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.

Long-term strategy depends on reweighting the balance of cost and value

October 20th, 2010

“We have all but lost the capacity to think strategically . . . we have simply fallen out of the habit, and have lost the culture of strategy making.”

So says, according to Philip Johnston of the Daily Telegraph,  a report of our Parliament’s Public Administration Select Committee –  not yet up on their website, please let me know when it is – and it’s hard to disagree.

For me the answer is quite stark – government has placed far too much emphasis on cost rather than value. Only if this is rebalanced with long-term incentives, will we ever develop large, long lifespan strategic assets. And as Johnston rightly points out, nowhere is this more true than post the Comprehensive Spending Review,  in energy or defence.

What is the value of aircraft carriers’ conventional deterrence, low and high intensity warfare air support and disaster relief capabilities over 40 years that these mobile airbases can bring to anywhere in the world?

Equally, what is the value of a Severn Tidal Barrage’s 100% predictable power output with zero fuel costs throughout its 120 year lifetime?

In both cases, their long-term value relative to their initial cost, is inordinately high. Would that we as a nation could recognise that and countless other examples too.

On the UK’s Defence Budget – it’s not the kit, it’s the other budgets

September 11th, 2010

I’ve had an enormous amount of feedback from my piece in the Yorkshire Post arguing for maintaining Trident and building the Aircraft Carriers.  Not all of it positive of course, but it was very nice to receive a few very appreciative notes from very senior military types. So as an area I like to pay close attention to, I savoured this piece in this week’s Economist.

I think this chart of theirs sums up the problem very clearly.

The Defence budget is not really constrained because of Eurofighter, Trident, Aircraft Carriers or even Iraq or Afghanistan. It has been held back to pay for Health, Education and Welfare (the last not shown) all spending on which have all increased massively since the late 80s and particularly since 2000.