www.ft.com/content/d3d780bc-e7b5-11e6-893c-082c54a7f539

  12. Antony Froggatt in The Conversation 30th Jan 2017 http://theconversation.com/brexatom-the-uk-will-now-leave-europes-nuclear-energy-authority-72136

  13. Nucnet 2nd Feb 2017 http://www.nucnet.org/all-the-news/2017/02/02/uk-could-seek-alternative-agreement-to-euratom-with-iaea-after-bexit

  14. Telegraph 4th February 2017 http://www.telegraph.co.uk/business/2017/02/04/britain-proposing-wider-europe-based-pro-nuclear-club-article/

  15. Energy Post 5th July 2016 http://energypost.eu/brexit-offers-chance-finally-put-end-euratom-treaty/

  16. NFLA Press Release 30th Jan 2017 http://www.nuclearpolicy.info/news/nfla-uk-decision-withdraw-euratom-could-halt-new-nuclear/

  17. Politico 11th January 2017 http://www.politico.eu/article/hungary-nuclear-approval-expected-thanks-to-uk-and-france-precedent/

  18. Guardian 11th August 2016 https://www.theguardian.com/environment/2016/aug/11/solar-and-windcheaper-than-new-nuclear-by-the-time-hinkley-is-built

  19. NFLA Press Release 30th Jan 2017 http://www.nuclearpolicy.info/news/nfla-uk-decision-withdraw-euratom-could-halt-new-nuclear/

 

Climate change is a white swan

At the advent of danger there are always two voices that speak with equal force in the human heart: one very reasonably invites a man to consider the nature of the peril and the means of escaping it; the other, with a still greater show of reason, argues that it is too depressing and painful to think of the danger since it is not in man’s power to foresee everything and avert the general march of events, and it is better therefore to shut one’s eyes to the disagreeable until it actually comes, and to think instead of what is pleasant. When a man is alone he generally listens to the first voice; in the company of his fellow-men, to the second.

- Tolstoy, War and Peace.

There is a spectre haunting our society, our world, our common future: the spectre of a ‘slow’ anthropogenically-induced climatically-induced cataclysm. Why call it a ‘spectre’? Because it seems unreal to us. An air of unreality hangs pervasively over our situation. If climate change were really as bad as all that, then we’d really be doing something about it…right? Can it really be that we are on the verge of committing human civilisation to oblivion? Surely it would take a true ‘black swan’ event to accomplish (sic) that?

A ‘black swan’ is a radically unexpected event. Much of my work in recent years has concerned the impact of such improbable or rare events that can be ‘determinative’, wiping out the effects of decades or millennia of normality or ‘progress’. For instance, my work alongside Nassim Taleb, arguing this case vis a vis financial crises, or genetic modification: (report here). We’ve argued the same case vis a vis climate: Black Swan Report

For, thinking precautionarily is the best way to do a successful ‘end-run’ around the tedious obstructionism of the climate-denialists: one doesn’t need to prove with certainty or even beyond reasonable doubt that human action is causing dangerous climate change, in order to have at hand a watertight precautionary case for radical action to rein in climate-destabilisation.

But there is also a basic way in which the case of climate is very different from the case of finance, or that of GM (or that of nuclear, or that of ‘the singularity’; and so on). It is this: it has been shown beyond reasonable doubt that anything remotely like a BAU path puts us on course for climate-nemesis. See for instance:

Human Climate Link video

Beyond Dangerous Climate Change

De-growth Strategies

Global Warming Scientific Concensus

Ever-worsening man-made climate change (ever-worsening, that is, barring a system change, a radical and swift transformation in our attitude to our living planet: Shock Message ) is not a potential ‘black swan’ event. It’s a white swan, an expected event. It is, quite simply, completely what anyone with a basic understanding of the situation should now expect.

True, there are some significant grey-flecked feathers in the white plumage. We don’t know the exact climate-sensitivity of the Earth system (Harsh Realities) and we don’t know all the feedbacks that are likely to kick in, nor just how bad (or, if we’re very, very lucky, good) most of them will be. We don’t know how long we’ve got. Crucially, these uncertainties, properly understood, underscore the case for radical precautious action on climate (see Tackling Uncertainty, Climate Letter & Talking Philosophy ): for uncertainty cuts both ways.

It may end up meaning that the fearful problem one was worried about turns out to be relatively tractable…Or it may end up meaning that it turns out even worse than expected ( From Bad To Disaster). There is an asymmetry here: for the worse the worst-case scenario for something potentially ruinous gets, the more strongly we need to guard against it. Uncertainty around climate means that we might well still be underestimating the scale of our exposure to ruin (and perhaps drastically so: Brave New Climate).

So, even the grey matter among the swan’s plumage changes the situation not one bit - except to underline how we not only (very probably) have a (broadly) predictable catastrophe facing us but furthermore one that may exceed most of our models and even our imaginations.

It is beyond reasonable doubt that we are driving ourselves over what is probably a cliff, maybe one with a fatally larger drop below it even than our best current science suggests.

Catastrophic climate change is a white swan; and even the odd grey or black feather only underscores how badly we are exposed to it. To catastrophe.

This raises deep questions…

Are we, as the great ancient Greek philosopher Aristotle claimed, rational animals?

How can we look our children in the eye, while we contemplate this cataclysm in the making? (Maybe this is why we typically don’t look our children in the eye, on this determinative issue. Why virtually all of us, and not just a fringe minority who we love to hate, are - in practice, most of the time - in climate-change-denial.)

How can we be woken up? How can we learn, as I’ve put it previously here on Medium (Why I Fear For Us All) to be ‘wise frogs’; how do we learn to jump out of the saucepan before we boil ourselves?

The coming cataclysm is bleedin obvious: how can we be enabled to see and to act to stop the bleedin obvious? Given that, apparently, it’s being obvious is not enough. To deny the bleedin obvious takes much more effort than to deny the unclear (and this of course is why for years now nefarious self-interested business interests and their shills and useful idiots have been trying to pretend that the climate situation is not clear: (Climate Memo Blog). And yet virtually all of us are complicit with such denial, much of the time…

The uncomfortable truth about anthropogenic climate change as a white swan, you see, is that it means that we almost certainly actually have much more in common with the relatively small minority of outright climate-denialists than we like to think.

The coming catastrophic climate change - inevitable unless we act rapidly, intelligently, together, in an unprecedented manner - is a white swan, an expected event. If, as at present seems likely, we let it approach and overwhelm us, no-one can say we weren’t plainly and straightforwardly warned. To not see this nemesis coming is akin to putting a telescope to one’s blind eye, or to mistaking black for white.

The likelihood of nemesis seems especially great given the awesomely-terrifying, literally-incredible fact that at this most pressing of moments in human history, a full-alt-fact denier (and his team of similarly-irrational denialist imbeciles) has taken occupancy of the White House (Trump The Climate Denier ). It is as if we were living a century ago, at the time of the infamous ‘Monkey Trial’ in the U.S. (Monkey Trial) when Darwinism went on trial for the right to be taught in school (and lost).

The differences are (1) A century has passed; have we learnt nothing?; (2) The ‘Monkey Trial’ concerned a benighted southern U.S. state government; while nothing less than the most powerful nation-state in the world is signed up to climate-denial; and (3) While it is unfortunate when evolution gets denied, it is catastrophic when climate-reality gets denied. This 3rd point is much the most consequential.

There is no scientific matter of more immediate import to humanity having a future, than the science of climate-change being acknowledged; or at minimum of a suitably precautious policy-line being taken re climate, even if one is not yet convinced (The Most Terrifying Video You Will Ever See).

As I set out above: when science involves us being exposed to huge hazard, then it is absurd to wait for or demand absolute proof. The rational thing to do - if we are rational - is to move much faster than that. And yet we are moving like snails, if that.

The situation we are in is an unprecedented one. It indicts us all, and indicts our ‘leaders’ perhaps most of all. We are staring now down the barrel of ecocide, which means a mass-suicide into which the voiceless and powerless and unborn future generations and most of our animal kin will be dragged down with us. It’s like Jonestown, only on a scale thousands upon thousands of times bigger. We’re all slowly drinking the Kool Aid, but this time it isn’t only those drinking it who are going to suffer or die. (And of course, to make the metaphor more accurate, it will tend to be those in ‘Third World’ countries who are as it were force-fed the Kool Aid on our behalf - they will, typically, suffer or die first.)

But yet…perhaps there are still grounds for hope in what I noted earlier. Perhaps some hope can be found in the very fact that (the truth is that) we ordinary people, we environmentally-minded normals, are much less different from climate-denialists than we tend to suppose. Perhaps, recognising our common failure thus far to face plainly the ‘white swan’ proceeding smoothly toward us bringing utter devastation with it, we might come together to confess our common failings, and then at last be in this together?

True, perhaps climate-criminals such as Exxon are beyond the pale; but perhaps the vast majority of us at least can seek to share our common fears (and failings, to date), and then start to rise to the occasion?

I have been making a habit of asking people over the past few years what they think the future will be like; I find many - most - who are somewhere between fairly and horrifically scared about it, so much so that they are overwhelmingly ‘primed’ to go into ‘denial’.

There are, I now firmly believe, millions upon millions of us quietly desperate about the future, feeling lonely in this desperation; but what if we were actually to risk starting to talk to one another about it, and what if we were then to find that we have more in common with each other than we’d realised? In particular in our terror, and the desire to do something with it rather than just suffer it. I think one of the things that we have to do now is to find more and more spaces where people can voice their suppressed anxiety about what we are doing to our planetary home, (and thus) to ourselves. This can be the first step, perhaps, toward a new sanity.

In a sequelar piece to come soon, I’ll be writing, along these lines, about how we might yet stop the slide into climate-cataclysm. How we can yet be wise; how we can rise to the awesome responsibility history has placed upon us - and inherit adequately the great gift of living at a time when humanity is in unprecedented peril. How is this a gift (and not just a curse)? Because it means we have the chance of being instrumental in building down that peril.

But for now I think I will leave this here. For first, we need to ponder. We need to reflect some on the extraordinary fact that the most likely future for humanity strongly appears to be not a steady progress - nor an unexpected destruction - but a steady, expected self-destruction.

The incipient climate chaos is a white swan. It would be the ultimate marker of sheer stupidity, as well as of shame and short-termist selfishness, if humanity succumbs to it.

This Author

Rupert Read is a Philosopher working and writing at UEA. He is also Chair @GreenHouse_UK think tank.

 

 

Trump’s multi-trillion dollar fraud on America: ‘public-private’ infrastructure partnerships

This being the age of public relations, the genteel term ‘public-private partnership’ is used instead of corporate plunder. A ‘partnership’ such deals may be, but it isn’t the public who gets the benefits.

We’ll be hearing more about so-called ‘public-private partnerships’ in coming weeks because the new US president, Donald Trump, is promoting these as the basis for a promised $1 trillion in new infrastructure investments.

But the new administration has also promised cuts to public spending. How to square this circle? It’s not difficult to discern when we recall the main policy of the Trump administration is to hand out massive tax cuts to big business and the wealthy, and provide them with subsidies.

Public-private partnerships are one of the surest ways of shoveling money into the gaping maws of corporate wallets, used, with varying names, by neoliberal governments around the world, particularly in Europe and North America.

The result has been disastrous – public services and infrastructure maintenance is consistently more expensive after privatization. Cuts to wages for workers who remain on the job and increased use of low-wage subcontractors are additional features of these privatizations.

The rationale for these partnerships is, similar to other neoliberal prescriptions, ideological – the private sector is supposedly always more efficient than government. A private company’s profit incentive will supposedly see to it that costs are kept under control, thereby saving money for taxpayers and transferring risk to the contractor.

In the real world, however, this works much differently. A government signs a long-term contract with a private enterprise to build and/or maintain infrastructure, under which the costs are borne by the contractor but the revenue goes to the contractor as well.

The contractor, of course, expects a profit from the arrangement. The government doesn’t – and thus corporate expectation of profits requires that revenues be increased and expenses must be cut. Less services and fewer employees means more profit for the contractor, and because the contractor is a private enterprise there’s no longer public accountability.

Public-private partnerships are nothing more than a variation on straightforward schemes to sell off public assets below cost, with working people having to pay more for reduced quality of service. A survey of these partnerships across Europe and North America will demonstrate this clearly, but first a quick look at the Trump administration’s plans.

Corporate subsidies, not $1 trillion in new spending

The use of the word ‘plans’ is rather loose here. No more than the barest outline of a plan has been articulated. The only direct mention of his intentions to jump-start investment in infrastructure is found in President Trump’s campaign web site.

In full, it states the plan “Leverages public-private partnerships, and private investments through tax incentives, to spur $1 trillion in infrastructure investment over ten years. It is revenue neutral.”

The administration’s official White House web site’s sole mention of infrastructure is an announcement approving the Keystone XL and Dakota Access pipelines without environmental reviews, and an intention to expedite environmental reviews for “high priority infrastructure projects.”

Wilbur Ross, an investment banker who buys companies and then takes away pensions and medical benefits so he can flip his companies for a big short-term profit, and who is President Trump’s pick for commerce secretary, along with a conservative economics professor, Peter Navarro, have recommended the Trump administration allocate $137 billion in tax credits for private investors who underwrite infrastructure projects.

The two estimate that over ten years the credits could spur $1 trillion in investment. So the new administration won’t actually spend $1 trillion to fix the country’s badly decaying infrastructure. It hopes to encourage private capital to do so through tax cuts.

There is a catch here – private capital is only going to invest if a steady profit can be extracted. Writing in the New Republic, David Dayen put this plainly:

“Private operators will only undertake projects if they promise a revenue stream. You may end up with another bridge in New York City or another road in Los Angeles, which can be monetized. But someplace that actually needs infrastructure investment is more dicey without user fees.

“So the only way to entice private-sector actors into rebuilding Flint, Michigan’s water system, for example, is to give them a cut of the profits in perpetuity. That’s what Chicago did when it sold off 36,000 parking meters to a Wall Street-led investor group. Users now pay exorbitant fees to park in Chicago, and city government is helpless to alter the rates.”

The Trump plan appears to go beyond even the ordinary terms of public-private partnerships because it would transfer money to developers with no guarantee at all that net new investments are made, according to an Economic Policy Institute analysis. The EPI report asks several questions:

“[I]t appears to be a plan to give tax credits to private financiers and developers, period. The lack of details here are daunting and incredibly important. For starters, we don’t know if the tax credit would be restricted to new investment, or if investors in already existing [public-private partnerships] are eligible for the credit.

“If private investors in already existing PPP arrangements are eligible, how do we ensure these tax credits actually induce net new investments rather than just transferring taxpayer largesse on operators of already-existing projects? Who decides which projects need to be built? How will the Trump administration provide needed infrastructure investments that are unlikely to be profitable for private providers (such as building lead-free water pipes in Flint, MI)?

“If we assume tax credits will be restricted (on paper, anyhow) to just new investment, how do we know the money is not just providing a windfall to already planned projects rather than inducing a net increase in how much infrastructure investment occurs?”

Critiques of this scheme can readily be found on the Right as well. For example, Douglas Holtz-Eakin, a former head of the Congressional Budget Office and economic adviser to John McCain’s 2008 presidential campaign, told The Associated Press:

“I don’t think that is a model that is going be viewed as successful or that you can use it for all of the infrastructure needs that the US has.”

Corporations plunder, people pay in Britain

Britain’s version of public-private partnerships are called ‘private finance initiatives’. A scheme concocted by the Conservative Party and enthusiastically adopted by the New Labour of Tony Blair and Gordon Brown, the results are disastrous. A 2015 report in The Independent reveals that the British government owes more than £222 billion to banks and businesses as a result of private finance initiatives. Jonathan Owen reports:

“The startling figure – described by experts as a ‘financial disaster’ – has been calculated as part of an Independent on Sunday analysis of Treasury data on more than 720 PFIs. The analysis has been verified by the National Audit Office. The headline debt is based on ‘unitary charges’ which start this month and will continue for 35 years. They include fees for services rendered, such as maintenance and cleaning, as well as the repayment of loans underwritten by banks and investment companies.

Responding to the findings, [British Trades Union Congress] General Secretary Frances O’Grady said: ‘Crippling PFI debts are exacerbating the funding crisis across our public services, most obviously in our National Health Service.’ “

Under private finance initiatives, a consortium of private-sector banks and construction firms finance, own, operate and lease the formerly public property back to the UK taxpayer over a period of 30 to 35 years. By no means do taxpayers receive value for these deals – and the total cost will likely rise far above the initial £222 billion cost. According to The Independent:

“The system has yielded assets valued at £56.5bn. But Britain will pay more than five times that amount under the terms of the PFIs used to create them, and in some cases be left with nothing to show for it, because the PFI agreed to is effectively a leasing agreement. Some £88bn has already been spent, and even if the projected cost between now and 2049/50 does not change, the total PFI bill will be in excess of £310bn. This is more than four times the budget deficit used to justify austerity cuts to government budgets and local services.”

The private firms can even flip their contracts for a faster payday. Four companies given 25-year contracts to build and maintain schools doubled their money by selling their shares in the schemes less than five years into the deals for a composite profit of £300 million. Clearly, these contracts were given at well below reasonable cost.

One of the most prominent privatization disasters was a £30 billion deal for Metronet to upgrade and maintain London’s subway system. The company failed, leaving taxpayers with a £2 billion bill because Transport for London, the government entity responsible for overseeing the subway, guaranteed 95% of the debt the private companies had taken out.

Then there is the example of England’s water systems, directly sold off. The largest, Thames Water, was acquired by a consortium led by the Australian bank Macquarie Group. This has been disastrous for rate payers but most profitable to the bank. An Open University study found that, in four of the five years studied, the consortium took out more money from the company than it made in post-tax profits, while fees increased and service declined.

As for the original sale itself, the water companies were sold on the cheap. Although details of the business can be discussed by “stakeholders”, the authors conclude, the privatization itself remains outside political debate, placing a “ring-fence” around the issues surrounding the privatization, such as the “politics of packaging and selling households as a captive revenue stream.”

The public has no choice when the water provider is a monopoly and thus no say in rates. Incredibly, Prime Minister Theresa May and the Tories intend to sell off more public services to Macquarie-led consortiums.

Corporations plunder, people pay across Europe

Privatization of water systems has not gone better in continental Europe. Cities in Germany and France, including Paris, have taken back their water after selling systems to corporations.

The city of Paris’ contracts with Veolia Environment and Suez Environment, expired in 2010; during the preceding 25 years water prices there had doubled, after accounting for inflation, according to a paper prepared by David Hall, a University of Greenwich researcher.

Despite the costs of taking back the water system, the city saved €35 million in the first year and was able to reduce water charges by 8%. Higher prices and reduced services have been the norm for privatized systems across France, according to Professor Hall’s study.

German cities have also ‘re-municipalized’ basic utilities. One example is the German city of Bergkamen (population about 50,000), which reversed its privatization of energy, water and other services. As a result of returning those to the public sector, the city now earns €3 million a year from the municipal companies set up to provide services, while reducing costs by as much as 30%.

Water is big business. Suez and Veolia both reported profits of more than €400 million for 2015. Not unrelated to this is the increasing prominence of bottled water. Bottled water is dominated by three of the world’s biggest companies: The Coca-Cola (Dasani), PepsiCo (Aquafina) and Nestlé (Poland Springs, Deer Park, Arrowhead and others).

So it’s perhaps not surprising that Nestlé Chairman Peter Brabeck-Letmathe infamously issued a video in which he declared the idea that water is a human right “extreme” and that water should instead have a “market value”.

One privatization that has not been reversed, however, is Goldman Sachs’ takeover of Denmark’s state-owned energy company Dong Energy. Despite strong popular opposition, the Danish government sold an 18% share in Dong Energy to Goldman Sachs in 2014, yet was given a veto over strategic decisions, essentially handing it control.

The investment bank was also given the right to sell back its shares for a guaranteed profit. Goldman Sachs has turned a huge profit already – two years after buying its share, Dong began selling shares on the stock market, and initial trading established a value for the company twice as high as it was valued for purposes of selling the shares to Goldman.

In other words, Goldman’s shares doubled in value in just two years – a $1.7 billion gain!

Danes have paid for this partial privatization in other ways as well. Taking advantage of the control granted it, Goldman demanded lower payments to Danish subcontractors and replaced some subcontractors who refused to use lower-paid workers.

Corporations plunder, people pay in Canada

Canada’s version of public-private partnerships has followed the same script. A report by the Canadian Centre for Policy Alternatives flatly declared that

“In every single project approved so far as a P3 in Ontario, the costs would have been lower through traditional procurement if they had not inflated by these calculations of the value of ‘risk.’ The calculations of risk could just as well have been pulled out of thin air – and they are not small amounts.”

Not that Ontario is alone here. Among the examples the Centre provides are:

  • a hospital, Brampton Civic, that cost the public $200 million more than if it had been publicly financed and built directly by Ontario;
  • the Sea-to-Sky Highway in British Columbia that will cost taxpayers $220 million more than if it had been financed and operated publicly;
  • bailouts of the companies operating the city of Ottawa’s recreational arenas;
  • and a Université de Québec à Montréal project that doubled the cost to $400 million.

A separate study by University of Toronto researchers of 28 Ontario public-private partnerships found they cost an average of 16% more than conventional contracts.

Corporations plunder, people pay in the United States

In the United States, a long-time goal of the Republican Party has been to privatize the Postal Service. To facilitate this, a congressional bill signed into law in 2006 required the Postal Service to pre-fund its pension costs for the next 75 years in only 10 years.

This is unheard of. Certainly no private business would or could do such a thing. This preposterous requirement saddled the Postal Service with a $16 billion deficit. The goal here is to weaken the post office in order to manufacture a case that the government is incapable of running it.

The city of Chicago has found that there are many bad consequences of public-private partnerships beyond the monetary.

In 2008, Chicago gave a 75-year lease on its parking meters to Morgan Stanley for $1 billion. Shortly afterward, the city’s inspector general concluded the value of the meter lease was $2 billion. Parking rates skyrocketed, and the terms of the lease protecting Morgan Stanley’s investment created new annual costs for the city, according to a Next City report.

That report noted that plans for express bus lanes, protected bike lanes and street changes to enhance pedestrian safety are complicated by the fact that each of these projects requires removing metered parking spaces. Removing meters requires the city to make penalty payments to Morgan Stanley. Even removals for street repairs requires compensation. The Next City report notes that the city lost a $61 million lawsuit filed by the investment bank because of street closures.

Nor have water systems been exempt from privatization schemes. A study by Food & Water Watch found that:

  • Investor-owned utilities typically charge 33% more for water and 63% more for sewer service than local government utilities.
  • After privatization, water rates increase at about three times the rate of inflation, with an average increase of 18% every other year.
  • Corporate profits, dividends and income taxes can add 20 to 30% to operation and maintenance costs.

Pure ideology drives these privatization schemes. The Federal Reserve poured $4.1 trillion into buying bonds, which did little more than inflate a stock-market bubble, while the investment needed to rebuild US water systems, schools and dams, plus clean up Superfund sites and eliminate student debt is less at a combined $3.4 trillion.

What if that Federal Reserve money had gone to those instead?

‘Public investment to create public profit’

Given its billionaire leadership, the Trump administration’s plans for public-private partnerships will not lead to better results, and may well be even worse. Michael Hudson recently summarized what is likely coming in this way:

“Mr. Trump wants to turn the US economy into the kind of real estate development that has made him so rich in New York. It will make his fellow developers rich, and it will make the banks that finance this infrastructure rich, but the people are going to have to pay for it in a much higher cost for transportation, much higher cost for all the infrastructure that he’s proposing. So I think you could call Trump’s plan ‘public investment to create private profit.’ That’s really his plan in a summary, it looks to me.”

This makes no sense as public policy. But it is consistent with the desire of capitalists to continually extract higher profits from any and all human activity.

Similar to governments handing over their sovereignty to multi-national corporations in so-called ‘free trade’ deals that facilitate the movement of production to locales with ever lower wages and weaker laws, public-private partnerships represent a plundering of the public sector for private profit, and government surrender of public goods. All this is a reflection of the imbalance of power in capitalist countries.

This is ‘the market’ in action – and the market is nothing more than the aggregate interests of the most powerful industrialists and financiers. It also reflects that as capitalist markets mature and capital runs out of places into which to expand, ongoing competitive pressures will drive corporate leaderships to reduce expenses (particularly wages) and move into new lines of business.

Taking over what had been the public sector is one way of achieving this, especially if public goods can be bought below fair market value and guarantees of profits extracted.

The ruthless logic of capitalism is that a commodity goes to those who can pay the most, regardless of whether it is something essential to human life.

 


 

Pete Dolack is an activist, writer, poet and photographer, and writes on Systemic Disorder. His book ‘It’s Not Over: Lessons from the Socialist Experiment‘, a study of attempts to create societies on a basis other than capitalism, was recently published by Zero Books.

This article was originally published on Systemic Disorder.

 

UK researchers discover a new species of primate from Africa’s Angolan rainforests

An international team of researchers led by Oxford Brookes University has revealed a new species of primate in a paper published by the American Journal of Physical Anthropology.

The primate which is the largest known dwarf galago or bushbaby, has been named the Angolan dwarf galago, named after the only country where it is known to occur.

The news comes after primate conservation experts called for urgent action to protect the world’s dwindling primate populations last month.

Lead author Magdalena Svensson from Oxford Brookes University said: “When we first encountered the new species in Kumbira Forest in north-western Angola, we heard a distinctive ‘crescendo’ call similar to that of a tiny galago, but upon seeing one, we were struck by its remarkably large size.

“Until now, call types have been the most reliable way to distinguish galago species, and to find one that did not match what we expected was very exciting.”

Dr Russell Mittermeier of Conservation International said of the report: “This new Galago species is a very exciting discovery. It is only the fifth new primate described from the African mainland since 2000 and only the second species of galago. What is more, it is from Angola, where there has been very little primate research to date.”

The team collected photographs, vocalisation recordings and behavioural information on live individuals in the wild as well as conducting more details measurements on museum specimens, and concluded that this species is unique in terms of its loud calls, fur colouration, and body size, which is approximately three times the size than the diminutive 80 g of typical dwarf galagos.

Despite being similar to the genus Galago in size, the structure of its calls and the elongated shape of its skull linked it to the group of tiny West African dwarf galagos (genus Galagoides) – thus making the new species a giant among dwarfs.

The morphology and calls of this new species are so unique that there was no need to resort to genetic techniques to verify it further. Renowned galago taxonomist and co-author Professor Judith Masters of Nelson Mandela Metropolitan University in South Africa said: “The uncovering of this species is characteristic of the return of real biology.

“Although DNA has yielded new and sometimes highly contestable specimens, in the case of this new galago, the differences are obvious for all to see.”

Galagos are small nocturnal primates that are widespread over sub Sub-Saharan Africa. Over the last five decades, the number of species recognised has slowly climbed from 6 to 19 species including this new species. Similarly, among lemurs, the primates of Madagascar, the number of species described has risen from less than 30 to more than 100 in the same time.

Team member, Professor Simon Bearder from Oxford Brookes University noted: “We should not be surprised by the discovery of unknown species. Estimates of the number of species on earth vary between 5 million and 50 million, of which less than 2 million have been named, so there is a long way to go.”

Until now, civil unrest and the difficulty of working at night have stood in the way of understanding the true nocturnal diversity of the African rainforests, and this species is one example of what lies in wait to be discovered.

Co-author Professor Anna Nekaris of Oxford Brookes University said “It is no surprise to find not only a new species, but one with such distinctive body proportions, making it really a whole new kind of bushbaby. We have been seeing this emerging diversity in Madagascar over the last two decades, yet the nocturnal species of Africa and Asia remain still comparatively unexplored and this giant dwarf galago is just the tip of the iceberg in new discoveries.”

The discovery of this amazing primate does not ensure its future protection, according to co-author Elena Bersacola of Oxford Brookes University: “We still know very little about the Angolan galago, what they eat, their social interactions, how and if they are able to adapt to climate and habitat changes.

“We know that they occur in a relative wide variety of habitats and elevation gradients. They are present in dry savannah-woodland habitats, but their numbers are much higher within tall forests at higher altitudes.”

Deforestation due to commercial logging is increasingly rapidly throughout the Angolan Escarpment forests. The fact that these are the very forests that harbour a newly discovered, endemic primate highlights the importance of the Angolan ecosystems and sends a clear message about the urgent need for conservation measures in this region.

 

 

 

 

How a toxic spill and a book launched Britain’s environmental movement – the forgotten story

Today we take for granted an awareness of environmental matters, but this was not always the case.

It could be said that in Britain there was a moment when that environmental consciousness arrived.

When in 1963 some farm animals in the parish of Smarden in Kent became sick and died, suspicions fell on a nearby pesticide factory run by a division of Rentokil Laboratories.

The events that followed amounted to one of the first environmental scandals in contemporary British history – one that would galvanise the environmental movement.

It became clear that the factory, a large shed in the middle of farmland, was manufacturing toxic chemicals and that a leak of one of these, fluoroacetamide, led to Britain’s first documented livestock mass poisoning.

The incident might have passed by as only a historical footnote, but instead the Smarden leak quickly became a national concern with international implications, and has cast a long shadow across the approach to intensive agriculture in the UK in the years since.

Part of why this incident had such major repercussions is due to timing, coming as it did at the same time as American writer Rachel Carson’s Silent Spring was first published in the UK. Seen as the first polemic of the environmental movement, Carson’s book was a significant catalyst to the emergence of modern environmentalism on both sides of the Atlantic.

An ecological narrative arrives

Local veterinarian Douglas Good had unique knowledge of fluoride poisoning having worked with a leading expert in South Africa and on cases of animals affected by industrial fluoride poisoning in England.

Taking his cue from Carson, Good disseminated what he called a ‘short story‘ about the incident to the press, putting across the Smarden incident as not simply a local industrial waste spill, but as deadly evidence of the pervasiveness of toxic pesticides in the environment.

Acknowledging his inspiration, Good concluded his narrative by declaring that the “subject of Rachel Carson’s book Silent Spring had become a reality here in the heart of the Garden of England.”

The media placed the Smarden incident within a Carson-inspired ecological critique of the dangers of an intensive, industrial approach to agriculture. Good, like Carson, was a trained scientist. Like her, he raised concerns about technocracy – governmental administration underpinned by scientific and technological expertise.

As the Smarden incident unfolded, it highlighted the risks and hazards which accompanied the government’s commitment to industrial development. Tensions arose between veterinarians, government scientists, local government, media, and business interests.

A chemical double agent

While the use of inorganic poisons as pesticides stretches back to antiquity, large-scale use of organic pesticides is a 20th-century phenomenon. Fluoroacetamide is a toxic organic pesticide with nefarious origins.

The two world wars fostered a massive growth of the chemical industry, and fluoroacetamide was a pesticide that arose from the search for lethal chemical weapons. After the war it was approved for use as a poison for use against rodents and insects – it was not uncommon for the science, technology, institutions, and language of chemical warfare to be redirected to the problem of agricultural pest control during peacetime.

But by the time of the Smarden incident in the early 1960s, the origin of these chemicals was seen as damning evidence of the perniciousness of the military-industrial complex and its impact on the environment.

Another case of fluoroacetamide poisonings, in Merthyr Tydfil, Wales, came to light in September 1963, in which contaminated pet food resulted in the death of 75 to 100 dogs and cats – effectively shifting fears from remote farmers’ fields into people’s homes. When the cows, dogs and guinea pigs used as subjects to test the extent of the environmental damage died, those fears grew.

The government was consistently reluctant to inform the public about the strong circumstantial evidence of fluoroactemide poisoning. Declaring it a one-off industrial accident, the government avoided discussion of the actual widespread use of these chemicals as pesticides.

But the death of further animals and a suspected case of human poisoning forced the government’s hand: on February 7, 1964, fluoroacetamide was banned as an insecticide. The government announced that 1,800 tonnes of polluted soil from the factory site would be removed and dumped at sea.

Even so, the Ministry of Agriculture, Fisheries and Food did not permit farmers to use land around the site of the spill until March 1965, when government scientists found no traces of fluoroacetamide.

A persistent memory

Much like persistent pesticides, the Smarden incident lingered in people’s memories as a cautionary tale about science, government, and the industrialisation of agriculture. These memories resurfaced when in 1985 farmers at Smarden discovered the first case of bovine spongiform encephalopathy (BSE) in Kent and a number of further cases followed.

Twelve years later, a perceived cluster of cases of new variant Creutzfeldt-Jakob Disease (vCJD) in the Smarden area led to speculation that this human form of BSE was caused by excessive exposure to pesticides. Reports in the press suggested that the residents of Smarden suspected the incident had been some sort of government-controlled experiment and subsequent cover-up which had produced BSE.

While vCJD was subsequently tied to the practice of feeding cows meal containing infected cows’ meat, bone and brain matter, these environmental controversies ultimately made disputes among experts publicly visible, and this caused a significant change in the public’s perceptions of science.

Smarden and its legacy drove the emergence of modern environmentalism in Britain, through a confluence of a concern for public health and animal welfare, the desire to conserve the countryside, and an emergent ecological approach – such as advanced by the Soil Association, founded in 1946.

It also revealed the tension caused by conflicts between what we would now call environmentalism and scientific expertise in a modern world that now routinely deploys potentially life and planet-threatening technology.

New activist movements have helped make contested expertise publicly visible, and this has contributed to an erosion of trust in traditional professions and in public authorities.

 


 

John Clark is Senior Lecturer in History, University of St Andrews.The Conversation

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

 

Trump’s multi-trillion dollar fraud on America: ‘public-private’ infrastructure partnerships

This being the age of public relations, the genteel term ‘public-private partnership’ is used instead of corporate plunder. A ‘partnership’ such deals may be, but it isn’t the public who gets the benefits.

We’ll be hearing more about so-called ‘public-private partnerships’ in coming weeks because the new US president, Donald Trump, is promoting these as the basis for a promised $1 trillion in new infrastructure investments.

But the new administration has also promised cuts to public spending. How to square this circle? It’s not difficult to discern when we recall the main policy of the Trump administration is to hand out massive tax cuts to big business and the wealthy, and provide them with subsidies.

Public-private partnerships are one of the surest ways of shoveling money into the gaping maws of corporate wallets, used, with varying names, by neoliberal governments around the world, particularly in Europe and North America.

The result has been disastrous – public services and infrastructure maintenance is consistently more expensive after privatization. Cuts to wages for workers who remain on the job and increased use of low-wage subcontractors are additional features of these privatizations.

The rationale for these partnerships is, similar to other neoliberal prescriptions, ideological – the private sector is supposedly always more efficient than government. A private company’s profit incentive will supposedly see to it that costs are kept under control, thereby saving money for taxpayers and transferring risk to the contractor.

In the real world, however, this works much differently. A government signs a long-term contract with a private enterprise to build and/or maintain infrastructure, under which the costs are borne by the contractor but the revenue goes to the contractor as well.

The contractor, of course, expects a profit from the arrangement. The government doesn’t – and thus corporate expectation of profits requires that revenues be increased and expenses must be cut. Less services and fewer employees means more profit for the contractor, and because the contractor is a private enterprise there’s no longer public accountability.

Public-private partnerships are nothing more than a variation on straightforward schemes to sell off public assets below cost, with working people having to pay more for reduced quality of service. A survey of these partnerships across Europe and North America will demonstrate this clearly, but first a quick look at the Trump administration’s plans.

Corporate subsidies, not $1 trillion in new spending

The use of the word ‘plans’ is rather loose here. No more than the barest outline of a plan has been articulated. The only direct mention of his intentions to jump-start investment in infrastructure is found in President Trump’s campaign web site.

In full, it states the plan “Leverages public-private partnerships, and private investments through tax incentives, to spur $1 trillion in infrastructure investment over ten years. It is revenue neutral.”

The administration’s official White House web site’s sole mention of infrastructure is an announcement approving the Keystone XL and Dakota Access pipelines without environmental reviews, and an intention to expedite environmental reviews for “high priority infrastructure projects.”

Wilbur Ross, an investment banker who buys companies and then takes away pensions and medical benefits so he can flip his companies for a big short-term profit, and who is President Trump’s pick for commerce secretary, along with a conservative economics professor, Peter Navarro, have recommended the Trump administration allocate $137 billion in tax credits for private investors who underwrite infrastructure projects.

The two estimate that over ten years the credits could spur $1 trillion in investment. So the new administration won’t actually spend $1 trillion to fix the country’s badly decaying infrastructure. It hopes to encourage private capital to do so through tax cuts.

There is a catch here – private capital is only going to invest if a steady profit can be extracted. Writing in the New Republic, David Dayen put this plainly:

“Private operators will only undertake projects if they promise a revenue stream. You may end up with another bridge in New York City or another road in Los Angeles, which can be monetized. But someplace that actually needs infrastructure investment is more dicey without user fees.

“So the only way to entice private-sector actors into rebuilding Flint, Michigan’s water system, for example, is to give them a cut of the profits in perpetuity. That’s what Chicago did when it sold off 36,000 parking meters to a Wall Street-led investor group. Users now pay exorbitant fees to park in Chicago, and city government is helpless to alter the rates.”

The Trump plan appears to go beyond even the ordinary terms of public-private partnerships because it would transfer money to developers with no guarantee at all that net new investments are made, according to an Economic Policy Institute analysis. The EPI report asks several questions:

“[I]t appears to be a plan to give tax credits to private financiers and developers, period. The lack of details here are daunting and incredibly important. For starters, we don’t know if the tax credit would be restricted to new investment, or if investors in already existing [public-private partnerships] are eligible for the credit.

“If private investors in already existing PPP arrangements are eligible, how do we ensure these tax credits actually induce net new investments rather than just transferring taxpayer largesse on operators of already-existing projects? Who decides which projects need to be built? How will the Trump administration provide needed infrastructure investments that are unlikely to be profitable for private providers (such as building lead-free water pipes in Flint, MI)?

“If we assume tax credits will be restricted (on paper, anyhow) to just new investment, how do we know the money is not just providing a windfall to already planned projects rather than inducing a net increase in how much infrastructure investment occurs?”

Critiques of this scheme can readily be found on the Right as well. For example, Douglas Holtz-Eakin, a former head of the Congressional Budget Office and economic adviser to John McCain’s 2008 presidential campaign, told The Associated Press:

“I don’t think that is a model that is going be viewed as successful or that you can use it for all of the infrastructure needs that the US has.”

Corporations plunder, people pay in Britain

Britain’s version of public-private partnerships are called ‘private finance initiatives’. A scheme concocted by the Conservative Party and enthusiastically adopted by the New Labour of Tony Blair and Gordon Brown, the results are disastrous. A 2015 report in The Independent reveals that the British government owes more than £222 billion to banks and businesses as a result of private finance initiatives. Jonathan Owen reports:

“The startling figure – described by experts as a ‘financial disaster’ – has been calculated as part of an Independent on Sunday analysis of Treasury data on more than 720 PFIs. The analysis has been verified by the National Audit Office. The headline debt is based on ‘unitary charges’ which start this month and will continue for 35 years. They include fees for services rendered, such as maintenance and cleaning, as well as the repayment of loans underwritten by banks and investment companies.

Responding to the findings, [British Trades Union Congress] General Secretary Frances O’Grady said: ‘Crippling PFI debts are exacerbating the funding crisis across our public services, most obviously in our National Health Service.’ “

Under private finance initiatives, a consortium of private-sector banks and construction firms finance, own, operate and lease the formerly public property back to the UK taxpayer over a period of 30 to 35 years. By no means do taxpayers receive value for these deals – and the total cost will likely rise far above the initial £222 billion cost. According to The Independent:

“The system has yielded assets valued at £56.5bn. But Britain will pay more than five times that amount under the terms of the PFIs used to create them, and in some cases be left with nothing to show for it, because the PFI agreed to is effectively a leasing agreement. Some £88bn has already been spent, and even if the projected cost between now and 2049/50 does not change, the total PFI bill will be in excess of £310bn. This is more than four times the budget deficit used to justify austerity cuts to government budgets and local services.”

The private firms can even flip their contracts for a faster payday. Four companies given 25-year contracts to build and maintain schools doubled their money by selling their shares in the schemes less than five years into the deals for a composite profit of £300 million. Clearly, these contracts were given at well below reasonable cost.

One of the most prominent privatization disasters was a £30 billion deal for Metronet to upgrade and maintain London’s subway system. The company failed, leaving taxpayers with a £2 billion bill because Transport for London, the government entity responsible for overseeing the subway, guaranteed 95% of the debt the private companies had taken out.

Then there is the example of England’s water systems, directly sold off. The largest, Thames Water, was acquired by a consortium led by the Australian bank Macquarie Group. This has been disastrous for rate payers but most profitable to the bank. An Open University study found that, in four of the five years studied, the consortium took out more money from the company than it made in post-tax profits, while fees increased and service declined.

As for the original sale itself, the water companies were sold on the cheap. Although details of the business can be discussed by “stakeholders”, the authors conclude, the privatization itself remains outside political debate, placing a “ring-fence” around the issues surrounding the privatization, such as the “politics of packaging and selling households as a captive revenue stream.”

The public has no choice when the water provider is a monopoly and thus no say in rates. Incredibly, Prime Minister Theresa May and the Tories intend to sell off more public services to Macquarie-led consortiums.

Corporations plunder, people pay across Europe

Privatization of water systems has not gone better in continental Europe. Cities in Germany and France, including Paris, have taken back their water after selling systems to corporations.

The city of Paris’ contracts with Veolia Environment and Suez Environment, expired in 2010; during the preceding 25 years water prices there had doubled, after accounting for inflation, according to a paper prepared by David Hall, a University of Greenwich researcher.

Despite the costs of taking back the water system, the city saved €35 million in the first year and was able to reduce water charges by 8%. Higher prices and reduced services have been the norm for privatized systems across France, according to Professor Hall’s study.

German cities have also ‘re-municipalized’ basic utilities. One example is the German city of Bergkamen (population about 50,000), which reversed its privatization of energy, water and other services. As a result of returning those to the public sector, the city now earns €3 million a year from the municipal companies set up to provide services, while reducing costs by as much as 30%.

Water is big business. Suez and Veolia both reported profits of more than €400 million for 2015. Not unrelated to this is the increasing prominence of bottled water. Bottled water is dominated by three of the world’s biggest companies: The Coca-Cola (Dasani), PepsiCo (Aquafina) and Nestlé (Poland Springs, Deer Park, Arrowhead and others).

So it’s perhaps not surprising that Nestlé Chairman Peter Brabeck-Letmathe infamously issued a video in which he declared the idea that water is a human right “extreme” and that water should instead have a “market value”.

One privatization that has not been reversed, however, is Goldman Sachs’ takeover of Denmark’s state-owned energy company Dong Energy. Despite strong popular opposition, the Danish government sold an 18% share in Dong Energy to Goldman Sachs in 2014, yet was given a veto over strategic decisions, essentially handing it control.

The investment bank was also given the right to sell back its shares for a guaranteed profit. Goldman Sachs has turned a huge profit already – two years after buying its share, Dong began selling shares on the stock market, and initial trading established a value for the company twice as high as it was valued for purposes of selling the shares to Goldman.

In other words, Goldman’s shares doubled in value in just two years – a $1.7 billion gain!

Danes have paid for this partial privatization in other ways as well. Taking advantage of the control granted it, Goldman demanded lower payments to Danish subcontractors and replaced some subcontractors who refused to use lower-paid workers.

Corporations plunder, people pay in Canada

Canada’s version of public-private partnerships has followed the same script. A report by the Canadian Centre for Policy Alternatives flatly declared that

“In every single project approved so far as a P3 in Ontario, the costs would have been lower through traditional procurement if they had not inflated by these calculations of the value of ‘risk.’ The calculations of risk could just as well have been pulled out of thin air – and they are not small amounts.”

Not that Ontario is alone here. Among the examples the Centre provides are:

  • a hospital, Brampton Civic, that cost the public $200 million more than if it had been publicly financed and built directly by Ontario;
  • the Sea-to-Sky Highway in British Columbia that will cost taxpayers $220 million more than if it had been financed and operated publicly;
  • bailouts of the companies operating the city of Ottawa’s recreational arenas;
  • and a Université de Québec à Montréal project that doubled the cost to $400 million.

A separate study by University of Toronto researchers of 28 Ontario public-private partnerships found they cost an average of 16% more than conventional contracts.

Corporations plunder, people pay in the United States

In the United States, a long-time goal of the Republican Party has been to privatize the Postal Service. To facilitate this, a congressional bill signed into law in 2006 required the Postal Service to pre-fund its pension costs for the next 75 years in only 10 years.

This is unheard of. Certainly no private business would or could do such a thing. This preposterous requirement saddled the Postal Service with a $16 billion deficit. The goal here is to weaken the post office in order to manufacture a case that the government is incapable of running it.

The city of Chicago has found that there are many bad consequences of public-private partnerships beyond the monetary.

In 2008, Chicago gave a 75-year lease on its parking meters to Morgan Stanley for $1 billion. Shortly afterward, the city’s inspector general concluded the value of the meter lease was $2 billion. Parking rates skyrocketed, and the terms of the lease protecting Morgan Stanley’s investment created new annual costs for the city, according to a Next City report.

That report noted that plans for express bus lanes, protected bike lanes and street changes to enhance pedestrian safety are complicated by the fact that each of these projects requires removing metered parking spaces. Removing meters requires the city to make penalty payments to Morgan Stanley. Even removals for street repairs requires compensation. The Next City report notes that the city lost a $61 million lawsuit filed by the investment bank because of street closures.

Nor have water systems been exempt from privatization schemes. A study by Food & Water Watch found that:

  • Investor-owned utilities typically charge 33% more for water and 63% more for sewer service than local government utilities.
  • After privatization, water rates increase at about three times the rate of inflation, with an average increase of 18% every other year.
  • Corporate profits, dividends and income taxes can add 20 to 30% to operation and maintenance costs.

Pure ideology drives these privatization schemes. The Federal Reserve poured $4.1 trillion into buying bonds, which did little more than inflate a stock-market bubble, while the investment needed to rebuild US water systems, schools and dams, plus clean up Superfund sites and eliminate student debt is less at a combined $3.4 trillion.

What if that Federal Reserve money had gone to those instead?

‘Public investment to create public profit’

Given its billionaire leadership, the Trump administration’s plans for public-private partnerships will not lead to better results, and may well be even worse. Michael Hudson recently summarized what is likely coming in this way:

“Mr. Trump wants to turn the US economy into the kind of real estate development that has made him so rich in New York. It will make his fellow developers rich, and it will make the banks that finance this infrastructure rich, but the people are going to have to pay for it in a much higher cost for transportation, much higher cost for all the infrastructure that he’s proposing. So I think you could call Trump’s plan ‘public investment to create private profit.’ That’s really his plan in a summary, it looks to me.”

This makes no sense as public policy. But it is consistent with the desire of capitalists to continually extract higher profits from any and all human activity.

Similar to governments handing over their sovereignty to multi-national corporations in so-called ‘free trade’ deals that facilitate the movement of production to locales with ever lower wages and weaker laws, public-private partnerships represent a plundering of the public sector for private profit, and government surrender of public goods. All this is a reflection of the imbalance of power in capitalist countries.

This is ‘the market’ in action – and the market is nothing more than the aggregate interests of the most powerful industrialists and financiers. It also reflects that as capitalist markets mature and capital runs out of places into which to expand, ongoing competitive pressures will drive corporate leaderships to reduce expenses (particularly wages) and move into new lines of business.

Taking over what had been the public sector is one way of achieving this, especially if public goods can be bought below fair market value and guarantees of profits extracted.

The ruthless logic of capitalism is that a commodity goes to those who can pay the most, regardless of whether it is something essential to human life.

 


 

Pete Dolack is an activist, writer, poet and photographer, and writes on Systemic Disorder. His book ‘It’s Not Over: Lessons from the Socialist Experiment‘, a study of attempts to create societies on a basis other than capitalism, was recently published by Zero Books.

This article was originally published on Systemic Disorder.