Iran rejects IAEA-brokered proposal

Today’s news tells us that ”

And in a sermon at the main weekly prayers in Tehran on Friday, hardline cleric Ahmad Khatami gave vent to the misgivings of many in the regime.

“What guarantee do we have that if we deliver our enriched uranium, we will get the fuel?” he asked. “If they want to harm our rights, our response will be to enrich the fuel ourselves.”

In an interview with the New York Times on Thursday, the UN watchdog’s director Mohamed ElBaradei spoke of the difficulties of brokering a deal amid the legacy of suspicion between Tehran and Washington, which have had no diplomatic relations since the aftermath of the 1979 Islamic revolution.

“There’s total distrust on the part of Iran,” ElBaradei said.”

OK, let’s diagnose this from a game theory point of view. Here we have a classic case of a time inconsistency problem: turn over enriched uranium today to a third-party (whose interests are different from Iran’s) and tomorrow the third party promises to deliver the enriched uranium in a transformed form for medical use. What guarantee, indeed, is there that the other party, once it takes possession of the uranium, will meet its end of the bargain. Those of us in the United States and Western Europe take on faith that our governments will act honorably but those with the most to lose do not. There is, in fact, no credible commitment in the deal.

What is needed is an arrangement that protects Iran’s right to enrich uranium for peaceful uses under the Nonproliferation Treaty while reassuring the rest of us that it will not build a nuclear weapon. Here is one idea of how to achieve this:

Simultaneously:

1. Iran agrees to allow IAEA inspectors to shut down — but leave intact –  Iran’s centrifuges and to maintain as many inspectors on site as the IAEA believes it needs to guarantee that the centrifuges remain shut down.

2. The UN, with the financial backing of the US, EU, Russia and China, agree to provide Iran with a negotiated amount of civilian energy and medical isotopes. Iran pays part of the cost equal to the cost it would have borne in generating such energy and medica