Dr. Leif Svalgaard writes advising me of this new paper published Jan. 17. After reading it, I’ll have to say that it isn’t a matter of “if” – it’s a matter of when we’ll get another CME like the Carrington Event in 1859 – which had it occurred today, would plunge our society into darkness and chaos as our sensitive electronics, networks, and power systems fail world-wide. The authors call such an event a “global Hurricane Katrina.” If activists and global warming worriers spent just a fraction of the time and money spent on on climate hysteria preparing for this inevitable event, we could ensure a continuance of our way of life. As it stands, they seem blind to this looming and certain threat and prefer squabbling over a few tenths of a degree change in temperature that may or may not be entirely man-made.
Excerpts of the paper follow.
Edward J. Oughton , Andrew Skelton, Richard B. Horne , Alan W. P. Thomson3, and Charles T. Gaunt
Extreme space weather due to coronal mass ejections has the potential to cause considerable disruption to the global economy by damaging the transformers required to operate electricity transmission infrastructure. However, expert opinion is split between the potential outcome being one of a temporary regional blackout and of a more prolonged event. The temporary blackout scenario proposed by some is expected to last the length of the disturbance, with normal operations resuming after a couple of days. On the other hand, others have predicted widespread equipment damage with blackout scenarios lasting months. In this paper we explore the potential costs associated with failure in the electricity transmission infrastructure in the U.S. due to extreme space weather, focusing on daily economic loss. This provides insight into the direct and indirect economic consequences of how an extreme space weather event may affect domestic production, as well as other nations, via supply chain linkages. By exploring the sensitivity of the blackout zone, we show that on average the direct economic cost incurred from disruption to electricity represents only 49% of the total potential macroeconomic cost. Therefore, if indirect supply chain costs are not considered when undertaking cost-beneﬁt analysis of space weather forecasting and mitigation investment, the total potential macroeconomic cost is not correctly represented. The paper contributes to our understanding of the economic impact of space weather, as well as making a number of key methodological contributions relevant for future work. Further economic impact assessment of this threat must consider multiday, multiregional events.
Space weather disturbances of the upper atmosphere and near-Earth space can disrupt a wide range of tech- nological systems [Hapgood et al., 2012]. Over the past decade many reports have analyzed the potential effects of extreme space weather on electricity transmission infrastructure [Space Studies Board, 2008; OECD, 2011; JASON, 2011; North American Electric Reliability Corporation, 2012; Cannon et al., 2013]. The economic costs associated with these extreme events have been heralded as being as high as $1–2 trillion in the ﬁrst year, equivalent to a so-called “global Hurricane Katrina.” To date, however, there has been a lack of transparent research around how these direct and indirect economic costs actually stack up, which is surprising given the level of debate and uncertainty surrounding the vulnerability of electricity transmission infrastructure to extreme space weather.
Research in this paper has been produced by a similar team that originally developed the Helios Solar Storm Scenario [Oughton et al., 2016]—the ﬁrst space weather stress test for the global insurance industry. Ultimately, these are different pieces of work. Helios purposefully explored the sensitivity of economic loss due to different temporal restoration periods, in order to provide a tool for stressing the portfolio exposure of global insurance companies. Helios is not a prediction but a hypothetical range of scenarios to enable miti- gation of space weather risks in the insurance industry. On the other hand, this paper focuses purely on the daily direct and indirect economic consequences of how an extreme space weather event may affect U.S. domestic production, as well as other nations via supply chain linkages, based on different blackout zones.
Two opposing views have emerged. On the one hand, some believe that the potential damage would not be that large and that we are relatively well prepared to deal with an extreme geomagnetic disturbance (GMD). The worst case scenario is seen to be an electrical collapse of the transmission grid, probably initiated by loss of voltage stability that will consequently protect the power system assets from damage. The grid connec- tions could then be reestablished, leading to a disruption only lasting hours or a few days. On the other hand, there are those who believe that damage might be initiated before a system loses stability or might occur outside the region of the electrical collapse and that we could end up with extensive damage to equipment and a doomsday-type catastrophe scenario where blackouts last weeks, even months, until exposed assets (with many supply issues) are replaced. There is still disagreement among these perspectives, and therefore, it is not surprising that the recent U.S. National Space Weather Action Plan [National Science and Technology Council, 2015] identiﬁes the need for improved assessment, modeling, and prediction of the impact of this threat on critical infrastructure systems. Although there has been substantial development in the credibility of these perspectives in recent years, there is a valid need to explore how disruption to electricity transmis- sion infrastructure might affect our economy and society.
Modern economies increasingly rely on a variety of critical interdependent infrastructure systems powered by electricity. Although space weather can be caused by a variety of phenomena including solar particle events and bursts of electromagnetic radiation from solar ﬂares, it is coronal mass ejections (CMEs) which are mostly associated with the long-term catastrophe scenarios that have been characterized in the literature. CMEs pose the main risk to Earth and its modern, technological society because large (1012 kg), relatively dense (100/cm3), and fast (>500 km s-1) CMEs hitting Earth with a southward interplanetary magnetic ﬁeld direction (Bz) can give rise to extreme GMDs [Möstl et al., 2015; Temmer and Nitta, 2015; Balan et al., 2014].
Signiﬁcant events may see quantities considerably larger than the numbers stated here. These have the potential to damage and disrupt the aviation, satellite, GPS, and electricity networks that our economy and society depend on. This is particularly problematic because failure in the power sector can cascade to other critical interdependent infrastructure systems, disrupting business activities and inducing a range of other economic and social consequences that can affect the global economy [Ouyang, 2014; Anderson et al., 2007; Haimes and Jiang, 2001; Rinaldi et al., 2001].
In particular, it is acknowledged that an extreme GMD has the potential to generate geomagnetically induced currents (GIC) that could initiate permanent damage to extra high voltage (EHV) transformers. Failure in these critical assets could cause system-wide instability issues leading to cascading failure. Further, such high-value assets are not necessarily easy to procure and replace in the short term. Understanding the economic impact of space weather risks can improve mitigation procedures and practices, as it can guide where limited resources should be allocated to improve economic resilience. Moreover, in industry it is not just utility com- panies who are concerned with catastrophe scenarios; the potential loss to insurance companies due to casualty and business interruption payouts could be enough to threaten the viability of certain companies in this sector (despite the use of limits and deductibles on insurance policies). Even during a relatively calm period of solar activity (2000–2010), Schrijver et al.  have shown that there can be signiﬁcant equipment loss and related business interruption claims for the insurance industry. Estimates of the potential economic loss associated with catastrophic events are able to be used to stress test asset exposure in the insurance industry and beyond. Indeed, in the UK General Insurance Stress Test 2015 undertaken by the Bank of England’s Prudential Regulation Authority (PRA), insurers are required to undertake exposure stress tests for an extreme space weather event.
The scope of this paper has been guided by a recent workshop that focused on understanding the potential impacts of extreme space weather on the global economy. Held at the Judge Business School, University of Cambridge, UK, this event gathered together representatives from space physics, economics, catastrophe modeling, actuarial science, and law, with those from the property, casualty, and space insurance industry. Now that the motivation for the paper has been introduced, section 1 will present background material and examine past events. Section 2 will outline the methodology, and section 3 will report the results and discussion. Finally, conclusions will be presented in section 4.
This paper explored the direct and indirect daily economic costs associated with different scenarios of extreme space weather on mainland U.S., focusing on the upstream and downstream supply chain impact. The total daily economic loss to the U.S. economy associated with a storm within 55° ± 2.75° geomagnetic latitude (S1) was $6.2 bn (15% of daily U.S. GDP). This is predicated on approximately 8% of the population being left without power. This is supplemented by an indirect loss to the global economy via supply chain linkages with other nations of $0.8 bn per day. The total daily economic loss to the U.S. economy associated with a storm within 50° ± 2.75° geomagnetic latitude (S2), leaving 44% of the U.S. population without power, was $37.7 bn (91% of daily U.S. GDP). The indirect loss to the global economy via supply chain linkages with other nations is a further $4.8 bn per day. The S3 scenario with a blackout zone of 45° ± 2.75° geomagnetic latitude (S3) left 23% of the population without power. The total daily economic loss to the U.S. economy was
$16.5 bn (41% of daily U.S. GDP), and the indirect loss to other nations totaled $2.2 bn. Finally, the S4 scenario (50° ± 7.75° geomagnetic latitude) affected 66% of the U.S. population leading to an estimated potential eco- nomic loss of $41.5 billion per day to the U.S. economy (100% of daily U.S. GDP), combined with a daily loss to the global economy of $7 billion.
A key ﬁnding was that the direct economic cost incurred from disruption to electricity within the blackout zone was only a fraction of the total cost for those scenarios explored. On average in this study, only 49% of the total economic loss took place in the area affected by the storm, with a further 39% being lost indirectly in the U.S. outside of the blackout zone. A total of 12% of the impact took place internationally. Therefore, there is a great need when undertaking cost-beneﬁt analysis of space weather forecasting and mitigation investment to consider the domestic and global indirect costs that could accrue via supply chains disruption; otherwise, the potential total cost is not being correctly represented.
However, this analysis focused only on the U.S., when in reality we could be susceptible to a multiday, multi- regional extreme space weather event. As a consequence, there is a need to undertake further economic impact assessment including Europe and East Asia, with multiple blackout zones, in order to understand the potential global cost associated with this threat.
Full paper –open access: http://onlinelibrary.wiley.com/doi/10.1002/2016SW001491/full