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TRANSFORMING THE RUSSIAN NUCLEAR WEAPONS COMPLEX: EXECUTIVE SUMMARY AND RECOMMENDATIONSTHE ROLE OF NON-GOVERNMENTAL INSTITUTIONS Summary of Conference Proceedings and Recommendations for Future Action On June 22 and 23, 1999, the Russian-American Nuclear Security Advisory Council (RANSAC) convened a meeting in Washington, D.C. titled, Transforming the Russian NuclearWeapon Complex: The Role of Non-Governmental Institutions. This meeting brought together over fifty experts in the economic development, nonproliferation, and the energy andenvironmental fields to identify substantive ideas and activities that could be conducted on a second, non-governmental track in support of U.S.- Russian government andinternational efforts to downsize and redirect the Russian nuclear weapon complex and reduce the nuclear proliferation danger in Russia. The meeting resulted in a list of over 20significant activities that could be developed or implemented by non-governmental organizations (NGOs). The proliferation dangers in the Russian nuclear complex are significant. The complex employs 60,000-70,000 weapon scientists, engineers, and workers and manages hundreds oftons of fissile material and thousands of nuclear weapons. If just a small portion of these people or inventories were diverted, it would create an international security crisis. Manygovernment programs are designed to address specific elements of this multifaceted proliferation problem but few are focused on the key underlying issue - that these dangers resultprimarily from the oversize and protracted economic deterioration of the Russian nuclear weapon complex. To address these fundamental issues, the Russian nuclear complex mustbe reduced in size and its excess workers provided with relevant, satisfying and peaceful alternative employment opportunities. These two issues are inextricably linked andprogress on creating alternative employment is necessary for substantial complex downsizing to occur. Much of the June discussion focused on ideas that could be developed for use in the U.S.- Russian Nuclear Cities Initiative (NCI) because that program is specifically focused onthe downsizing and alternative employment challenges in the Russian nuclear weapon complex. But the suggestions and recommendations out- lined in this report are alsoapplicable for use in other U.S.-Russian and international programs that address Russian proliferation dangers, including the Initiatives for Proliferation Prevention (IPP), theInternational Science and Technology Center (ISTC), Technical Assistance to the Commonwealth of Independent States (TACIS, a support program led by the European Union),and the proposed European Nuclear Cities Initiative (ENCI). Another major objective of the June meeting was to determine the feasibility of organizing a wide spectrum of nongovernmental organizations Into a coordinated consortium thatcould focus more attention and resources on developing alternative employment opportunities for Russian nuclear scientists. The meeting identified numerous projects that Russian scientists and non-governmental organizations could collaborate on, as well as new projects that could be developed forgovernmental implementation. The ideas were generated in the meeting's three key areas of focus:
Since the June meeting, some of the proposed projects have been implemented by various organizations or official programs, particularly those activities in subsection one ("gatherand analyze historical and experiential data from previous and ongoing projects") of the "Business and Economic Development Recommendations" section. A few others are invarious stages of development. But most remain to be developed as viable projects. In the spring of 2000, the Carnegie Corporation of New York provided funding for the creation of the non-governmental consortium. The U.S. and Russian governments have alsoexpressed their support for the creation of the consortium. The objective of the new consortium is to move as many of these projects forward to implementation as possible. Thisreport is being issued to coincide with the initiation of the consortium effort. The following is an overview of the principal recommendations for future action that were developed at the June 1999 meeting. RECOMMENDATIONS FOR FUTURE ACTION I. Business and Economic Development Activities 1. Gather and Analyze Historical and Experiential Data From Previous and Ongoing Projects. These activities should include:
These organizations could team with a U.S. counterpart, to:
A number of U.S. universities have expressed an interest in contracting with the United States government to perform business training under NCI. However, few steps have beentaken in this area by the government and the cost could be very high under some options. In addition, the Russian Ministry of Atomic Energy (Minatom) has indicated anunwillingness to send substantial numbers of people from its headquarters or from the closed cities to the U.S. for business training. Four ideas in this category have beensuggested:
This would identify services that businesses could potentially invest in, and the requirements for conditions (e.g. infrastructure development) that would make investment moreacceptable. 5. Create an Interactive, On-Line Database of Detailed Information About the Closed Cities. This would include: social and demographic data, information on the capabilities and skills of the workforce, and commercial technologies currently under development through theISTC, IPP or other programs. This information could be provided to potential investors interested in exploring commercial opportunities in the closed cities or be provided as part ofan interactive internet web site. II. Nonproliferation Activities 1. Continue to Develop and Expand Work at the New Russian Nonproliferation Centers. In 1998 and 1999, four new nonproliferation centers were created in Russia, primarily through funding provided by U.S. philanthropic foundations and the U.S. Department ofEnergy (DOE). Two of these, at the Kurchatov Institute in Moscow and the Institute of Power Physics and Engineering (IPPE) in Obninsk, are not in closed cities but will performwork relevant to the U.S.-Russian cooperative nuclear nonproliferation relationship. The two others are in the closed nuclear cities of Snezhinsk (Chelyabinsk-70) and Sarov(Arzamas16). The establishment of the centers is part of a strategy for developing nonproliferation analysis and research and development as a major activity in the future Russiannuclear weapons complex. A similar transformation occurred in the U.S. nuclear weapon laboratories after the cold war. There is considerable interest in the work of these newnonproliferation centers in the U.S. government and the international NGO community. Additional efforts that could be undertaken include:
The U.S. government currently supports nuclear material safeguards and non-proliferation training courses at the Moscow Institute of Engineering Physics (MePHi). This coursework could be supplemented with additional political science and policy-based nonproliferation training for people from the closed cities and Minatom. 3. Host a Broadly Focused Nonproliferation Meeting in Moscow on a Yearly or Semi-yearly Basis. The purposes would be to: involve Russia-based nonproliferation experts and organizations in a regular meeting; facilitate the interaction of the new Russian nonproliferationcenters with existing NGOs working in this area; and allow for a dialogue with Russian-based policy makers in a non-official setting. 4. Perform Research on Closed City Social Indicators and Demographics. Projects at the Sarov nonproliferation center will provide some data in these areas, but it would be useful to have an expanded range of information about each city. One of the keycategories of information is workforce trends over the next five to ten years, including data on the percentage of the closed city workforce that will reach retirement age and heremoved from the Minatom payroll in the next five years. III. Energy and Environmental Activities 1. Develop Activities for Proposed Energy Efficiency Centers. The proposal is to have the U.S. and Russian governments establish energy efficiency centers at three closed cities, Sarov, Snezhinsk, and Zheleznogorsk (Krasnoyarsk-26). TheU.S. Energy Department has indicated some interest in this proposal. But, the development and implementation of the idea is likely to require considerable input from the NGOcommunity including: putting forth project ideas; finding credible partners; ensuring that government-sponsored work is complementary to existing non-governmental projects; andalerting researchers to the opportunity to work with closed city scientists. 2. Develop Activities for Proposed Radioactive Waste Analysis/Migration Centers. Russian radioactive waste from weapon production is a very dangerous legacy. While in-depth studies have been performed to determine the dimensions of this problem, treatmentand mitigation of the environmental damage from this waste has not been implemented on a large scale. One suggestion from the meeting was to establish government sponsoredradioactive waste management centers at four locations, Sarov, Snezhinsk, Zheleznogorsk, and Ozersk (Chelyabinsk-65). The NGO role would be similar to that outlined for theenergy efficiency centers. 3. Develop a Model-for Improved Environmental Performance Through Energy Efficiency and Carbon Trading. The 1997 Kyoto Protocol on Climate Change established a process for emissions trading as a mechanism for developed countries to meet their emissions reduction targets. Underthis system, it is possible that Russia could generate a substantial funding stream through its tradable emissions permits because it currently emits less carbon than it is permittedunder the agreement. However, there is concern that in tandem with any carbon trading agreement that substantial steps also be taken to improve energy efficiency in Russia. Thisis especially important under scenarios where Russia's industrial output begins to climb once again. As a first step a project in this area could seek to mobilize the scientific,engineering and mathematical talent of the nuclear cities to establish the domestic technical and institutional capabilities for measuring, monitoring, and reporting on emissions, andtracking investments in emissions reductions. The U.S. Congress has made clear that it will not provide funding for the implementation of the Kyoto Protocol until it has beenratified. As a result any near term implementation work in this area will need to be done on a strictly non-governmental basis. 4. Develop Energy Efficient Options for Replacement of Russia's Plutonium Production Reactors. Since 1994 the U.S. and Russia have been engaged in a process to end the production of weapon grade plutonium in Russia. This effort has had two components - (1) converting thenuclear cores of the existing reactors so that weapon grade plutonium is no longer produced, and (2) planning for the ultimate retirement of the reactors and their replacement withnew energy sources. Significant analysis of energy efficient options will need to be performed to identify the best replacement energy source. 5. Conduct Joint Research on New and Improved Energy Technologies. Areas of particular interest for joint study include research and development of non-nuclear fuel cells, and uses of ethanol and compressed natural gas. 6. Perform Environmental Science Research. Two proposals at the June meeting were to initiate Russian atmospheric and ocean modeling projects and to perform an analysis of the effects of permafrost thawing on Siberianforest ecosystems. 7. Convene a Workshop in Russia on Energy and Environment Issues. The objective of this meeting would be to develop environmental and energy ideas that could be implemented as part of the employment conversion process. The meeting wouldinvolve Russian, U.S., and other international specialists. 8. Analyze Spent-Fuel Storage Possibilities in Russia. A few proposals have been floated to open up a part of the Russian nuclear complex for the storage of foreign spent nuclear fuel (particularly from Asian countries). If such aproject went forward, it could provide a substantial monetary flow that could, in part, be used to finance other activities, including some outlined in this report. However, there areserious environmental concerns about some of the proposals and restrictions in U.S. and Russian law that would have to be addressed. A thorough analysis of this issue could helpcreate a useful road map of possibilities and problems in this area. SUMMARY OF DAY ONE PROCEEDINGS "Business Development and Nonproliferation Issues" Prepared by Sharon Weiner, Princeton University Session I: Business Training and Economic Development Chaired by David Bernstein, Center for International Security and Cooperation, Stanford University Dave Bernstein introduced the session by explaining that one of NCI's objectives is to create sustainable jobs in Russia's closed nuclear cities by building upon previous U.S.-Russian development programs. A host of private efforts and international programs have been pursuing similar goals concurrently. These programs have generated usefulinformation and experience. Rather than simply trying to initiate more projects, Bernstein believed that NGOs would be able to best support the NCI by gathering and analyzing thehistorical and experiential data from these projects in an effort to help understand what works and what does not. Following this introduction, the session proceeded to a series of presentations, followed by discussion of activities to facilitate achievement of the NCI's private sector developmentgoals. NCI's Potential Utilization of Outside ResearchBy Janet Hauber, Nuclear Cities Initiative Program Office, U.S. Department of Energy Janet Hauber began her Presentation by outlining the current NCI strategy to leverage current commercial investment in Russia rather than engaging in commercial developmentitself. As part of this effort, NCI intends to fund the contract research initiative, cooperate with other existing U.S. government-led efforts to leverage commercial investment indifferent parts of Russia, encourage multinational participation in the program, and promote direct industry involvement. Hauber explained that the Nuclear Cities Initiative materialized in large part due to the efforts of the Russian American Nuclear Security Advisory Council and other NGOS, andthat her office will continue to encourage and support NGO and university involvement. One of the most important roles for non-governmental organizations continues to bepromoting program awareness and support, especially by educating the Administration, Congress, and the public on the proliferation risks in Russia. These organizations can alsowork with industry to develop commercial proposals and community development ideas. Efforts to remove barriers in Russia to implementation of the Nuclear Cities Initiativewould also be welcomed, including legal and financial reform, support for the rule of law with regard to investment, and other changes to make investments more appealing andsecure. Hauber noted that because NGOs have greater flexibility and different accountability than governments, they are able to raise novel and controversial issues that can helpNCI's evolution. Hauber concluded by listing some worthwhile issue areas where non-government organizations could focus their attention, including
By Irina Astrakhan, The World Bank, and Tatiana Krylova, Partner KPMG Moscow and Professor, Moscow State University In the short term, Irina Astrakhan encouraged the Nuclear Cities Initiative to pursue pilot demonstrations by concentrating on one or two projects that are likely to succeed and thenusing these results to help establish NCI's credibility in the eyes of the local population. Additional short-term priorities should include helping the target cities understand market-oriented business practices and helping the nuclear weapons scientists appreciate the need for commercialization as opposed to research. Efforts to overcome barriers to regulationand licensing would also be useful. Astrakhan also argued that the NCI should target existing businesses for expansion and develop opportunities for subcontracting research activities to the Russian scientificcommunity, possibly through the creation of a small consulting firm or contract research organization. This point was reinforced during subsequent discussions when it wassuggested that commercialization be the longer term objective. Medium- to longer-term priorities should include working to change the business climate in Russia. For example, local authorities would benefit from seminars explaining howWesterners view investment, business development, and risk. Astrakhan also suggested building partnerships between foreign and local NGOS, encouraging foreign and privateRussian investment in the cities, and identifying key problems with red tape in each locality. Over the long-term, non-governmental institutions should work on the commercialization of technology, developing partnerships with local authorities to enhance their skills, andincreasing awareness of sources of finance and venture capital. Drawing on her experience, Astrakhan outlined five keys to success in these endeavors:
Another important problem is the lack of a reliable information base on the Russian private sector. Financial information about private companies is often missing, does not exist,or is simply not valued enough to be managed in a coherent way that makes the data widely accessible. Cultural differences and interpersonal relations are also important, and Krylova offered a handful of tips to help maintain effective working relations with Russian partners: beconsistent in dealing with a corporation, and especially try to avoid changing personnel involved in a particular project; provide consultants with relevant experience and interest inRussia; balance Russia's needs with what it demands; anticipate Russian positions and needs; and help Russians value Western expertise. The U.S. Perspective By Cecilia Ciepiela, Carana Corporation and Mark Taylor, Civilian Research and Development Foundation Cecilia Ciepiela spoke on her previous experience designing and negotiating USAID/Russia's participation in the U.S. government's Regional Investment Initiative (RII), a programto provide targeted assistance to support reform initiatives in regions that had demonstrated a reformist spirit. The RII was tailored to each locale and negotiated with each regionaladministration. Ms. Ciepiela offered a perspective on the resources and effort required for the Nuclear Cities Initiative to meet its goals by illustrating the results achieved by USAID. Since itsbeginning in 1992 and up to 1998, USAID/Russia's entire small business development program, with a total budget of approximately $500 million over that six year period, helpedcreate over 5,000 new businesses, gave out over 35,000 micro loans, and created 300 business support institutions. This resulted in 80,000 new jobs in Russia. By contrast, the NCIaims to create 30,000 new jobs. Based upon her experience, Ms. Ciepiela offered several lessons for business development in Russia. Her first caution was to recognize the "show me the money" syndrome. As aninitial reaction to American assistance program, many Russians hope for large outlays of money through their engagement with the U.S. side. It is important, therefore, that theirexpectations be kept low about available resources and that the target audience come to appreciate the value of technical assistance and training to improve business practices andbetter leverage monetary support. This can only be accomplished, however, by working closely with the Russians, understanding their perspective, and finding ways to presentissues to them that encourage new and different thinking. One program piloted by USAID/Russia, dubbed the "zakuski" or "appetizer" approach, allowed Russian counterparts tobecome better informed about the value of various forms of non-monetary technical assistance before major investments are made into approaches that they might not be interestedin or value. When counterparts can better prioritize what it is they need, based on a more intimate knowledge of their problems and what can be done in the Russian context,technical assistance has a greater impact. Another approach was used under an international accounting reform project aimed at introducing International Accounting Standards (IAS) and practices. The project firstsensitized potential users to the value of IAS as a better way of managing their assets and selling themselves to potential outside investors, and then provided intensive training inactual conversions. Echoing earlier comments, Ciepiela also encouraged assistance initiatives to charge fees (even token amounts) for events, workshops, and seminars as this tendsto increase attendance, decrease attrition in cooperative ventures, and helps forge a sense of commitment from potential Russian partners. Another lesson is to listen to what the Russians themselves want rather than simply supplying what you have. It is also important to invest in mechanisms for sharing lessonslearned. For example, the "zakuski" approach utilizes Russians who have worked in previous successful technical assistance programs to talk to new participants, because they canbetter convey what was, and what was not, valuable about the programs to other Russians. Ms. Ciepiela explained that in the short-term, regional officials are often interested in assistance that can be given within the existing Russian framework. U.S. models are oftenirrelevant to them in the Russian context. Regardless, in the longer term, they are interested in changing the fundamental economic and business framework based on U.S.,European, or their own models. Finally, Ms. Ciepiela urged investment in developing relationships, viewing the design and negotiation process as an important component of technical assistance programs, andcautioned against pressing for quick results, as this often undercuts the connections that are necessary for success. Ms. Ciepiela's fundamental message is that U.S. assistanceprograms often are too focused on their own goals and methods, and sometimes overlook valuable input from the Russians due to frustration or inability to get beyond "show me themoney. The challenge in designing and implementing technical assistance programs in Russia is recognizing some of the legacies of Soviet thought and practice, and finding waysto either capitalize on or get beyond them. Mark Taylor explained that there are three parts to the process of developing any commercial enterprise. First is research and development. This stage is followed by new productdevelopment. The final phase is establishing a sustainable business. Based upon his experience with U.S. companies and their efforts to commercialize Russian technology, Taylorexplained that Russian scientists often do not realize that the second phase, product development, is the most capital-intensive portion of a venture. Russians assume that any goodtechnology is valuable enough to encourage investment "as is." For Western businesses, however, the technology alone is merely a possibility rather than a sure thing. Taylor noted that U.S. businesses generally respond to market pull, not technology push. Taylor also explained that in Russia there often is no money for building a prototype, yetWestern businesses see this as necessary for future funding. He added that many Western companies are biased against things that they did not invent themselves. Also, credibilityis often a problem for Russian technology. For example, problems with the Mir space station caused many U.S. businesses to question the reliability of the entire Russian scientificenterprise. Taylor also advised the audience that significant competition exists in the business world. To be successful, Russians have to offer something unique enough to offset the greatertransaction costs of doing business in Russia or the closed cities. He stated that when U.S. companies look at Russia they do not see opportunity, they see risk. Therefore, thewestern business approach to investing in Russia is primarily about risk management, which dictates a conservative, go-slow approach. The Russians need to be reminded that theprocess of commercialization takes longer and costs more than expected, and that a large percentage of new businesses fail. There are also problems that are unique to doing business in Russia. While there is a body of patent law and a patent process in Russia, one of the foremost concerns is thedifficulty of enforcing intellectual property rights in Russia's new and evolving legal system. Moreover, since an international patent can cost up to $300,000 or $400,000,protecting intellectual property can be prohibitively expensive for scientific and research institutes in poor financial condition. Taylor explained that these problems mean thatRussia is under-matched against U.S. companies when it comes to protecting intellectual property rights or securing long-term gain from Russian technology or innovations. Arelated problem is the fact that Russian institutions usually co-own the patent rights to whatever their scientists produce. These conditions can hinder innovation andentrepreneurship on the Russian side, and possibly deter investors by creating questions about actual technology ownership. Taylor ended with a brief discussion of the future educational interests of young adults in Russia. Currently, studying business and pursing MBAs is winning out over furthereducation in the sciences. This could result in a severe shortage of the bright scientists and engineers that are needed to keep the Russian scientific establishment alive andcompetitive. U.S. Efforts to Assist Commercialization of Russian Technology By David Bernstein In closing out the presentations, David Bernstein underscored the problems facing U.S.-Russian cooperative ventures. In general, Bernstein indicated that there is frequently amismatch between what the Russians have to offer and what U.S. companies want. In many cases, Russians over-emphasize the role of technology in commercialization, and donot understand that the best technology is not always going to be the best commercial bet. U.S. companies are often interested in long-term market penetration they want to sell goods in a capitalist Russia. However, private western firms will engage in R&D andcommercialization only if such activity can be expected to yield a profit in the Russian market, or if they can bring new technology to western markets and make a profit there. Inother words, U.S. companies are not altruistic; they are driven by bottom-line concerns, and are out to utilize the potential of Russian technology. Developing an understanding ofthese motivations is critical the desire for profits does not always coincide with Russian desires to commercialize scientifically challenging R&D or U.S. government concernsabout proliferation. Bernstein further elucidated the challenges NCI faces by describing the disincentives for investing in Russia. These factors include, but are not limited to:
Session I Wrap-up: Discussion of Potential New Missions and Opportunities In identifying specific activities that NGOs might conduct in the business and economic development area, Bernstein stated that nongovernmental groups should pursue projects thatrun parallel to official NCI activities, and which facilitate the Initiative's objectives. Moreover, these should be activities that the NCI, even if it had more money, is not structuredto do or is ill equipped to accomplish. With these basic conditions in mind, Bernstein synthesized from the day's discussions and presentations three main categories of potentialnon-governmental contributions: Gathering and analyzing historical and experiential data from previous projects: Since the early 1990s, a variety of assistance programs have been initiated by the U.S.government, international financial institutions, private sources, and NGOs to develop sustainable economic activities in Russia. While many of these programs have not yetreached, or have failed to achieve their goals, they have nevertheless accumulated large amounts of valuable information and experiences that could be mined to help shape anddirect the NCI. Unfortunately, because of its limited resources and action-oriented mandate, the NCI program is unlikely to collect and evaluate this data. Thus, one practical areawhere NGOs could contribute would be in gathering and analyzing experiences of previous assistance programs, including U.S. government support, TACIS, and internationalfinancial institution assistance, for lessons applicable to the NCI. Moreover, developing a fundamental understanding within the nuclear cities of western business concepts and decision-making processes is essential, because it is an appreciationof these concepts that will serve as the foundation for commercial ventures to grow and prosper. Establishing this common frame of reference will help avoid misunderstanding anddiverging expectations that can threaten cooperation. Therefore, it was proposed that non-governmental entities could provide a valuable service by explaining the value of variousbusiness concepts to the nuclear cities, including: corporate governance; enterprise restructuring, privatizing, corporatizing, and spin-offs; partnering; the value of technicalassistance; and reasons U.S. companies decide not to invest in Russia. Stimulating private sector development and investment: To create sustainable jobs and economic activity, it is important to note that the NCI program will be primarily a front-end stimulator, providing various forms of early support to promising projects. This support will include technical assistance to help new ventures adopt conventional managementpractices in areas such as bookkeeping and accounting, personnel, and other legal and administrative matters. There are numerous public and private entities that provide suchtraining, and it would be useful for an NGO to survey qualified technical assistance providers, especially Russian ones, for services that the NCI can utilize. Acceptance of this assistance and western standard business practices on the part of Russian projects in the closed cities could be enhanced by demonstrating the success othercommercial projects in Russia have experienced by adopting these standards. It was proposed that non-governmental experts help find successful Russian ventures within theregions or in adjacent cities that can interact with or serve as examples to commercial development projects the nuclear cities. Ultimately, though, these projects will have to attract follow-on funding from enterprise funds, international financial institutions, and, most importantly, private industry. The NCIwill endeavor to find sources of finance and potential western partners for commercially promising projects in the nuclear cities. Non-governmental agents can collect a variety ofinformation for the NCI that will help enhance the probability of project success by:
While having a readily available source of such information would help broaden the base of U.S. industry interest in the nuclear cities, the Energy Department seems unlikely totake on this task in the near term. A number of non-governmental groups are well-positioned to help describe the situation in the closed cities but they do not have the resources toprepare, maintain, and update such a comprehensive body of information. Much of this information could be assimilated by Russian researchers, perhaps some of the displaced orunderemployed scientists in the Russian Academy or underemployed scientists in the nuclear cities. Therefore, one idea that was proposed was fostering establishment of Russiancontract research organizations, that would team with a U.S. counterpart, to (1) collect and provide information to the private sector on the basic economic, political, andadministrative situation in each nuclear city (as well as neighboring large cities and oblasts), (2) act as an intermediary in setting up partnerships or identifying promising contractresearch initiatives, and (3) do research on a business-like contractual basis. Facilitating linkages and interaction at multiple levels: A recurrent theme through the discussion was the need for better communication and coordination among all of thevarious actors and government agencies, on both the U.S. and Russian sides, which could potentially play a role in assisting the transformation of the Russian complex. It wasproposed that NGOs help come up with concrete plans to forge stronger links between:
Session II: Nonproliferation and Arms Control Chaired by Ken Luongo, RANSAC Executive Director Ken Luongo began the second session by describing RANSAC's work (in cooperation with Princeton University and Harvard University) in establishing new nonproliferationresearch and analysis centers in the closed cities. The objective of this effort is to encourage scientists to move into arms control and nonproliferation work and to show Russia thevalue of having a capability in these areas. To date, four centers have been funded in both the "closed" and "open" cities (at Snezhinsk, Sarov, the Institute for Physics and PowerEngineering at Obninsk, and the Kurchatov Institute in Moscow). RANSAC's future interest in this area is creating a peer review process to foster the research produced by these centers, assist them in developing future activities, and help themwith the logistics of transferring information and funding. With respect to establishing the programmatic work for the new centers, Luongo said that the goal is to identify possibleresearch projects during the first 4-6 months of the centers' initial operations, at nine months be able to review drafts, and at twelve months have the first projects completed.
By Yuri Yudin, Director, Analytical Center for Nonproliferation, and Senior Research Scientist, Russian Federal Nuclear Center VNIIEF, Sarov (Arzamas-26) Yuri Yudin briefly described some of the arms control research and policy analysis that he and his colleagues at VNIIEF have undertaken since the late 1980s. In 1998, theydecided to create a center devoted exclusively to studying and providing recommendations on key nuclear nonproliferation and arms control challenges. Five projects are underwayin the first year. The Energy Department will provide funding for some projects, and U.S. foundations will provide partial funding for these and others. The projects are:
By Clay Moltz, Center for Nonproliferation Studies, Monterey Institute of International Studies and Igor Khripunov, Center for International Trade and Security, University of Georgia The Monterey Institute of International Studies (MIIS) and the University of Georgia centers are two of the most active U.S.-based NGOs involved in basic nonproliferation trainingprograms in Russia. A private graduate school of international relations, the Monterey Institute has a nonproliferation center that boasts 45 full time staff and 65 graduate students. In 1991 it beganworking to create communities of nonproliferation specialists in the former Soviet Union. The Center's activities include a program for NIS visiting fellows that provides intensivetraining in nonproliferation studies at the MIIS campus, including dedicated lectures and travel to the U.S. labs. There is also a "Washington Intensive Non-Proliferation Seminar",conducted in Russian, composed of two weeks of focused briefings on the U.S. nonproliferation community and U.S. institutions. Other activities include a program on exportcontrols for senior managers and developing nonproliferation lectures in Moscow. Moltz explained that Monterey has provided assistance to five nonproliferation NGOs in theformer Soviet Union (two in Moscow and one each in Minsk, Kiev, and Alma-Ata). The Center for Nonproliferation Studies would like to work more closely with the nonproliferation centers in the closed cities and to help them find finding, write proposals,organize meaningful activities, and co link them to the wider nonproliferation community. Igor Khripunov offered another look at NGO experience in Russia and described the work of the University of Georgia's Center for International Trade and Security. According toKhripunov, NGOs have certain advantages over government programs. NGOs are better positioned to be ahead of the government, have more flexibility and accessibility toRussian officials, and they are more cost-effective. He explained that the University of Georgia offers a good example of successful NGO assistance. For starters, the Center has conducted a number of comprehensive studies on thedevelopment of Russian nuclear export controls. These studies have monitored the implementation of different laws, procedures, and institutions in Russia, identified potentialweaknesses to the system, and offered constructive recommendations for tightening the overall effort. One of the Center's most significant achievements was helping establish andsecure funding for the Moscow-based Center for Export Control. The Center is an independent nonprofit advisory body, that is consulted regularly by Minatom for advice on exportcontrol matters, and which has worked with a number of commercial enterprises to develop internal export control compliance mechanisms. More recently, the Center for International Trade and Security has been working with the Minatom Training Institute to develop an export control and nonproliferation trainingcurriculum for mid-level Minatom professionals. Dozens of managers go through the Institute every yew to receive training for advancement to senior levels in the Ministry. Khripunov remarked that the key to all these efforts was finding a good indigenous partner to work with and having enough seed money to launch the initiatives. In the future, Khripunov added that the Center would be very interested in seeing the new closed city nonproliferation centers add export controls to their research agendas. Otherparticipants thought it would be valuable to cultivate such an emphasis at the centers. Nonproliferation centers at the U.S. labs actively consult on U.S. export licensing decisionsand scientists from these centers also serve as technical representatives on U.S. diplomatic delegations to a number of multilateral nonproliferation regime meetings. It would beuseful to develop similar capacities on the Russian side. Khripunov also explained that the quality of the mid- and top-level personnel is important to success. The average age of the Russian weapons scientists is between 58 and 60. These older scientists are suspicious about innovation and markets while the younger people are more interested in business and new economic opportunities. Minatom is aware ofthe potential shortage of new younger leaders and is participating in a presidential initiative to train young people and establish an "Internal Leadership Reserve." U.S. universitiescan help by offering courses for older workers that put security matters into a more general framework, provide English language training, and training in public relations,economics, management, and personnel management. The University of Georgia is already teaching such courses through its cooperation with the Minatom Training Institute. Finally, Khripunov suggested that the Russian nonproliferation centers provide a newsletter or on-line news source on their projects, as it would be useful to have a reliable sourceof information in the United States on the status of U.S.-led cooperative nuclear security activities. Session II Wrap-up: Discussion of Potential New Missions and Opportunities Three basic categories of opportunities unfolded during the subsequent discussion: Extending existing nonproliferation activities to involve other closed city workers and scientists;developing new nonproliferation-oriented activities; and fostering greater integration between U.S. and Russian nonproliferation groups. Extending existing nonproliferation activities to involve other closed city workers and scientists: There was general consensus that the nonproliferation research and analysiscenters like those at Sarov and Snezhinsk should be replicated and established at other closed cities. RANSAC, the Princeton Center for Energy and Environmental Studies, andHarvard University plan to remain engaged closely with the existing centers and in identifying suitable personalities in other cities to lead new centers. One suggestion was that it might be feasible to set up warhead transparency centers in some of the serial production cities. It is not clear what kind of lasting, independentnonproliferation program of activities could be set up in the fissile material production facilities. As an alternative to establishing new nonproliferation centers in all of the othereight closed cities, it was proposed that the Sarov and Snezhinsk centers could engage scientists and workers in the other cities by contracting out technical tasks to them. Because there are a limited number of people who can potentially be employed by these centers to do policy analysis, it was suggested that the centers could move beyond policyanalysis and stimulate nonproliferation work at the technical divisions of the nuclear institutes, in the hope that they would see the benefit of converting to arms control technologyR&D. Arguing against this, however, is the fact that many nonproliferation technologies are considered sensitive in the United States and therefore the U.S. government may notwant to cooperate in funding secret Russian research. In addition to expanding the number of centers and trying to employ a greater number of scientists in nonproliferation and arms control research, it was recommended that keypersonnel at the centers be integrated into broader nonproliferation training programs that would expose them to the value of nonproliferation regimes and treaties, and how othercountries approach nonproliferation policies. As described above, the Center for Nonproliferation Studies at the Monterey Institute of International Studies already has a broad-based nonproliferation regime training that might be extended to include representatives of these centers. However, this sort of training probably has to happen in Moscow orelsewhere on the ground in Russia because of strict travel restrictions imposed on Russian nuclear scientists and workers. There were suggestions that the closed city nonproliferation centers should study several specific issues that stray from the realm of arms control, and deal more with the internalcharacteristics of the cities and the problems they face. Part of this effort should include understanding recent demographic trends in the closed cities. The Carnegie Moscow Center has done a survey of the situation in the nuclear citiesthat looks at a number of sociological and demographic questions, such as why the population of the cities is growing by about 10% yet unemployment there is worse than in therest of Russia. Other conference attendees wondered about the future quality of the work force in the closed cities. For example, if the cities are no longer getting students from thebest universities, and the quality of their labor force is declining, what implications will this have for business development and nuclear safety? There was general agreement thatthe nonproliferation center would provide a great service if they could produce a study evaluating short- and long-term demographic trends in the weapon complex and theirpossible effects on the stability of the cities. Another area recommended for study was the designation of the nuclear cities as "off-shore zones" where registered businesses receive a tax break. The nonproliferation centersshould evaluate these tax exemptions and whether they benefit the closed cities. However, at least one participant believed that the Russian centers would not be enthusiastic aboutresearch in these areas since it is not directly related to arms control and nonproliferation. Moreover, political support for these centers might erode if it is perceived that they aretaking on diverse subjects that weaken their nonproliferation agendas. Similar sentiments were noted about performing the demographic analyses described above. While thedemographic trends and the social situation in the cities have a direct bearing on business development, such research is less relevant and less interesting to scientists concernedwith nonproliferation and arms control matters. A final new area of research that was proposed for the centers was the issue of security around the closed cities, and a study of whether some of the more onerous restrictions andprocedures could be reduced without compromising overall security. For example, several participants cited the 45-day waiting period that Westerners must go through to beapproved for travel to the cities. To many observers, this seems an unnecessarily long time, and could be seems an unnecessary a substantial deterrent to potential investors. Severalconference participants wondered whether the review time could be reduced for repeat or return visitors to the closed cities once they had gone through an initial 45-day review. Developing new nonproliferation-oriented activities: While the new nonproliferation centers are valuable because they employ nuclear scientists in new, non-weapons-relatedresearch, another component of the centers' value will be their ability to inform official Russian nonproliferation policy. So, in addition to simply helping these centers becomelarger, more diverse, and mature organizations, it was widely felt that the Russian government should be persuaded to support the new nonproliferation centers in the closed cities,and to rely on their products in the formulation of official policy decisions. At least one participant noted a potentially applicable AID program that has trained Russian NGOs ininteracting with government officials and becoming respected policy architects. Along these lines, it was urged that the nonproliferation centers be given a more prominent role by the government in reviewing sensitive Russian export licenses. Elevating thecenters to such a position requires that their export control evaluation capabilities be enhanced, perhaps through a training program in the U.S. The nonproliferation centers at U.S.labs are endowed with export control expertise, and are consulted routinely by the DOE in its export control decisions; there are few reasons why the Russian nonproliferationcenters should not have similar functions. One participant explained, however, that a different center at Snezhinsk has already been assigned responsibility by Minatom to conductexport control evaluations. Therefore, it might make more sense (at least at Snezhinsk) to facilitate interaction between that center and the new nonproliferation research center atSnezhinsk, rather than charging the latter to advise on export control decisions. Other participants added that the Russian government should be persuaded to allow at least one representative from the nonproliferation research centers to travel with Russiandiplomatic delegations to relevant bilateral and multilateral nonproliferation meetings (such as the Non-Proliferation Treaty Preparatory Commission conferences and NuclearSuppliers Group meetings). It was noted that the U.S. delegations to these meetings typically have available several scientific staff from the DOE labs to evaluate technical issuesunder debate, while the Russian delegations frequently have no similar advisory capacity. Finally, it was observed that the closed city nonproliferation centers are in a unique position to report on and assess the implementation of various cooperative nuclear securityactivities sponsored by the Cooperative Threat Reduction program and the Energy and State Departments. Non-governmental policy analysts in the U.S. and elsewhere wouldbenefit if these centers created an electronic newsletter reporting on these activities and other major U.S. government and international programs affecting the Russian weaponscomplex. Greater integration and communication between various groups: As in the business and economic development session, the final area of recommendations from this portion ofthis meeting dealt with ways to improve overall coordination between the centers and other like-minded organizations. In this area, it was proposed that the primary order of business should be to develop a multi-organization peer review panel for the new centers. Until the centers become moremature organizations, it is envisioned that the oversight panel would serve several purposes, including: assisting the centers with their products; acting as an intermediary betweenthem and their funders; assisting the centers in fundraising and proposal development; assisting in grant conveyance; and ultimately helping them become self-sufficient enterprises. In addition to making enhanced nonproliferation training available for the staff of these centers, as described above, it was widely acknowledged that cooperation should be improved generally between the centers and U.S. NGOs concerned with nonproliferation.Although cooperation was not explicitly defined, examples might include basic information sharing, joint sponsorship of meetings or conferences, and joint development of journalarticles, reports, and studies. Along these lines, several attendees argued that stronger links should be developed between nonproliferation centers in the nuclear cities and nongovernmental nonproliferationresearch centers in Russia. There are a handful of important and influential arms control centers in Moscow, for example, that have established solid research reputations. Many ofthem have become self-sustaining over the past five or six years, and they could offer valuable lessons to the nascent centers in the closed cities. The Moscow-based NGOs havealso established information distribution channels that might be utilized to disseminate the new centers' research products. In short, such cooperation could help the newnonproliferation centers mature and gain greater acceptance from national policymakers. SUMMARY OF DAY 2 PROCEEDINGS Session III: Energy and Environmental Issues "Energy and Environmental Issues" Prepared by Mark Chao, Institute for Market Transformation The second day of the conference focused on potential collaborative opportunities between non-governmental institutions and the Russian nuclear cities in the fields of energy andthe environment. Introduction By Ken Luongo, RANSAC Executive Director Ken Luongo briefly reiterated the background and goals of the Nuclear Cities Initiative and described RANSAC's interest in coordinating a non-governmental program of activityto complement official NCI program. He laid out three questions for the conference participants to consider during the upcoming discussion of engaging the closed cities in energyand environmental work:
Session III: Energy and Environmental Issues Chaired by Robert Socolow, Center for Energy and Environmental Studies, Princeton University Rob Socolow outlined three major areas of possible collaboration on energy and environment issues: radioactive waste management; carbon management (broadly defined toinclude carbon sequestration, energy efficiency, and renewable energy); and environmental science. He observed that the United States already funds some energy andenvironmental work involving the Russian closed cities, but that this work is disjointed and needs to be coordinated with other American-supported efforts around Russia. Socolowalso noted that although the NCI so far has emphasized private-sector enterprise and contract research, the public sector should be considered the major potential supporter ofenergy and environmental work in Russia over the long term. Background on Lab-to-Lab Collaboration By Robert Schock, Center for Global Security Research, Lawrence Livermore National Laboratory Bob Schock provided an overview of collaboration to date between Russian and American nuclear-weapons laboratories, with a focus on activities involving Lawrence LivermoreNational Laboratory (LLNL). Schock mentioned that between 1992 and 1996, LLNL had engaged in about 225 projects with Russian counterparts. This joint research, fundedlargely through lab-to-lab contracts, but also through the Initiatives for Proliferation Prevention and the International Science and Technology Center, allowed LLNL to investigatea wide range of new technologies at very low cost. Schock estimated that it would have cost about twelve times as much to do the same research solely in the United States. Schock offered some perspectives and lessons from his experience with Russian scientists. He expanded upon Mark Taylor's comments from the previous day regarding thedifficulty of translating technical R&D into development of commercially viable products. He noted that LLNL itself would be lucky to achieve a success rate of one successfulcommercial application for every 100 research projects. Schock concluded that product development would not provide enough "low-hanging fruit" to sustain large-scale activity inthe closed cities. He suggested that commercially oriented technology transfer could perhaps be framed as a goal, but not as a mission. Schock also enumerated a number of practical problems that LLNL had encountered in its with work with Russia. Problems related to the transfer of money were noted foremost.The transfers had become unreliable to the point where collaborators from the Former Soviet Union once felt prompted to request the cessation of wire transfers from the UnitedStates, in order to conserve project funds for more secure use later on U.S. visits. Later, Tom Cochran noted the potential usefulness of a detailed report on such problems, even if itwere classified. Cochran also suggested that an NGO might prepare such a report. Schock concluded his presentation with a number of recommendations. He emphasized the need to define missions clearly, and to set goals and time frames within those missions. Clearly defined missions and goals, aside from imparting necessary clarity to the participating scientists, can play an important role in winning the support of governments andlaboratory-level decision-makers. He noted that policymakers must be on board from day one, and must be kept informed of changes. Schock also suggested that NGOs couldcomplement the NCI by bringing venture capital into play, and by helping to steer joint efforts around the bureaucratic roadblocks often encountered in risk-averse governmentagencies. General Political and Socioeconomic Context By Jonathan Elkind, Director, Russian, Ukrainian and Eurasian Affairs, National Security Council Jon Elkind offered a general over-view of the political and economic issues that affect NCI and other forms of collaboration and technical assistance between the United States andRussia. Elkind noted that the current period has been exceptionally challenging, but for now, major stresses in the Russian-American relationship have been satisfactorily resolved. He stated that the viability of casting a private-sector lifeline to the closed cities depends on the direction of fundamental Russian economic reform. Russia has made considerableprogress since 1991, but the August 1998 financial crisis makes clear that the work is not done. The Russian weapons labs could contribute to the development of private sectorenergy services, but this process requires the development of Russia's energy economy and accompanying demand for those services. The United States has sought to supportreform of Russia's energy economy with the primary goals of increasing efficiency and encouraging legal reform in the oil and gas, nuclear energy, and electric power sectors. Atpresent, over-taxation and the problem of non-payments for energy in Russia dampen market pull for greater efficiency and new technologies. David Goldstein argued that the weakness of market pull for goods and services is not a given, and may not be an insurmountable barrier. He noted that it is possible to change thestructure of the market at the margins to increase demand for particular products and services. Goldstein cited efforts by the Lawrence Berkeley National Lab, which developedlow-emissivity coatings for windows. An initial lack of demand for these coating was reversed by-changes in the energy codes, which were adopted largely as a result of NGOadvocacy. The Natural Resources Defense Council (NRDC) and the Institute for Market Transformation have been employing variations on this approach in Russia in order totransform the market for building elements. Elkind closed his remarks by emphasizing that a sound economy-wide transactional framework needs to be established for the full potential of various joint energy andenvironmental projects with the closed cities to be achieved. The road to wide-scale private sector development in Russia is inevitably bumpy, and navigating the course iscomplicated by lack of support on Capitol Hill and in other G7 countries for a more ambitious assistance package to Russia. Radioactive Waste in the Russian Nuclear Weapons Complex: Opportunities for Containment and Research By Don Bradley, Technical Group Manager, Pacific Northwest National Laboratory Don Bradley, author of a comprehensive book on the subject of contamination in the Russian nuclear complex, offered a detailed overview of radioactive releases from Russiannuclear weapons production sites. In general, the radioactive contamination picture in Russia is very bleak. Radioactive releases from the Russian complex are far greater thanthose of the United States. Total Russian releases are about 1,710 million curies (Ci), and are concentrated primarily around the three major fissile material production plants:Mayak (about 130 million Ci in surface contamination, including the Techa River and Lake Karachai); Krasnoyarsk-26 (about 450 million Ci in waste injected underground); andTomsk-7 (about 1,000 million Ci in injected waste and about 130 million in surface wastes). Bradley laid out areas for potential research in order of priority. First-tier priorities would include large migrating sources of radioactivity, including reservoirs, marshes, and theTom and Ob River systems around Tomsk-7, as well as Lake Karachai and other reservoirs and surface water at Mayak. The second tier includes deep well injection sites at Tomskand Krasnoyarsk, which represent large sources of unknown migration potential. The third tier comprises small migrating sources, including Chernobyl and uranium mining. Thefourth tier encompasses small sources of unknown migration potential, including deep injection at Dmitrovgrad, sites of "peaceful" nuclear explosions and nuclear tests, and the"Radon" radioactive waste storage sites. Bradley noted that Russian weapons scientists, who generally are not working on environmental issues, could play a role in helping understand the details of waste characterizationat the time of discharge or disposal. However, major responsibilities in this area are assigned to other agencies in Russia besides Minatom. Bradley also noted that great patience issometimes needed to undertake successful projects in this area. For example, it took years for the American side to win Minatom's confidence regarding work on certainenvironmental subjects. Bradley also pointed out that industrial and chemical waste problems in Russia might be much worse than radioactive contamination. He suggested thatthere might be synergy between deep injection research in Russia and deep injection of chemical wastes in the United States. Bradley described the ambitious joint Coordinating Committee for Environmental Management study on contaminant migration, which was designed to use the Russiancontamination "experience" to improve the United States' ability to characterize and model radionuclide migration at contaminated U.S. sites. Several major achievements havebeen made, including a 3-dimensional groundwater model of the entire West Siberian basin, which provides context for the Mayak, Tomsk, and Krasnoyarsk site models. He alsonoted ongoing development of a detailed 3-dimensional groundwater model of the Mayak site that will help simulate the Lake Karachai plume and the initiation of a similar study ofinjection areas at Tomsk. He then closed with some specific suggestions for initiatives that could be undertaken if international research centers at Sarov (Arzamas-16), Ozersk (Chelyabinsk-65), Seversk(Tomsk-7), and Zheleznogorsk (Krasnoyarsk26) were created. These activities could include focusing on wastes contaminated with weapons material, surface water contaminationand transport, deep well disposal, and geologic disposal. Rob Socolow asked whether ongoing U.S. - Russian work on waste remediation and analysis is being integrated with the NCI. Bradley responded that at present it is not, but thatthere is no reason for it not to be. Matthew Bunn suggested that to help fund the proposed research centers, some of DOE's R&D budget for remediation and cleanup technologiesmight be reprogrammed to Russian tabs. Bradley responded that some small efforts in this area are occurring already, with funding in the $100,000+ range, to develop pumps forremoving salt cakes from storage tanks. Bradley said that this technology was developed at Krasnoyarsk-26, and could have possible applications at the DOE's HanfordReservation, as well as at the Idaho National Engineering and Environmental Lab and possibly the Savannah River Site. Initiative for a Spent-Fuel Repository in Russia By Tom Cochran, Nuclear Program Director, Natural Resources Defense Council Tom Cochran briefed the group on the Non-Proliferation Trust and its efforts to create an international spent-fuel storage site in Russia. He argued that customers of the storagefacility (initially Asian countries reaching spent fuel storage capacity limits, such as Taiwan and South Korea, and possibly European nations) would be willing to pay a great dealto have spent fuel taken off their hands about three times the actual cost of managing it. Therefore, storing this material in Russia (at or near one of the closed cities with experiencein handling spent fuel, such as Krasnoyarsk-26, Tomsk-7, or Mayak) could generate tremendous revenues to help the country stabilize its nuclear weapon complex, tackleenvironmental problems, and improve fissile material security. Cochran stated that he and other members of the Non-Proliferation Trust (which includes Russian and American participants) had spent the past five months developing a proposalin which 6,000-10,000 metric tons of foreign spent fuel would be stored for 40 years in dry-casks at a location to be determined in Russia. The Trust would broker agreementsbetween customers and relevant Russian agencies, and would act as fiduciary agent. The Trust would provide funds for construction and management of a new storage facility inRussia. The remainder of the revenues would be allocated to support other needy programs in Russia, including fissile material security, environmental restoration programs,pensions and humanitarian support, wages for nuclear workers, NCI-related projects, and other Minatom R&D projects that would have to be approved by the Trust. Implementation of the proposed project, however, faces significant hurdles. For starters, approval of the U.S. is required for the transfer of much of the spent fuel, since most of itwould be of American origin. It would also require that the Russian Duma change the national radioactive waste law to allow importation of foreign waste. Agreement of theRussian federal and regional government agencies and the Russian president would also be necessary. Russian environmentalists have expressed opposition to the plan, based on three major concerns. First, they argue, Russian agencies can not handle spent fuel safely. Second, theybelieve the money to be allocated by the Trust to the various projects described above would be stolen by corrupt officials before it accomplishes its intended purposes. Third, thisapproach could be the first step down a slippery slope that ultimately opens Russia's borders to even greater quantities of nuclear waste from other countries. Cochran briefly addressed each of these concerns. He stated that American contractors, using facility designs licensed by the U.S., would construct and operate the storage facility,and that the dry storage casks would be produced by the German firm GNS mbH, which has substantial experience in this area. Cochran also noted that by funding improvedsequestration at Lake Karachai, the project could reduce overall radioactive releases and threats in Russia by an amount far greater than any plausible releases from the transport andstorage of the spent fuel. To protect against corruption, the U.S.-based executive trust would be overseen by Judge William Webster. This trust would administer project funds,with regular audits and without delivery of any funds in bulk to Minatom, or for projects deemed undesirable. As for the slippery-slope argument, Cochran added that the Russianradioactive waste law could close the gates to additional waste shipments after permitting the importation of a set amount. Emissions Trading and Achieving the Targets of the Kyoto Protocol By Richard Rosenzweig, Principal, Public Policy, Van Ness Feldman Richard Rosenzweig briefed the audience on the use of emissions-trading regimes as a means of implementing the Kyoto Protocol, with a focus on Russia. He provided anoverview of the concept of tradable emissions permits and their success in achieving cost-effective control of sulfur dioxide emissions in the United States. He also offered anoverview of the Kyoto Protocol, in which 37 Annex I countries have agreed to achieve varying percentage reductions in carbon emissions by 2008. Rosenzweig stated that emissions trading among countries will be an important means of achieving compliance for many Annex I countries. For instance, Rosenzweig sharedestimates that Canada could see a cost of $60-80/ton of avoided carbon emissions through trading, instead of about $450/ton without trading. He stated that trading has clearbenefits for the United States, which is showing sharp continued escalation of its own domestic emissions. Under an international system of emissions trading, significant amounts of money could flow to Russia and Eastern Europe, where there is tremendous technical potential foremissions reductions at relatively low cost. But dealing with Russia poses numerous problems, including the lack of institutional development, the possibility of phantomtransactions, and the so-called "hot air" problem achievement of emissions reductions via curtailment of economic activity. Also, European negotiators widely object to the UnitedStates seeking to buy its way to compliance through trading, while doing little to reduce its own emissions. Rosenzweig suggested that Russian weapons scientists might be usefully employed in developing systems for monitoring compliance with an emissions trading regime, includingthose required for measurement, certification, and tracking. Russian scientists could also report on energy savings, as well as extrapolate savings from avoided emissions. He notedthat there is an immediate need for pilot projects and initial trades. (Oleg Bukharin suggested that it would be natural for Russian regions to begin with their own power plants.) NGO support can tend credibility to such initial efforts. Pilot implementation should be completely out of government hands, at least in the opinion of Congress, which objects toattempts at "backdoor" implementation of the Kyoto Protocol. Energy Efficiency in Russia By Meredydd Evans, Associate Director, Advanced International Studies Unit, Battelle Meredydd Evans provided an overview of ongoing efforts to promote energy efficiency in Russia. Evans has worked closely with the Center for Energy Efficiency (CENEf), aMoscow-based NGO, and a leader in this area. CENEf has catalyzed about $100 million in energy-efficiency investments by local and regional government authorities through itsefforts. CENEf has been especially active in development and implementation of building codes and in the preparation of municipal and industrial projects for financing. There arenow about 50 regional NGOs promoting energy efficiency in Russia, as compared to only two in 1992. Evans stated that over $1 billion in energy-efficiency projects have been carried out to date in Russia. She enumerated a few major projects, including "Heat of Russia" (districtheating upgrades), a specific district-heating project in Chelyabinsk involving Honeywell, and business-plan training that led to $150 million in financing for a geothermal plant inKamchatka. She also noted that due to a combination of standards and market pull, Russian-made refrigerators are now twice as efficient as they were in 1993. Evans described some ideas for engaging closed-city personnel in energy-efficiency work, including the establishment of energy-efficiency centers in some of the closed cities andin other regions; pairing business experts with scientists in product development; modeling of energy use in buildings, industry, and district-heating systems; and design ofadvanced control equipment. She noted that energy savings in the closed cities could be applied to other needs. However, cooperation in this area is subject to a number of possible pitfalls including the lack of interest in nuclear cities generally for this type of work, problems in financingspecific projects, and economic limitations such as high taxes and the widespread use of barter. Tom Cochran asked if it would be possible to expedite shutdown of the plutonium production reactor in Krasnoyarsk-26 through efficiency upgrades in the civilian buildings thatreceive heat from the plant. Evans replied that the choice to pursue core conversion of the reactor to end plutonium production has deflected attention from integrated efficiencyimprovements in Krasnoyarsk-26. Mark Chao noted that ultimately, even if core conversion succeeds, it would be necessary to replace the whole station because of its age. Therefore least-cost replacement strategies should not be dismissed. Efficiency could reduce the required capacity of replacement energy sources. Excess capacity at Sayano-Shushenskoye dam could also help replace the reactor as a source of heat and electricity but planning and analysis are needed. Rob Socolow observed that getting Minatom interested in efficiency is not unlike getting the Atomic Energy Commission to endorse efficiency in 1960s. In the United States,energy efficiency was a low-tech intellectual backwater at that time. Now the field has been transformed and has a high level of prestige but Russia has not reached this level ofappreciation. Socolow suggested that Art Rosenfeld should persuade the DOE Assistant Secretary for Efficiency to contribute some resources to the NCI. Socolow suggested, morebroadly, that other U.S. government agencies providing funds for energy and environment R&D work in Russia (such as the EPA or NASA) should allocate a specific portion oftheir funding to Russian closed cities. Noting that such an effort can only come from high-level Administration leadership, Socolow urged Jon Elkind and his colleagues at the NSCpursue a high-level meeting between Vice President Gore and Department Secretaries to explore the possibility of broader agency involvement in the NCI. Overview of the Initiatives for Proliferation Prevention By Kennell Touryan, Manager, NIS Country Programs, National Renewable Energy Laboratory Ken Touryan provided an overview of the Initiatives for Proliferation Prevention (IPP) program. IPP involves 10 American national laboratories and 170 institutes in Russia,Belarus, Ukraine, and Kazakhstan, including institutes in closed cities. The goal of this effort is to assist these institutes in the development and commercialization of technology incollaboration with private industry. Areas of interest are wide ranging, and include projects in energy, environmental protection, material science, and other areas. Project funding levels have recently stood at about $25-30 million annually. At the time of the meeting, IPP was handling 430 projects (80 are in the product-development, or"Thrust 2," stage), and has engaged more than 6,200 Russian scientists. One key success of the program has been the involvement of the private sector in helping facilitate publicgoals. Touryan stated that U.S. business had provided $63 million, including in-kind support such as staff time, leveraging the $39 million in government funds that had beenprovided. A group of 85 firms have been organized into an entity known as the United States Industrial Coalition (USIC) to participate in the IPP program. Paul Herman noted, however, thatUSIC members do not work as a team and are interested mostly with "cherry-picking" development ideas through the program. Herman also noted alleged a lack of fairness ofopportunity for firms wishing to participate in the program. Touryan responded that USIC is aware of these potential problems, and has taken steps to make sure any company thatwishes to join USIC is allowed to do so if it pays the annual dues (ranging from $500 for small companies to $5,000 for large companies). Touryan noted that IPP and NCI have a close program kinship, despite differences in structure and intent. IPP can help NCI by sharing its established relationships and knowledgeof local skills in closed cities. Touryan suggested that some specific projects, such as the one involving the possible construction of a silicon production plant in Krasnoyarsk, couldbe transferred in the future from IPP to NCI. Session III Wrap-up: Discussion of Potential New Missions and Opportunities Socolow sifted through the day's discussion, identifying subject areas where non-governmental institutions could catalyze government support or undertake activities on their own. Specific project ideas were grouped into three categories (non-nuclear activities, nuclear-related projects, and policy and procedural issues), listed below. Non-Nuclear Areas Oil and gas. This area includes recovery, exploration, and general reduction of waste, building on services Minatom is already offering in leak detection and hazard analysis. Somebelieve that a mission in this area could double Russian oil reserves over a ten-year period by reducing inefficiencies. Fuel cell development. Another proposed mission area is utilizing Russian expertise in the closed cities to develop and miniaturize a commercial solid-oxide fuel cell system. Carbon emissions trading. This activity would involve working with, and sponsoring studies by, the Russian nuclear labs to inventory Russian carbon emissions and to developmethodologies and technologies for monitoring compliance. Energy savings. This would include facilitating collaborations between western manufacturers and nuclear city scientists in new energy efficient technology design anddevelopment, as well as working to deploy efficient energy equipment and techniques in closed city buildings and heating systems. Establishing energy efficiency centers in thesurrounding cities and regions might be a good first step in demonstrating the value of these collaborations to the closed cities. Additional activities in this area could include working with closed city scientists and researchers to study the impact of Russian utility restructuring and other regulatory changesthat would increase demand for efficient technologies and practices, as well as researching potential changes to transportation and building codes to make energy efficienttechnologies and techniques more attractive. Replacement of the Krasnoyarsk-26 and Tomsk-7 reactors. A mission in this area would be the development of a least-cost plan for replacement of Russia's remaining threeoperating production reactors by 2010. Work on the mission would involve analysis of end-use efficiency improvements, load management, alternative heat and electricity supply,and the feasibility of using existing electricity sources (such as hydropower) for heating in Krasnoyarsk. Environmental science. Although it was not addressed directly during the day's proceedings, this area of study would encompass research on the atmosphere, the oceans, and otherenvironmental systems. One of the first research subjects might be the effect of thawing permafrost on Siberian forest ecosystems given the immediate impact this would have onRussia. Self-descriptions of the nuclear cities. The value of self-descriptions can assist Program formulation in many areas as well as help in marketing the technical services of the Russianweapons facilities. Some of the work of the new nonproliferation centers (e.g. preparing the history of Russian plutonium production, history of the nuclear industry, analysis ofclosed-city legislation and policies) may help provide additional information on the environmental and energy histories of the cities. This could help prioritize future environmentalclean-up and energy development activities. New and improved energy technologies. This area might include joint research on the production and use of ethanol and the use of compressed natural gas. Chemical and industrial waste. Suggested activities in this area include joint research on the elimination of chemical weapons and industrial ecology (that is, modernizing industryand streamlining its use of energy and resources). Lessons learned from lab-to-lab experiences. Participants also thought it would be useful to synthesize experiences and lessons learned from previous environmental and energycollaborations between U.S. labs and Russian institutes. Such a study could elucidate further opportunities and benefits of lab-lab cooperation in this area, as well as outlinepotential pitfalls and obstacles to such joint efforts. Nuclear Areas Waste characterization, remediation, and disposal. It was proposed that ambitious new nuclear waste treatment, evaluation, and remediation centers be established at four Russiancities, as follows:
Commercial fuel-cycle services. Some participants suggested that the Russian nuclear complex could serve Russian and international markets in uranium enrichment and fuelfabrication, in addition to work being done under the HEU Purchase Agreement with the United States. Toward this end, it would be essential for the U.S. to modify domestic tradebarriers and to persuade other countries to follow suit, to allow Russia greater market access. Development of new nuclear power technology. Minatom facilities could collaborate with the United States in developing new generations of proliferation-resistant nuclear powerreactors. U.S. support, in collaboration with domestic reactor vendors, has led to significant research at Tomsk-7 on the high-temperature gas-cooled reactor. Some participants feltit would be natural to extend this cooperation to include the development of technology for extending the life of existing reactors. Decommissioning and dismantlement (D&D) of old defense facilities. In addition to examining the facilities of the closed cities themselves, research in this area could address thedismantlement of nuclear submarines and disposition of their reactor fuel. One participant mentioned that Russia is already experimenting with various D&D technologies,including a technology developed at Krasnoyarsk-26 for the isolation of radioactive metals through a slagging process. Tailings re-enrichment. Participants also raised the possibility that the United States might send uranium mill tailings to Russia for re-enrichment, as is being done already withEuropean tailings. The United States Enrichment Corporation might be a partner in such an effort given its existing cooperation with Russia under the HEU Purchase Agreement. One participant noted, however, that Russia already possesses an enormous quantity of its own tailings, and might not be eager to deal with the U.S. inventory before re-enrichingits own. Policy and Procedural Issues Beyond pursuing new activities in the closed cities like those described above, participants felt a number of policy and procedural issues would need to be addressed to improve thechances for success of the Nuclear Cities Initiative and U.S.-Russian energy and environmental cooperation more broadly. Coordinate and leverage existing American programs in Russia. Participants felt that bringing more resources and creative energy to bear on the problems facing the closed cities isessential for the NCI to meet its objectives. In the area of environmental and energy work, this might be accomplished through an interagency executive order, mandating thatexisting assistance programs and collaborative efforts in Russia supported by the EPA, NASA, and other agencies focus some significant share of their efforts and resources on theclosed cities. Similarly, conference participants believed improved coordination between offices and divisions of the Energy Department was a prerequisite for success. Programleaders within DOE should continue to seek synergies among IPP, NCI, and related programs, such as waste management and energy efficiency. NGO participation. It was suggested that RANSAC, in consultation with other groups, explore whether NGOs could be brought together into a consortium of some type to bettercoordinate their activities in the closed cities. NGOs may act more nimbly and creatively than government agencies. Financial support from foundations may fill key program gaps,especially given Congressional reluctance to provide more robust funding to NCI, IPP, and related efforts. Conditionality. A recurrent theme of both days' discussions was the importance of accelerating positive change in Russia by placing conditions on collaboration and materialassistance from American and international agencies. For example, it was noted that the EBRD and the World Bank have issued many loans to Russia. These loans and other formsof support could be used as leverage on the Russian government to support environmental remediation and create conditions that could lead to greater investment and growth ofentrepreneurship. Conditionality may also include requiring the Russian side to make time and resource contributions to joint efforts, and increasing transparency on how assistance from othernuclear security programs is utilized. For example, the total dollar amount of the HEU Purchase Agreement is believed to be approximately three times the total payroll of allclosed cities, but little is known in the U.S. about where those funds go. The United States should therefore exercise closer control over support, both to ensure that funds are notbeing diverted to support new fissile material production, and to discern whether those funds are being leveraged to fulfill multiple missions simultaneously. Finally, Americanagencies may stipulate that Russian collaborators provide matching funds, and they should ensure that payments are made to safe bank accounts. Ideally, program efforts in Russiashould be designed with self-sustaining financing mechanisms as with Superfund in the United States. Understanding the Russian perspective. Success in all efforts will also require a clear understanding of the unique conditions that underlie work in Russia. It was emphasizedrepeatedly that the U.S. must also understand Minatom's own priorities support for oil and gas industries and nuclear power safety, for example and its past conversion failures thatinvariably shape its approach to new collaborations with Western partners. |
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