A recent report by the UK-based think tank, Chatham House, “Preparing for High-impact, Low-probability Events: Lessons from Eyjafjallajokull,” describes the challenges associated with preparing for these events as well as potential global impacts. On the latter point, the report highlights how impacts will be felt well beyond an immediate disaster area, with the effects reverberating around the world because of our interconnected, global economy.
I commented on the report for the NPR story “The economic impact of catastrophe.” The challenge of preparing for the high-impact, low-probability events is that they are by definition rare, and thus not at the top of the policy agenda or a salient issue for citizens. Events also may not be anticipated at all, as is the case with so-called “Black Swan” events. The conundrum is, then, how to best allocate limited resources in the face of uncertainty. The best option is to take a risk management approach that is informed by risk assessments specific to the hazards that communities, regions, and the nation as a whole face. Policymakers should engage and empower citizens through dialogue about risks we face. Doing so both educates the public as well as informs policymakers—knowing which risks citizens view as most distressing helps officials better communicate with them and more effectively calibrate citizens’ expectations. This is something we described in HSPI’s Preparedness, Response, and Resilience Task Force report “Operationalizing Resilience: A Systems-based Approach Emphasizing Risk Management is Required.” In short, the best we can do is to allocate resources based on risk assessments, and have a robust all-hazards plan to address the Black Swans that we could not have anticipated.
The recent National Level Exercise that tested the response to a New Madrid earthquake scenario is a prime example of preparing for a high-impact, low-probability event. The effects of such an incident would be devastating, and the likelihood, while low (compared to ubiquitous house fires, traffic accidents, and medical emergencies that occur in communities every day), is not zero. Following the devastating Haitian earthquake in 2010, attention was drawn to the risk we face of a catastrophic earthquake in the US. As described in this ABC News story, fault lines in the United States, including New Madrid, are significant risks to those residing in the potential impact zones. And as the Chatham House report highlights, the initially local effects of such a disaster would spread far and wide because of the interconnected nature of the global economy. Indeed, the 2011 Japanese earthquake interrupted portions of the world’s supply chain and rattled stock markets.
The recent overseas disasters remind us of the risks we face domestically, as well as demonstrate the potential repercussions that faraway disasters can have here at home. Our governmental and private sector leaders would be well advised to adopt the recommendations of the UK report to better prepare our nation for the inevitable next disaster, irrespective of where it may happen to occur.