The cost of living: the economics of preventing nuclear terrorism.

• Author: Weinzierl, Matthew C.
• Position: Outmaneuvering Terror

NUCLEAR terrorism presents an unparalleled threat to the United States. The economic impact alone of a nuclear terrorist attack would undoubtedly be staggering. Estimates of the direct economic cost of one potential scenario--a crude nuclear device detonated in lower Manhattan--range well over $1 trillion. Even this estimate cannot capture the full tragedy of such a scenario, which could include half a million deaths, a zone of total destruction one mile wide, and radiation extending for miles around the blast's center. For the protectors of America's national interest, no single issue is more urgent and frightening.

Such a scenario is a real possibility. As Graham Allison and Andrei Kokoshin wrote in these pages, "we must first be prepared to imagine the unimaginable--there is a substantial probability that within the next decade, an act of nuclear terrorism will occur." (1) These authors, and most who study the issue, reach this dire conclusion because a terrorist group needs to acquire only several kilograms of nuclear material to construct a functioning bomb out of the more than 2,000 metric tons of nuclear material that exist around the world.

Thankfully, nuclear terrorism is a finite problem. Simply put, nuclear terrorism is impossible without nuclear material, and the amount of nuclear material is finite. The quantifies that exist can be counted and, in principle, comprehensively secured. Additionally, the production of new nuclear material is beyond the technological reach of terrorist organizations, barring state sponsorship.

If sufficient financial and diplomatic resources are invested, the threat of nuclear terrorism can be substantially reduced or even eliminated. It is useful to think of preventing nuclear terrorism as an economic problem to be solved. Success, therefore, can be thought of as a "return" on the up-front investment. The question facing policymakers thus becomes: From the perspective of a country or group of countries investing in its future, is a comprehensive effort to prevent nuclear terrorism worth the cost?

For at least the first stage of such a comprehensive effort, the United States and its allies seem to have answered "Yes." The vast majority of nuclear material beyond America's borders is in the former Soviet Union, including 95 percent of the warheads, over 90 percent of the highly-enriched uranium and nearly half of the weapons-grade plutonium. Primarily to help Russia secure this material and address other threats, the United States has pledged to spend $10 billion over the next decade as part of a $20 billion overall threat reduction commitment by the G-8 launched at the Kananaskis summit in 2002 and recently reaffirmed at last summer's Evian summit.

It is true that assigning specific responsibility for the remaining $10 billion among G-8 member-states has not been simple: as of June 2003, only $7.4 billion had been pledged by the seven other nations, much of which is not dedicated to nuclear material specifically. (2) Neither has the overall implementation of the U.S. pledge been without obstacles. For instance, disagreement remains over liability for accidents. Nonetheless, the U.S. budgets for 2003 and 2004 both allocated approximately $1 billion to threat reduction efforts, as promised.

Projections of the likely investment required to complete the Russian program have varied substantially, generating concern over whether the G-8's pledges will be sufficient to finish the job--even if they are fully met. Research by Allison and others, including a study by Matthew Bunn...