THE ECONOMIC IMPACT OF INFRASTRUCTURE DISRUPTION

What would be the economic impact of a terrorist attack on critical infrastructure? A good measure to use is the 2003 northeastern blackout. Anderson consulting ("Northeast Blackout to reduce US earning $6.4 billion") did a relatively thorough study of the impact. Here are the highlights:

• Lost income to workers and profit reductions of companies: $3.12 to $5.2 billion.


• Spoilage (food, etc.): $380 to $940 million.


• Additional police and emergency services: $15 to $100 million.


• Higher utility rates (for repairs and overtime): $1 to $2 billion.

The total economic impact estimated by Anderson ranges between $4.51 and $8.24 billion.

Other economic impacts (to put this blackout in perspective):

• The 2002 Port shutdown: $1.67 billion


• The 1998 GM strike: $2.7 billion

One interesting factoid: The blackout occured on a Thursday afternoon. If it had occured on a Monday or a Tuesday, lost production would have been double.

This estimate provides a good starting point for further analysis. Specifically, areas I have focused on (in my upcoming book) are:

• The impact of cascading failures across multiple infrastructures.


• The impact of mulitiple attacks across different infrastructures.


• Sustained attacks over an extended time period.

Comments

[Chris Arsenault]

Although I appreciate your careful analysis, I'm beginning to wonder about the wisdom of fully disclosing potential impacts. With self-knowledge we can defend, but it also can be used against us. Although it might be flattering to have your book being read in various circles in Pakistan, and other Middle Eastern countries, I don't think it would be wise.

On the other hand, if your book talks about decentralization strategies in relation to relative losses and explores the upside of a national decentralization effort, thus stimulating real action in that direction, that would be very helpful.