Iran’s nuclear program is no bargain

The Iranian government prohibits the media from publicly discussing the nuclear issue, thus suppressing a domestic debate on the rationale behind the nuclear agenda. A joint Carnegie Endowment-Federation of American Scientists report, Iran’s Nuclear Odyssey: Costs and Risks, attempts to tackle the unanswered questions regarding efficiency and security.  This week’s panel discussion at Carnegie concluded that domestic nuclear enrichment is illogical and most likely unsafe.  Domestically enriching uranium incurs high costs and uncertain benefits for Iran.

Despite Iran’s claims that the country’s future energy security relies on the ability to enrich uranium domestically, Iran currently has little need for nuclear fuel. In its fuel security assessments Iran has failed to consider both the scarcity and the low grade of its domestic uranium resources. Ultimately these limitations would force Iran to procure uranium from abroad, completely defeating the purpose of domestic enrichment capabilities. The IAEA doesn’t even rank Iran as one of the top 40 countries with uranium reserves. Why would a major oil and natural gas supplier hold its economy hostage to development of its unimpressive nuclear capabilities?

In their report Ali Vaez –Senior Iran Analyst, International Crisis Group–and Karim Sadjadpour–Senior Associate of the Middle East Program, Carnegie Endowment—conservatively estimate losses  in foreign investment and oil revenue as a result of the nuclear program at $100 billion. The Bushehr reactor –one of the world’s most expensive–would provide only 2% of Iran’s electricity generation. To make matters worse, the reactor sits on the intersection of three tectonic plates. A non-signatory of the Convention on Nuclear Safety, Iran possesses some of the least secure nuclear materials in the world.  James Acton, Senior Associate of the Nuclear Policy Program at Carnegie, characterized Iran’s “regulatory complaisance”’ as symptomatic of the hubris that caused the Fukushima accident.

The ideological drive behind Iranian decision-making serves a political, not an economic purpose. Financial economist Mohammad Jahan-Parvar argued economic decision-making at the macro level is limited to Supreme Leader Khomenei and his underlings. Khomenei’s policies center on promoting “progress” in the esoteric fields of “spirituality,” “wellbeing” (not welfare) and “chronic knowledge.” Khomenei’s “progress” in no way promotes economic development. Twenty per cent of development funds are allocated to the agricultural sector, which produces 12% of GDP and 7% of Iran’s employment.  But the agricultural sector represents the regime’s greatest support base.

As the report’s cost-benefit analysis suggests, Iran has not embarked on its nuclear odyssey for peaceful nuclear enrichment. Thus it concludes:

1. Economic pressure and military force will not lead Iran to abandon its “sunk costs” and halt the nuclear program.
2. The nuclear issue cannot be resolved without a mutually agreeable diplomatic solution.
3. Iran should pursue alternative energy options, including solar and wind power.
4. Public and nuclear diplomacy should complement each other, with the West demonstrating that an integrated and prosperous Iran is everyone’s goal.