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  • Tsunamic economics – what did Japan spend on seawalls compared to cost of tsunami?

    March 26th, 2011

    In some circles, there is a kind of lurid obsession with Japan’s nuclear woes that came from the tsunami. Obviously, it’s a PR and Financial disaster for the nuclear industry but in the grand scheme of things, not an environmental catastrophe – to date just one person has died, falling off a crane and a handful of workers have overexposed themselves to radiation. Terrible for them and their families I’m sure but how does that stack up against the estimated 15,000 non-nuclear dead?

    I’m really surprised there hasn’t been much more discussion of the seeming failure of Japan’s massive investment in seawalls. Back in the 90s, when Japan started it’s long decade of Keynesian public spending, brand new sea defences received mountains of cash.

    How much higher would this seawall have to have been to prevent this tsunami I wonder?

    It was not high enough seawalls that failed to prevent the tsunami coming over them into Japan’s nuclear plants at Fukushima, Daichi and Dana and the location of their backup diesel generators at a low spot, as reported here;

    The tsunami that followed the quake washed over walls that were supposed to protect the plants, disabling the diesel generators crucial to maintaining power for the reactors’ cooling systems during shutdown.

    Peter Yanev, one of the world’s best-known consultants on designing nuclear plants to withstand earthquakes, said the seawalls at the Japanese plants probably could not handle tsunami waves of the height that struck them. And the diesel generators were situated in a low spot on the assumption that the walls were high enough.

    That turned out to be a fatal miscalculation. The tsunami walls either should have been built higher, or the generators should have been placed on higher ground to withstand potential flooding, he said. Increasing the height of tsunami walls, he said, is the obvious answer in the immediate term.

    You can’t seawall the whole coast but then you don’t have to – just focus on the really high impact areas. Spending on some extra concrete for a few more feet of walls for the nuclear plants by the sea surely would have been worth it.

    2 Reasons for medium term optimism on oil prices

    March 9th, 2011

    Leaving aside environmental concerns around oil, I managed belatedly to find some grounds for optimism to balance my previous post. Ok, it’s only two reasons and they’re about the world in 2015-2025 or so, but that’s the best I could do !

    1. Iraq – really surprised almost no one has picked up on this. Iraqi production is currently around 2.7m bpd but could well reach 9m bpd by the middle of the next decade. This will massively alter the balance of power in OPEC – the Saudis won’t be too thrilled – as Iraq is not part of OPEC’s allocation system. I picked this up in yesterday’s Wall Street Journal Europe in a section by IHS Cambridge Energy Research Associates – of Daniel Yergin fame.

    2. Shale oil – the technology that revolutionised the US natural gas industry – hydraulic fracturing – is now coming to oil. Optimists are saying that shale oil production could cut US oil import needs by 20% within 5-6 years.