Previous studies have focused on direct economic costs within the blackout zone, failing to take account of indirect domestic and international supply chain loss from extreme space weather.
According to the study, published in the journal Space Weather, on average the direct economic cost incurred from disruption to electricity represents just under a half of the total potential macroeconomic cost.
The paper was co-authored by researchers from the Cambridge Centre for Risk Studies at University of Cambridge Judge Business School, British Antarctic Survey, the British Geological Survey and the University of Cape Town.
Under the study’s most extreme blackout scenario, affecting two-thirds of the US population, the daily domestic economic loss could total $41.5 billion plus an additional $7 billion loss through the international supply chain.
Electrical engineering experts are divided on the possible severity of blackouts caused by “Coronal Mass Ejections,” or magnetic solar fields ejected during solar flares and other eruptions. Some believe that outages would last only hours or a few days because electrical collapse of the transmission system would protect electricity generating facilities, while others fear blackouts could last weeks or months because those transmission networks could in fact be knocked out and need replacement.
Extreme space weather events occur often, but only sometimes affecting Earth. The best-known geomagnetic storm affected Quebec in 1989, sparking the electrical collapse of the Hydro-Quebec power grid and causing a widespread blackout for about nine hours.
There was a very severe solar storm in 1859 known as the “Carrington event” (after the name of a British astronomer). A widely cited 2012 study by Pete Riley of Predictive Sciences Inc. said that the probability of another Carrington event occurring within the next decade is around 12 per cent; a 2013 report by insurer Lloyd’s, produced in collaboration with Atmospheric and Environmental Research, said that while the probability of an extreme solar storm is “relatively low at any given time, it is almost inevitable that one will occur eventually.”
“We felt it was important to look at how extreme space weather may affect domestic US production in various economic sectors, including manufacturing, government and finance, as well as the potential economic loss in other nations owing to supply chain linkages,” says study co-author Dr Edward Oughton of the Cambridge Centre for Risk Studies.
“It was surprising that there had been a lack of transparent research into these direct and indirect costs, given the uncertainty surrounding the vulnerability of electrical infrastructure to solar incidents.”
The study looks at three geographical scenarios for blackouts caused by extreme space weather, depending on the latitudes affected by different types of incidents.
If only extreme northern states are affected, with 8 per cent of the US population, the economic loss per day could reach $6.2 billion supplemented by an international supply chain loss of $0.8 billion. A scenario affecting 23 per cent of the population could have a daily cost of $16.5 billion plus $2.2 billion internationally, while a scenario affecting 44 per cent of the population could have a daily cost of $37.7 billion in the US plus $4.8 billion globally.
Manufacturing is the US economic sector most affected by those solar-induced blackouts, followed by government, finance and insurance, and property. Outside of the US, China would be most affected by the indirect cost of such US blackouts, followed by Canada and Mexico as these countries provide a greater proportion of raw materials, and intermediate goods and services, used in production by US firms.
Oughton, EJ et al. Quantifying the daily economic impact of extreme space weather due to failure in electricity transmission infrastructure. Space Weather; 18 Jan 2017; DOI: 10.1002/2016SW001491
Adapted from a press release by the Cambridge Judge Business School.