Why Disasters Matter

to Economic Development Professionals

Gail Fujita, EDR/Hawaii & Pacific2012 EDA Seattle Region Conference

Economic Costs & Impacts

• Extreme COSTS • Severe DISLOCATION

• Long-lasting IMPACTS

Economic Costs of Disasters

9/11$21.8 bil. New York buildings replacement

$500 mil. Pentagon repairs.$ 40 bil. Insured losses.$ 5 bil. 3-day losses of grounded flights$19.6 bil. US airline revenue losses (2001-

02).

$ 8.7 bil. Lifetime earnings of World Trade Center victims

Economic Costs of Disasters

2011

$380 billion worldwide

• Including earthquakes in Japan & New Zealand.

• Major floods in Thailand and other countries.

Economic Costs of Disasters2011 US Catastrophies

• Central/Northeast blizzards (Jan. 29-Feb. 3) - $1.1 bil. insured losses.

• Midwest/Southeast tornadoes – $16 bil. (Apr. 4-5, 8-11, 14-16, 25-30, May 22-27).

• Southwest/southern plains drought, heat wave, wildfires (Spring/Summer) - $5+ bil.

• Midwest flooding (Summer) - $2+ bil.

• T.S. Irene (Aug. 27-28) - $3-5 bil. insured losses.

Economic Costs of Disasters2011

Sustained Impacts

KATRINA - 2005

Chernobyl - 1986

Drivers of Change .

The Gamer Changers

• Technology• Demography• Environment/Climate

change• Global Economics

Game Changers .

TECHNOLOGY

• Rapid pace of advances

• Nearly every facet of life is affected by change.

• Ubiquity of technology is creating new risks.

Speed of Money today

Time at China sell-off 06:30 13:00 -1day 02:00

Impact/Elapsed time 15.0 hrs 4.5 hrs -0-

It only takes an average of 4.4 flights from any city

to any other point.

Over half of the cities (56%) are connected with 4 or less flights.

Game Changers .

DEMOGRAPHY• US population is growing, aging

significantly (1 in 5 over 65 yrs), and is more ethnically diverse.

• People are living in more densely populated urban & coastal areas (more vulnerable to severe weather).

• Technology is redefining “community”, changing how individuals interact.

Threat to Economic Security50% of world’s population is exposed to risk.

By 2050, the world needs:

•50% more food; •45% more energy; and •30% more water.

Game Changers .

ENVIRONMENTAL DRIVER

• Climate Change/sea-level rise effects and more intense storms

• Water resources will be stressed.• Human health faces new threats.• Wildland fires will increase, shift to

previously unaffected areas.• Mass migration will increase

conflicts and shifts in disease patterns.

Downtown Honolulu: ocean levels 39-inches higher

Game Changers .

GLOBAL ECONOMICS• Economic competitiveness is

driving a growing reliance on just-in-time delivery.

• Global supply chain becomes more vulnerable which means catastrophes abroad have a greater impact domestically.

Tokyo Electric Power Co / HO / ReutersTsunami Hits Fukushima Nuclear Power Plant. In a photograph released by Tokyo Electric Power Co. on May 19, 2011, tsunami waves approach the Fukushima Daiichi nuclear power plant near its No. 5 reactor on March 11, 2011 in Fukushima Prefecture, Japan.

Japan (Mar. 11, 2011)

volcanic haze causes aviation cancellations

SOLAR STORMS can affect GPS satellites, electric power grids, and airline flight patterns.

In 1989, the entire Quebec power grid was blacked out for 12 hours.

BLACK SWANS• Natural disasters

• Terrorism & manmade disasters

• Disease

• Economic emergencies

DisastersHomeland Security is:

Economic Security

Sustainability

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