Should a powerful solar storm hit Earth, the event could cause blackouts that will likely result in $41.5 billion daily economic losses in the United States alone.
Carrington Event
The most powerful solar flare documented to strike Earth is the Carrington event. The coronal mass ejection, which is produced during solar flares, that struck Earth on September 1859 caused auroras around the world.
Telegraph systems in Europe and North America failed and operators had electric shocks from the devices as a result of the solar event. Some machines also continued to work even after they were disconnected from electricity.
Chances Of A Carrington-Like Event Happening Within The Next Decade
A 2012 paper by space physicist Pete Riley, of Predictive Science in San Diego, California, revealed that the likelihood of another Carrington event happening within the next decade is about 12 percent.
Findings of a new study published in Space Weather revealed the economic impact of such a sufficiently powerful solar storm if it would affect Earth. The event could knock out the transformers needed to transmit electricity throughout the country's power grids which could lead to power blackouts.
Economic Implications Of A Powerful Solar Storm
Earlier studies only looked at the direct economic costs within the blackout zones and did not consider the extreme space weather's indirect impact on domestic and international supply chain.
Now, researchers of the new study said that the direct economic cost that could be incurred from disruption of electricity represents only 49 percent of the possible macroeconomic costs. In most extreme blackout scenario that could affect 66 percent of the population in the United States, domestic economic loss in a day could be $41.5 billion. Loss associated with the international supply chain would be at $7 billion.
"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," the researchers wrote in their study.
"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."
Experts have varied views on the potential severity of blackouts associated with CMEs. Some think that the outages would last only hours or up to a few days. Other think that blackouts would last weeks or even months because transmission networks could be knocked out and would require replacements.
Industries And Countries Most Affected By Solar-Induced Blackouts
In terms of economic losses, solar-induced blackouts would most severely impact manufacturing in the United States, followed by government, finance and insurance, and property. China is expected to be the most affected outside of the American soil followed by Canada and Mexico, which provide raw materials, goods and services that are used in production by U.S. companies.
"We felt it was important to look at how extreme space weather may affect domestic U.S. production in various economic sectors," said study author Edward Oughton, from Cambridge Judge Business School.
