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Key Issues Ethics Issues Economic Aspects of Conversion

Economic Aspects of Conversion

Nuclear weapons costs
In the early days of the nuclear arms race, it was commonly asserted that nuclear weapons provided "more bang for the buck." While the exponentially greater explosive power of nuclear weapons may indeed render them cheaper per kiloton equivalent of explosive, this statement hides the true economic costs of nuclear weapons. In monetary terms alone, the US has spent $5.5 trillion dollars in developing its nuclear arsenal and France has spent about $1.5 trillion. Figures for other states are not available.

The US continues to spend $35 billion annually on nuclear weapons programs. This includes

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stockpile maintenance, research and development

These costs do not include the health and environmental damage from nuclear weapons programs - including nuclear testing and fissile material production - nor the associated economic costs of loss of land and human work hours and increase in medical costs. Nor do they include a conservatively estimated $320 billion for storage and disposal.

Opportunity costs
Every gun made, every rocket launched, represents in the final sense a theft from those that are hungry but not fed.

It has been estimated that the investment required to solve the major human need and environmental problems facing humanity would be approximately US$260 billion annually for 10 years. This includes eliminating starvation, providing adequate health care & AIDS control, providing shelter & clean water, eliminating illiteracy, providing sustainable energy, retiring developing nations debt, stablising the population, stopping deforestation, preventing global warming and removing landmines. The total cost is less than half of what the US has spent on nuclear weapons.

Proponents of nuclear weapons research and development often cite economic benefits of such research arguing that it generates technological spin-offs which have led to economic advancement. For example, NAVSTAR satellites, originally developed to provide pinpoint accuracy for ballistic missiles, are now finding widespread commercial use as part of hand-held directional finders and automobile electronic atlases. However, the extent of civilian benefits from nuclear weapons spending is necessarily restricted due to the secrecy of much research and the specific orientation to military purpose. If a comparable amount of public money were spent in civilian research and development, the returns would most likely be much greater.

Disarmament costs
Experience from the START I and INF treaties indicates that nuclear disarmament costs can be high, although this depends a lot on the degree of verification required. Projected US costs for dismantlement and verification under these two treaties is approximately $31 billion. However this does not include clean-up costs which could reach a staggering $365 billion.

Russia is experiencing difficulties in meeting the costs of current programs of dismantlement and disposition, threatening their continuation. In response the US has provided $10 billion to help dismantlement and secure fissile materials, including the purchase of highly enriched uranium from dismantled bombs.

The full cost for the total dismantlement and destruction of nuclear weapons, disposal of fissile material and cleanup of nuclear sites is impossible to determine at this time, and depends on a number of policy decisions including the speed of destruction, the types and complexity of verification systems and the method of fissile material disposition.

Regardless of the cost, it will be cheaper to embark on a complete nuclear disarmament program than maintain current programs of nuclear weapons maintenance and modernisation, which merely delay these costs into the future and add costs for extra weapon dismantlement and clean-up.

Nuclear conversion refers to the transformation of nuclear weapons facilities and supporting industries to non-weapons purposes, or to disarmament purposes. The possibility of conversion can reduce the nuclear weapon industry's opposition to nuclear disarmament by ensuring that there continues to be jobs for workers and economic benefits for corporations. The development of the Co-operative Monitoring Center at Sandia National Laboratories, is a good example of a nuclear weapons facility and its employees beginning a transformation towards nuclear disarmament.

However, some economists argue that conversion should not be over-emphasised and that nuclear weapons corporations should adhere to the same economic realities as other corporations. It is generally assumed that once an industry's product is no longer needed, it is best to lay-off the people making the unneeded products and find them new jobs in industries whose products or services are required. It may be better to utilise corporations with experience in the products or services required rather than trying to convert a corporation that is not experienced.

Atomic Audit: The Costs and Consequences of US Nuclear Weapons since 1940, Stephen Schwartz (ed), Brookings Institution, 1998.
Security and Survival: The Case for a Nuclear Weapons Convention, Datan and Ware, IPPNW , Cambridge MA 1999 Section 3-31 to 3-40
World Game Institute: What the World Wants. http://www.worldgame.org/wwwproject/index.shtml

Prepared by Alyn Ware, Coordinator of the Parliamentary Network for Nuclear Disarmament, a project of the Middle Powers Initiative.