Atoms for Peace, Redux Kyle Beardsley & Jamus Jerome Lim * May 14, 2008 Abstract The likelihood that North Korea possesses nuclear weapons is a clear and present danger to sustained stability in the Korean peninsula. Unfortu- nately, the traditional notion of “Atoms for Peace” has been a failure in the engagement of the North. In this paper we propose a novel approach to mutual cooperation in energy provision on the Korean peninsula, premised on having North Korea host reactors that deliver energy to South Korea. We establish conditions where there exists a stable, time-consistent equi- librium where the North never finds it in its interest to disrupt energy supplies to the South, and where the South is willing to pay the fixed costs of nuclear plant construction, in exchange for a discounted stream of energy supply from the North. Keywords: Nuclear policy, Korean peninsula JEL Classification: D74, D78 * Emory University and the World Bank, respectively. Corresponding author: Kyle Beard- sley, 317 Tarbutton Hall, Department of Political Science, Emory University, Atlanta, GA 30322. Email: kyle.beardsley@emory.edu. The idea that birthed this project was due to con- versations with Jude Egan and Lance Kim. We thank them, together with Anne Collins and seminar participants at the Institute on Global Conflict and Cooperation’s winter retreat in Washington, DC, for helpful comments and suggestions; all errors are our own. IGCC also provided generous financial and intellectual support throughout. 1