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Study: US could lose over $40B daily from extreme space weather blackouts

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Study: US could lose over $40B daily from extreme space weather blackouts

Blackouts caused by extreme space weather could cost the U.S. tens of billions of dollars each day, and a significant portion of those losses could occur from indirect costs outside of a "blackout zone," according to a new study published in a journal of the American Geophysical Union.

Under the most extreme scenario examined in the study, which would effect 66% of the population, daily domestic economic loss from blackout impacts could total as much as $41.5 billion, and an extra $7 billion could potentially be lost through the international supply chain, the study said.

The study, published in Space Weather, examined possible costs associated with electricity transmission infrastructure failure in the U.S. due to extreme space weather, specifically concentrating on daily economic loss. It also took into account indirect economic costs, a factor often ignored in other studies of a similar nature, according to the study's authors.

On average, the study found that 49% of the total economic loss would occur in the area affected by the a solar storm. Another 39% would be lost indirectly in the U.S. outside of the blackout zone, and 12% would be felt internationally.

Under one of the scenarios examined where only extreme northern states were affected, or 8% of the U.S. population, daily economic losses to the U.S. economy could reach $6.2 billion, or 15% of daily U.S. GDP, the study found. The largest losses would occur in Washington state, followed by Wisconsin and Minnesota. Additionally, an $800 million loss would occur to the international supply chain.

A different scenario analyzed 44% of the U.S. population, including people living in key industrial states such as New York, Illinois, Pennsylvania, Ohio and Michigan. The U.S. would incur economic losses of $37.7 billion per day, or 91% of daily U.S. GDP, with international daily losses climbing to $4.8 billion.

Manufacturing would be the U.S. sector that experienced the most economic impact from a solar blackout, followed by government, finance and insurance, and property, the study said. The indirect costs of those blackouts would affect China the most internationally, as well as Canada and Mexico because of the proportion of raw materials and intermediate goods and services used in U.S. production.

"Disruption to supply chain linkages prevents normal economic activities taking place," the study said, pointing to inoperability in critical infrastructure sectors as one of the main ways disruptions can ripple through the global economy. "Consequently, extreme space weather events have the potential to disrupt the production, distribution, and consumption of both goods and services around the world."

The study's authors recommended including indirect costs that could accumulate in the U.S. and on a global scale through supply chain disruption as a factor in future cost-benefit analyses of space weather forecasting and mitigation investment. If those costs are not considered, the "potential total cost is not being correctly represented," the authors said.

"Modern economies increasingly rely on a variety of critical interdependent infrastructure systems powered by electricity," the study said. "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 which are mostly associated with the long-term catastrophe scenarios that have been characterized in the literature."

The study's authors concluded that extreme space weather events would likely occur on a global scale, leaving the world susceptible to a multiday, multiregional blackout. Since their analysis was focused on the U.S., they said that further study must be done to assess the economic impacts in places like Europe and east Asia that have multiple blackout zones.

"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," study co-author Edward Oughton of the Cambridge Centre for Risk Studies at Cambridge Judge Business School said in a statement.