A New Front in Asia’s Water War

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For decades, China has been dragging its neighbors into high-stakes games of geopolitical poker over water-related issues. But the country’s politically motivated decision to withhold hydrological data from India amounts to an escalation of China’s efforts to exploit its status as the world’s hydro-hegemon to gain strategic leverage over its neighbors.

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BRAHMA CHELLANEYProject Syndicate

China has long regarded freshwater as a strategic weapon — one that the country’s leaders have no compunction about wielding to advance their foreign-policy goals. After years of using its chokehold on almost every major transnational river system in Asia to manipulate water flows themselves, China is now withholding data on upstream flows to put pressure on downstream countries, particularly India.

For decades, China has been dragging its neighbors into high-stakes games of geopolitical poker over water-related issues. Thanks to its forcible annexation of Tibet and other non-Han Chinese ethnic homelands — territories that comprise some 60% of its landmass — China is the world’s unrivaled hydro-hegemon. It is the source of cross-border riparian flows to more countries than any other state.

In recent years, China has worked hard to exploit that status to increase its leverage over its neighbors, relentlessly building upstream dams on international rivers. China is now home to more dams than the rest of the world combined, and the construction continues, leaving downstream neighbors — especially the vulnerable lower Mekong basin states, Nepal, and Kazakhstan — essentially at China’s mercy.

So far, China has refused to enter into a water-sharing treaty with a single country. It does, however, share some hydrological and meteorological data — essential to enable downstream countries to foresee and plan for floods, thereby protecting lives and reducing material losses.

Yet, this year, China decided to withhold such data from India, undermining the efficacy of India’s flood early-warning systems — during Asia’s summer monsoon season, no less. As a result, despite below-normal monsoon rains this year in India’s northeast, through which the Brahmaputra River flows after leaving Tibet and before entering Bangladesh, the region faced unprecedented flooding, with devastating consequences, especially in Assam state.

China’s decision to withhold crucial data is not only cruel; it also breaches the country’s international obligations. China is one of just three countries that voted against the 1997 United Nations Watercourse Convention, which called for the regular exchange of hydrological and other data between co-basin states. But China did enter into a five-year bilateral accord, which expires next year, requiring it to transfer to India hydrological and meteorological data daily from three Brahmaputra-monitoring stations in Tibet during the risky flood season, from May 15 to October 15. A similar agreement, reached in 2015, covers the Sutlej, another flood-prone river. Both accords arose after flash floods linked to suspected discharges from Chinese projects in Tibet repeatedly ravaged India’s Arunachal and Himachal states.

Unlike some other countries, which offer hydrological data to their downstream counterparts for free, China does so only for a price. (The Watercourse Convention would have required that no charges be levied, unless the data or information was “not readily available” — a rule that may also have contributed to China’s “no” vote.)

But it was a price India was willing to pay. And this year, as always, India sent the agreed amount. Yet it received no data, with the Chinese foreign ministry claiming after almost four months that upstream stations were being “upgraded” or “renovated.” That claim was spurious: China did supply data on the Brahmaputra to Bangladesh.

Three weeks earlier, the state-controlled newspaper Global Times offered a more plausible explanation for China’s failure to deliver the promised data to India: the data transfer had been intentionally halted, owing to India’s supposed infringement on Chinese territorial sovereignty in a dispute over the remote Himalayan region of Doklam. For much of the summer, that dispute took the form of a border standoff where Bhutan, Tibet, and the Indian state of Sikkim meet.

But even before the dispute flared in mid-June, China was seething over India’s boycott of its May 14-15 summit promoting the much-vaunted “Belt and Road” initiative. The denial of data apparently began as an attempt to punish India for condemning China’s massive, cross-border infrastructure agenda as an opaque, neocolonial enterprise. China’s desire to punish India was then reinforced by the Doklam standoff.

For China, it seems, international agreements stop being binding when they are no longer politically convenient. This reading is reinforced by China’s violations of its 1984 pact with the United Kingdom, under which China gained sovereignty over Hong Kong in 1997. China claims that the agreement, based on the formula “one country, two systems,” had lost “practical significance” over the last 20 years.

Were the roles reversed, a downstream China would have stridently accused an upstream India of exacerbating flood-related death and destruction by breaching its international obligations. But just as China has unilaterally and aggressively asserted its territorial and maritime claims in Asia, it is using the reengineering of cross-border riparian flows and denial of hydrological data to deepen its regional power.

In fact, China’s cutoff of water data, despite the likely impact on vulnerable civilian communities, sets a dangerous precedent of indifference to humanitarian considerations. It also highlights how China is fashioning unconventional tools of coercive diplomacy, whose instruments already range from informally boycotting goods from a targeted country to halting strategic exports (such as of rare-earth minerals) and suspending Chinese tourist travel.

Now, by seizing control over water — a resource vital to millions of lives and livelihoods — China can hold another country hostage without firing a single shot. In a water-stressed Asia, taming China’s hegemonic ambition is now the biggest strategic challenge.

© Project Syndicate, 2017.

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China’s water war on India by other means

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Brahma Chellaney, The Hindustan Times

Tibet, a treasure-trove of natural resources, including water and precious metals, is a great strategic asset for China in its pursuit of an often-improvident style of economic growth. The sprawling Tibetan plateau also arms Beijing with water leverage over downstream countries because it is the starting point for most of Asia’s great rivers, many of which are being heavily dammed just before they cross into neighbouring nations.

China is sharpening its leverage with co-riparian India. Water indeed has emerged as a new divide in Sino-Indian relations, as Beijing quietly and opaquely builds dams, barrages and other structures on rivers flowing to India. It spurned then Prime Minister Manmohan Singh’s 2013 proposal that the two countries enter into a water treaty or establish an intergovernmental institution to define mutual rights and responsibilities on shared rivers. The flash floods that ravaged Himachal Pradesh and Arunachal Pradesh between 2000 and 2005 were linked to the unannounced releases from rain-swollen Chinese dams and barrages.

At a time when the Doklam face-off has entered its third month and the risk of a Chinese military attack on India is growing, there is more troubling news: Beijing is fashioning water into a political weapon by denying India flood-related hydrological data since May, even as major flooding has hit the region from Assam to Uttar Pradesh. Data on upstream river flows is essential for flood forecasting and warning in order to save lives and reduce material losses. China’s data denial crimps flash flood modelling in India.

By embarking on a dangerous game of water poker, Beijing has demonstrated how the denial of hydrological data in the critically important monsoon season amounts to the use of water as a political tool against a downstream country. Indeed, even while supplying data in past years, China’s lack of transparency raised questions. After all, like rice traded on the world market, hydrological data comes in different grades and qualities — from good, reliable data to inferior data and broken data.

China’s latest action actually violates two bilateral MOUs of 2013 and a 2014 accord, which obligate it to transfer hydrological data to India from three upstream monitoring stations in Tibet every year from May 15 to October 15. No data has been transferred thus far this year, although India, in keeping with the MOUs, paid for the data in advance. While China sells hydrological data to downriver countries, India provides such data free to both its downstream neighbours — Pakistan and Bangladesh.

China has long displayed contempt for international law. No bilateral accord seems to have binding force for it once its immediate purpose has passed, as Beijing recently highlighted by trashing the 1984 Sino-British treaty that paved the way for Hong Kong’s handover in 1997. China said that pact had lost “practical meaning” because 20 years had passed since Hong Kong’s return. Yet it selectively invokes a 19th-century, colonial-era accord to justify its Doklam intrusion, while ignoring its own violations — cited by Bhutan and India — of more recent bilateral agreements not to disturb the territorial status quo.

India should not be downplaying China’s breach of commitment to supply hydrological data from May 15. Yet, for two months, the ministry of external affairs hid China’s contravention, which began much before the Doklam standoff. When MEA finally admitted China’s breach of obligation, it simultaneously sought to shield Beijing by saying there could be a “technical reason” for non-transfer of data (just as MEA sought to obscure China’s Aug. 15 twin raids in the Lake Pangong area by gratuitously telling the Financial Times that “no commonly delineated boundary” exists there). How can a technical hitch explain data withholding from three separate stations for over two months? MEA also went out of its way to reject a linkage between China’s data denial and the flooding, for example, in Assam. Wouldn’t the timely transmission of data have generated flood warnings and thus helped save lives and movable assets?

Had China been in India’s place, it would have promptly raised a hue and cry about the commitment violation and linked it to the downstream floods and deaths.

More fundamentally, the Doklam standoff, the Chinese hydro-engineering projects to reengineer cross-border river flows, the denial of hydrological data, and China’s claims to vast tracts of Indian land are all a reminder that Tibet is at the heart of the India-China divide. The 1951 fall of Tibet represented the most far-reaching geopolitical development in modern India’s history, with the impact exacerbated by subsequent Indian blunders. India must subtly reopen Tibet as an outstanding issue, including by using historically more accurate expressions like “Indo-Tibetan border” (not “India-China border”) and emphasizing that its previously stated positions were linked to Tibet securing real autonomy.

Brahma Chellaney is a geostrategist and author.

© The Hindustan Times, 2017.

India’s nuclear industry deserves a place in the sun

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New nuclear power has become increasingly uneconomical in the West but electricity from Indian-made reactors is still competitive.

Brahma Chellaney, Nikkei Asian Review, July 3-9, 2017.

22_06_2017_016_023_010The Indian government recently approved the construction of 10 commercial nuclear power reactors of indigenous design, initiating the largest nuclear building program in the world since the 2011 Fukushima disaster in Japan. The global nuclear power industry is still reeling from that calamity: Just three of Japan’s 42 reactors are currently operating, while France — the poster child for nuclear power — plans to cut its reliance on atomic energy significantly.

New nuclear power has become increasingly uneconomical in the West, in part because of rapidly spiraling plant-construction costs, prompting the U.S. and France to push reactor exports aggressively, including to “nuclear newcomers” such as the cash-laden oil and gas sheikhdoms of the Arabian peninsula. Still, the bulk of the new reactors under construction or planned worldwide are located in just four countries — China, Russia, South Korea and India.

The Indian decision to turn to a “fully homegrown initiative” reflects the continuing problems in implementing a 2005 agreement on nuclear power with the U.S. Nine years after the U.S. Congress ratified the landmark deal, commercialization is still not within sight.

India, duped by its own hype over the nuclear deal, had announced plans to import reactors costing tens of billions of dollars from two U.S.-based vendors, Westinghouse Electric and GE Hitachi Nuclear Energy, and France’s state-owned Areva. The Indian plans helped motivate Toshiba to acquire Westinghouse — a takeover that ultimately proved a huge blunder, plunging Toshiba into a grave financial crisis. Westinghouse filed for bankruptcy protection in March.

One missing link in commercializing the U.S.-India deal has been Japan, which signed a separate civil nuclear agreement with New Delhi only in 2016 after other supplier-nations had already concluded such accords. The Japanese parliament’s approval in early June of the agreement with India clears the legal path for Japanese exports. The accord is to take effect in early July.

Japan is a top nuclear equipment supplier, not merely because Toshiba largely owns Westinghouse. Hitachi has a global nuclear power alliance with GE, while Mitsubishi Heavy has one with Areva. Just one Japan-based company, Japan Steel Works, controls 80% of the international market for heavy nuclear forgings.

The Japanese parliamentary approval, although an important development, has come at a time when Westinghouse, GE Hitachi and Areva — which dominate the international reactor export business — are in a dire financial state, with their futures at stake. These are the companies that were to principally benefit from the U.S.-India nuclear deal, although none had secured a supply contract thus far.

Fading promise

Having invested considerable political capital in the vaunted nuclear deal with the U.S., India today confronts an embarrassing situation: The nuclear power promise is fading globally before New Delhi has signed a single reactor contract as part of that deal. To save face, India, with one of the world’s oldest nuclear energy programs, has embarked on a major expansion of domestically designed power reactors.

The monumental nature of the decision to construct 10 reactors with 700 megawatts of capacity each is underscored by the fact that the total size of these units surpasses the current installed nuclear generating capacity in the country. India has 22 nuclear reactors in operation which produce 6,219MWe of electricity. The 10 new reactors will be in addition to seven others already under construction which will have a combined capacity of 5,300MWe.

The 10-reactor decision fits well with India’s commitment under the Paris climate accord to reduce reliance on fossil fuels. India is committed to cutting the carbon intensity of its economy by about a third by 2030, including by generating 40% of its electricity from non-fossil fuels. The single-minded focus on carbon, however, threatens to exacerbate India’s water crisis, given the water-guzzling nature of the energy sector, especially nuclear power.

Moreover, U.S. President Donald Trump’s decision to exit the Paris accord has cast unflattering light on the onerous climate-related obligations India has taken on before it has provided electricity to all its citizens. According to a review of global trends by the Netherlands Environmental Assessment Agency the U.S. produces eight times more carbon dioxide emissions than India, on a per capita basis. Under current plans, India will link the last remaining 4,141 villages without power to its electricity grid in 2018, but 24-hour electricity will not be available nationwide to all communities until 2022.

India’s decision to ramp up its nuclear power capacity may contribute little to meeting the 2022 goal, given that the time frame for domestic nuclear plant construction averages seven years. But it will yield major economic dividends, including boosting domestic industry and creating thousands of jobs. By providing $11 billion worth of likely manufacturing orders to Indian industry, the 10-reactor decision will help to transform the domestic nuclear industry, according to Prime Minister Narendra Modi.

By contrast, had India relied primarily on imports of Western reactors to accelerate new capacity additions, the financial costs would have been substantially higher, without tangible benefits accruing to domestic industry. India is already a top weapons importer. Reliance on Western reactors would have made it the world’s largest importer of nuclear power plants — a double whammy for Indian taxpayers, especially given that the country is the only major Asian economy that is import-dependent rather than export driven.

In this light, the travails of the nuclear deal with the U.S. may be a blessing in disguise for India. But for the serious financial woes of Westinghouse, GE Hitachi and Areva — each of which was to build a cluster of reactors at a separate Indian park — Indian taxpayers would have been potentially saddled with plants like Areva’s reactor project in Finland, which is currently almost a decade behind schedule and billions of euros over budget.

Rightful place

To be sure, a dispute with Western suppliers over nuclear accident liability also put a break on India’s reactor-import plans. After India’s 2010 legislation put off foreign reactor vendors by giving plant operators the right of recourse against equipment suppliers in the event of a nuclear accident resulting from substandard equipment or material, New Delhi established a nuclear insurance pool in 2016 to extend protection to suppliers. By then, however, the global nuclear power scene had fundamentally changed due to the impact of the Fukushima disaster.

mapNuclear power may be on a downward trajectory globally, yet it has earned a rightful place in India’s energy mix. The country’s domestic nuclear power industry, without technological assistance from overseas, has done a good job in beating the mean global plant-construction time frame and in producing electricity at a price that is the envy of Western reactor vendors. As a result, power from domestic reactor models is competitive with cheap coal-fired electricity. By contrast, in the U.S., where five reactor closures have been announced since 2013, utilities are seeking greater state subsidies to keep other nuclear plants operating.

India was compelled to establish nuclear autarky, including an independent fuel cycle, because it was excluded from international civil nuclear trade on the grounds that it developed nuclear-weapons capability in 1974 after the Nuclear Non-Proliferation Treaty had already taken effect in 1970. (The five countries that tested bombs before the NPT was concluded were accorded the status of nuclear-weapons states under the NPT.) The Indo-U.S. nuclear deal sought to remedy this situation somewhat by opening civil nuclear commerce to India while recognizing the reality of its nuclear-weapons capability.

For many in India’s governing elite, the nuclear deal with the U.S. — despite the conditions quietly put into the American ratifying legislation — became the acme of their aspirations for the country. They believed the deal would turn the U.S. into India’s enduring benefactor and catapult the country into the big-power league. Years later, for example, New Delhi is still not in the U.S.-led Nuclear Suppliers Group, with China unyielding in its opposition to India’s entry.

A cost-benefit analysis against this background is helping to lower India’s expectations from the nuclear deal. By expanding construction of its own reactor models, India is laying the base for its emergence as a reactor exporter. Compared with the larger reactors of Westinghouse, GE Hitachi and Areva, India’s midsize reactors are better suited for the developing countries, considering their grid limitations.

India may still buy some Western reactors, but the latest decision clearly signals that its focus will be on building its own reactors. It has taken 12 years for Indian hype over the nuclear deal to give way to sober realism. The inward turn reaffirms India’s embrace of a zero-carbon power source and underscores its faith in the likely advent of commercially attractive reactors based not on uranium — a resource it lacks — but on thorium, which it has in plenty.

Brahma Chellaney is a geostrategist and the author of nine books, including the award-winning “Water, Peace, and War.”

© Nikkei Asian Review, 2017.

 

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The Kudankulam nuclear power plant seen from a beach in the southern Indian state of Tamil Nadu © Reuters

China’s Imperial Overreach

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A column internationally syndicated by Project Syndicate

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HONG KONG – Chinese President Xi Jinping’s tenure has been marked by high ambition. His vision – the “Chinese dream” – is to make China the world’s leading power by 2049, the centenary of communist rule. But Xi may be biting off more than he can chew.

A critical element of Xi’s strategy to realize the Chinese dream is the “one belt, one road” (OBOR) initiative, whereby China will invest in infrastructure projects abroad, with the goal of bringing countries from Central Asia to Europe firmly into China’s orbit. When Xi calls it “the project of the century,” he may not be exaggerating.

In terms of scale or scope, OBOR has no parallel in modern history. It is more than 12 times the size of the Marshall Plan, America’s post-World War II initiative to aid the reconstruction of Western Europe’s devastated economies. Even if China cannot implement its entire plan, OBOR will have a significant and lasting impact.

Of course, OBOR is not the only challenge Xi has mounted against an aging Western-dominated international order. He has also spearheaded the creation of the Asian Infrastructure Investment Bank, and turned to China’s advantage the two institutions associated with the BRICS grouping of emerging economies (the Shanghai-based New Development Bank and the $100 billion Contingent Reserve Arrangement). At the same time, he has asserted Chinese territorial claims in the South China Sea more aggressively, while seeking to project Chinese power in the western Pacific.

But OBOR takes China’s ambitions a large step further. With it, Xi is attempting to remake globalization on China’s terms, by creating new markets for Chinese firms, which face a growth slowdown and overcapacity at home.

With the recently concluded OBOR summit in Beijing having drawn 29 of the more than 100 invited heads of state or government, Xi is now in a strong position to pursue his vision. But before he does, he will seek to emerge from the National Congress of the Chinese Communist Party later this year as the country’s most powerful leader since Mao Zedong.

Since taking power in 2012, Xi has increasingly centralized power, while tightening censorship and using anti-corruption probes to take down political enemies. Last October, the CCP bestowed on him the title of “core” leader.

Yet Xi has set his sights much higher: he aspires to become modern China’s most transformative leader. Just as Mao helped to create a reunified and independent China, and Deng Xiaoping launched China’s “reform and opening up,” Xi wants to make China the central player in the global economy and the international order.

So, repeating a mantra of connectivity, China dangles low-interest loans in front of countries in urgent need of infrastructure, thereby pulling those countries into its economic and security sphere. China stunned the world by buying the Greek port of Piraeus for $420 million. From there to the Seychelles, Djibouti, and Pakistan, port projects that China insisted were purely commercial have acquired military dimensions.

But Xi’s ambition may be blinding him to the dangers of his approach. Given China’s insistence on government-to-government deals on projects and loans, the risks to lenders and borrowers have continued to grow. Concessionary financing may help China’s state-owned companies bag huge overseas contracts; but, by spawning new asset-quality risks, it also exacerbates the challenges faced by the Chinese banking system.

The risk of non-performing loans at state-owned banks is already clouding China’s future economic prospects. Since reaching a peak of $4 trillion in 2014, the country’s foreign-exchange reserves have fallen by about a quarter. The ratings agency Fitch has warned that many OBOR projects – most of which are being pursued in vulnerable countries with speculative-grade credit ratings – face high execution risks, and could prove unprofitable.

Xi’s approach is not helping China’s international reputation, either. OBOR projects lack transparency and entail no commitment to social or environmental sustainability. They are increasingly viewed as advancing China’s interests – including access to key commodities or strategic maritime and overland passages – at the expense of others.

In a sense, OBOR seems to represent the dawn of a new colonial era – the twenty-first-century equivalent of the East India Company, which paved the way for British imperialism in the East. But, if China is building an empire, it seems already to have succumbed to what the historian Paul Kennedy famously called “imperial overstretch.”

And, indeed, countries are already pushing back. Sri Lanka, despite having slipped into debt servitude to China, recently turned away a Chinese submarine attempting to dock at the Chinese-owned Colombo container terminal. And popular opposition to a 15,000-acre industrial zone in the country has held up China’s move to purchase an 80% stake in the loss-making Hambantota port that it built nearby.

Shi Yinhong, an academic who serves as a counselor to China’s government, the State Council, has warned of the growing risk of Chinese strategic overreach. And he is already being proved right. Xi has gotten so caught up in his aggressive foreign policy that he has undermined his own diplomatic aspirations, failing to recognize that brute force is no substitute for leadership. In the process, he has stretched China’s resources at a time when the economy is already struggling and a shrinking working-age population presages long-term stagnation.

According to a Chinese proverb, “To feed the ambition in your heart is like carrying a tiger under your arm.” The further Xi carries OBOR, the more likely it is to bite him.

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Water pincer against India

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China steps up its challenge to India by signing an accord with Pakistan to fund and build two mega-dams in Gilgit-Baltistan, which the United Nations recognizes as a disputed region and part of Jammu and Kashmir.

Brahma Chellaney, The Times of India, May 16, 2017

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China, which is working to re-engineer the trans-boundary flows of rivers originating in Tibet, has taken its dam-building frenzy to Pakistan-occupied Gilgit-Baltistan, which is part of Jammu and Kashmir. In a new challenge to India, which claims Gilgit-Baltistan as its own territory, China will fund and build two Indus mega-dams at a total cost of $27 billion, according to a memorandum of understanding (MoU) signed in Beijing during Prime Minister Nawaz Sharif’s visit. The MoU came the same day India announced its boycott of China’s “one belt, one road” (OBOR) summit, saying no country “can accept a project that ignores its core concerns on sovereignty and territorial integrity”.

Such is the mammoth size of the planned 7,100-megawatt Bunji Dam and the 4,500-megawatt Bhasha Dam that India does not have a single dam measuring even one-third of Bunji in power-generating-capacity terms. In fact, the total installed hydropower generating capacity in India’s part of J&K currently does not equal the size of even the smaller of the two planned dams in Gilgit. Still, Pakistan disingenuously rails against India’s modest hydropower projects in J&K and has sought fresh international arbitral tribunal proceedings against India over two projects, including the tiny 330-megawatt Kishenganga.

Even more striking is China’s hypocrisy: It bellicosely protested, almost on a daily basis, the Dalai Lama’s recent visit to Arunachal Pradesh, claiming it to be a “disputed territory”, although only Beijing disputes India’s control over Arunachal. It also held out threats against India jointly exploring with Vietnam for offshore hydrocarbons in Vietnam’s exclusive economic zone. Yet it has no compunctions about unveiling projects — under the “China-Pakistan Economic Corridor” (CPEC) banner — in Pakistan-occupied Jammu and Kashmir, a UN-recognized disputed region.

C_6ju34UQAAiEYXCPEC — OBOR’s flagship programme, which will cement Pakistan’s status as China’s economic and security client — has become a convenient cover for Beijing to include major strategic projects, stretching from Gilgit-Baltistan to Pakistan’s Chinese-built Gwadar port. The Bunji and Bhasha dams are also claimed to be part of CPEC, which, by linking the maritime and overland “Silk Roads” that China is creating, will gravely impinge on India’s security. A grateful Pakistan has given China exclusive rights to run Gwadar port for the next 40 years.

The Bunji and Bhasha dams, which will largely benefit the dominant Punjab province, located downstream, are set to enlarge China’s strategic footprint in the restive, Shia-majority Gilgit-Baltistan. For years, China has stationed several thousand of its own troops in Gilgit-Baltistan, ostensibly to protect its strategic projects there, including upgrading the Karakoram Highway and building a new railway and secret tunnels. CPEC has spurred increased concern that Gilgit-Baltistan, like Tibet, could get overwhelmed by the Chinese behemoth.

Pakistani authorities are responding harshly to anti-CPEC protests in Gilgit-Baltistan, where the corridor is widely seen as opening the path to the region’s enslavement by China. The fact that China rules Gilgit-Baltistan’s Shaksgam, Raskam, Shimshal, and Aghil valleys — ceded by Pakistan in 1963 to cement its strategic alliance with Beijing — has only added to the grassroots resistance against Chinese projects, which extend to mineral-resource extraction.

Indeed, the Bunji and Bhasha dam projects are already facing grassroots resistance because they are viewed locally as instruments to expropriate Gilgit-Baltistan’s water resources for Punjab province. The Bhasha Dam alone will flood 200 square kilometers of Gilgit-Baltistan, displacing at least 28,000 residents and submerging some significant archaeological sites.

As China uses CPEC to turn Pakistan into a colonial outpost, its new dam projects in Gilgit promise to bring the Indus Waters Treaty (IWT) under greater pressure. The paradox here is that China does not accept even the concept of water sharing but its activities in Gilgit are likely to impinge on the world’s most generous water-sharing treaty that remains a colossus among water pacts in the world.

The 57-year-old IWT has survived mainly because of India’s goodwill and full adherence, even as Pakistan violates the Simla peace treaty and canons of civilized conduct. China’s construction of dams in a disputed region is set to make Pakistan’s water relationship with India murkier. The IWT is binational but China has emerged as the third party through its Gilgit dam activities and upstream control of two of the six Indus-system rivers. The Chinese role will not only cast a pall on the IWT’s future but it could also deal a mortal blow to the treaty.

Brahma Chellaney is a geostrategist.

© The Times of India, 2017.

Nuclear power promise is fading

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Why the U.S.-India nuclear deal has proved to be a dud on the energy front, and how “incredible India” has fallen victim to its own hype over the deal.

Brahma Chellaney, The Hindustan Times, March 28, 2017

downloadIt is often said that China could become the first country in the world to age before it gets rich. India faces no such spectre. However, India has already become the first important economy in the world to take on onerous climate-related obligations before it has provided electricity to all its citizens.

This reality has greatly accentuated India’s energy challenge, which is unique in some respects. Consider the scale of its challenge: Before its population stabilizes, India will add at least as many people as the U.S. currently has. Even if India provided electricity to its projected 1.6 billion population in 2050 at today’s abysmally low per capita energy consumption level, it will have to increase its electricity production by about 40% of the total global output at present.

India’s domestic energy resources are exceptionally modest in comparison to population size and the demands of a fast-growing economy, with energy demand projected to rise 90% just over the next 13 years. And, unlike China, India does not share common borders with any energy-exporting country and thus must rely on imports from beyond its neighbourhood, making it vulnerable to unforeseen supply disruptions.

Still, under the Paris Agreement, India has committed to reduce the carbon intensity of its economy by about a third by 2030, including by generating 40% of its electricity from non-fossil fuels. The single-minded focus on carbon threatens to exacerbate India’s water crisis, given the water-guzzling nature of the energy sector — the largest user of water by far in the West.

What may be “clean” from a carbon angle could be “dirty” from a water-resource perspective. For example, “clean” coal, with carbon capture and sequestration, ranks along with nuclear power at the top of the water intensity chart. Also, some renewables, such as solar thermal power and geothermal energy, are notoriously water-intensive. By contrast, two renewable technologies increasingly being employed in India — solar photovoltaic and wind plants — need little water for their normal operations.

In choosing its energy options, India must strike a prudent balance between carbon intensity and water intensity, or else it will get caught in a vicious circle, with attempts to address the energy crisis worsening the water crisis, and vice versa. The nexus between energy, water and even food demands a holistic, integrated policy approach.

The share of renewables in India’s energy mix is set to considerably increase, given the tax and other incentives on offer. In contrast to the intermittent nature of renewables like solar and wind, hydro and nuclear power can be used both to cover the electrical base load and for peak load operations. Yet hydro and nuclear power face increasingly strong headwinds. Activist NGOs — many foreign funded — have made it difficult for India to build large dams, blighting the promise of hydropower. It is virtually certain that India (which generates more power from wind alone than from nuclear) will slip badly on its 2030 target to produce 12% of electricity from atomic sources.

Nuclear power growth is falling victim to larger factors. The first factor is the increasingly poor economics of nuclear power across the world. Skyrocketing construction costs, made worse by the post-Fukushima safety upgrades, and reliance on massive government subsidies are making nuclear power uncompetitive.

A second factor is the dire financial state of the foreign companies that were planning to build nuclear power plants in India — Toshiba-Westinghouse and Areva. Their very survival is at stake today. France’s state-owned Areva needs a government-led €5 billion bailout to stay afloat. It also set to be split, with its reactor unit being sold to EDF, also state-owned.

For Toshiba, the US nuclear market is proving to be its graveyard. On the brink of disintegration, Toshiba has posted a $6.2 billion nuclear-business loss, mainly from its US subsidiary, Westinghouse. Its 2006 blunder in acquiring Westinghouse has been compounded by its 2015 purchase of nuclear plant builder CB&I Stone & Webster. Now Toshiba is jettisoning its lead role in projects to build nuclear plants in India and Britain, a move that would leave it merely as a nuclear equipment supplier.

Add to the picture a third factor: Grassroots resistance in India to new nuclear power plants — a fact that resulted in considerable delay in commissioning the Kudankulam plant and forced the shifting of Westinghouse’s first planned project from Gujarat to Andhra Pradesh.

India, duped by its own hype over the 2005 nuclear deal with the US, announced plans for a huge expansion of nuclear power at a time when this energy source was already in decline globally. Its plans indeed motivated Toshiba to acquire Westinghouse. Now India faces an embarrassing situation: The nuclear power promise is visibly fading before it has signed a single reactor contract as part of the nuclear deal.

More broadly, India’s energy conundrum has been compounded by unrealistic targets, embrace of carbon-reduction goals at a time when Donald Trump was vowing to take America in the opposite direction, and inability to stem disruptive NGO activism. But for the near bankruptcy of Areva and Toshiba, Indian taxpayers would have been saddled with white-elephant projects similar to Areva’s Finnish reactor at Olkiluoto, whose construction is running almost a decade behind schedule and incurring billions of euros in cost overruns.

Brahma Chellaney is a geostrategist and author.

© The Hindustan Times, 2017.

Shed the Indus albatross

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Brahma Chellaney, The Times of India, March 20, 2017

At a time when India is haunted by a deepening water crisis, the Indus Waters Treaty (IWT) hangs like the proverbial albatross from its neck. In 1960, in the naïve hope that water largesse would yield peace, India entered into a treaty that gave away the Indus system’s largest rivers as gifts to Pakistan.

Since then, that congenitally hostile neighbour, while drawing the full benefits from the treaty, has waged overt or covert aggression almost continuously and is now using the IWT itself as a stick to beat India with, including by contriving water disputes and internationalizing them.

A partisan World Bank, meanwhile, has compounded matters further. Breaching the IWT’s terms under which an arbitral tribunal cannot be established while the parties’ disagreement “is being dealt with by a neutral expert,” the Bank proceeded in November to appoint both a court of arbitration (as demanded by Pakistan) and a neutral expert (as suggested by India). It did so while admitting that the two concurrent processes could make the treaty “unworkable over time”.

World Bank partisanship, however, is not new: The IWT was the product of the Bank’s activism, with US government support, in making India embrace an unparalleled treaty that parcelled out the largest three of the six rivers to Pakistan and made the Bank effectively a guarantor in the treaty’s initial phase. With much of its meat in its voluminous annexes, this is an exhaustive, book-length treaty with a patently neo-colonial structure that limits India’s sovereignty to the basin of the three smaller rivers.

The Bank’s recent decision was made more bizarre by the fact that while the treaty explicitly permits either party to seek a neutral expert’s appointment, it specifies no such unilateral right for a court of arbitration. In 2010, such an arbitral tribunal was appointed with both parties’ consent. The neutral expert, however, is empowered to refer the parties’ disagreement, if need be, to a court of arbitration.

The uproar that followed the World Bank’s initiation of the dual processes forced it to “pause,” but not terminate, its legally untenable decision. Stuck with a mess of its own making, it is now prodding India to bail it out by compromising with Pakistan over the two moderate-sized Indian hydropower projects. But what Pakistan wants are design changes of the type it enforced years ago in the Salal project, resulting in that plant silting up. It is threatening to target other Indian projects as well.

Yet Indian policy appears adrift. Indeed, India is backsliding even on its tentative moves to deter Pakistani terrorism. For example, after last September’s Uri attack, it suspended the Permanent Indus Commission (PIC) with Pakistan. Now the suspension has been lifted, allowing the PIC to meet in the aftermath of the state elections.

In truth, the suspension was just a charade, with the PIC missing no meeting. Prime Minister Narendra Modi reversed course in time for the PIC, which meets at least once every financial year, to meet before the current year ended on March 31 in order to prepare its annual report by the treaty-stipulated June 1 deadline. But while the suspension was widely publicized for political ends, the reversal happened quietly.

Much of the media also fell for another charade that Modi sought to play to the hilt in the Punjab elections: He promised to end Punjab’s water stress by utilizing India’s full IWT-allocated share of the waters. His government, however, has initiated not a single new project to correct India’s abysmal failure to tap its meagre 19.48% share of the Indus waters.

Instead, Modi has engaged in little more than eyewash: He has appointed a committee of secretaries, not to find ways to fashion the Indus card to reform Pakistan’s conduct, but farcically to examine India’s own rights under the IWT over 56 years after it was signed. The answer to India’s serious under-utilization of its share, which has resulted in Pakistan getting more than 10 billion cubic meters (BCM) yearly in bonus waters on top of its staggering 167.2 BCM allocation, is not a bureaucratic rigmarole but political direction to speedily build storage and other structures.

Despite Modi’s declaration that “blood and water cannot flow together,” India is reluctant to hold Pakistan to account by linking the IWT’s future to that renegade state’s cessation of its unconventional war. It is past time India shed its reticence.

Pakistan’s interest lies in sustaining a unique treaty that incorporates water generosity to the lower riparian on a scale unmatched by any other pact in the world. Yet it is undermining its own interest by dredging up disputes with India and running down the IWT as ineffective for resolving them. By insisting that India must not ask what it is getting in return but bear only the IWT’s burdens, even as it suffers Pakistan’s proxy war, Islamabad itself highlights the treaty’s one-sided character.

In effect, Pakistan is offering India a significant opening to remake the terms of the Indus engagement. This is an opportunity that India should not let go. The Indus potentially represents the most potent instrument in India’s arsenal — more powerful than the nuclear option, which essentially is for deterrence.

The writer is a geostrategist and author.

© The Times of India, 2017.