10 seconds before the Napa quake last Sunday, a UC Berkeley lab saw an increase in P-wave activity. The non-destructive waves that are the beginning of a quake, P-waves are the warning that mean it is time to activate the ShakeAlert system. Still in its testing phase, the ShakeAlert went to BART (Bay Area Rapid Transit), Disneyland, the LA County Fire Department and other program participants.
A sample ShakeAlert:
In 10 seconds, trains going 30 MPH have enough time to stop while those at 70 MPH can slow to 40. In the operating room, surgeons can remove their scalpels and utilities have the time to turn off gas lines. (In an elevator, I would get off at the next floor.)
Our basic issue, though, is how much to invest in natural disaster preparation, especially when it might never happen.
How much should we prepare for a natural disaster?
We do know that spending on a ShakeAlert decreases destruction. For a Japanese computer chip manufacturer, getting a pre-quake alert reduced disaster damage from $15 million in 2003 to $200,000 more recently because they could shut down robots and manage dangerous chemicals. However, does that mean California should use $80 million to create the ShakeAlert system? Only $10 million has been raised so far.
In Italy, the preparation dilemma took a surprising turn when seven earthquake experts were convicted of manslaughter for inadequately conveying the likelihood of an earthquake in L’Aquila. It happened in 2009 when 297 people died and thousands were injured. Italian scientists knew that L’Aquila had a history of earthquakes and was experiencing tremors. Deciding to calm local uneasiness rather than encourage preparation, they were the target of local fury after the quake. Convicted, they now await a decision from an appellate court.
Moving further on the natural disaster probability scale takes us to New Orleans and Hurricane Katrina. Yes, they had storms before but the likelihood of a Category 5 was small. Diverting land, labor and capital to fortify levees had too high a cost for a storm that would not happen. But it did.
Our Bottom Line and Opportunity Cost
How then to decide? Below, you can see, in dollars, the most costly natural disasters from 1990-2011.
Our bottom line: As economists, whether looking at $80 million for a 60 second ShakeAlert or preparation for a natural disaster that can come in a day or a decade, the issue is opportunity cost. Because diverting land, labor and capital to natural disaster mitigation means not using it now, when is the tradeoff worth it?