The ripple effect can spread the impacts of regional natural disasters around the world

Published: Tuesday, 05 May 2020 07:47

When natural disasters strike a city or town, the local impacts can be devastating, but these events also have ripple effects that can be felt in distant cities and regions - even globally - due to the interconnectedness of the world's urban trade networks.

A new study by researchers at the Yale School of Forestry & Environmental Studies finds that local economic impacts - such as damage to factories and production facilities - can trigger secondary impacts across the city's production and trade network. For the largest disasters, they report, these impacts can account for as much as three-fourths of the total damage.

According to their findings, published in the journal Nature Sustainability, the extent of these secondary costs depends more on the structure of the production and supply networks for a particular city than on its geographic location. Regional cities that are dependent on their urban network for industrial supplies - and that have access to relatively few suppliers- are most vulnerable to these secondary impacts. Larger, global cities such as New York and Beijing, meanwhile, are more insulated from risks.

Using a simulation coupled with a global urban trade network model - which maps the interdependencies of cities worldwide - the researchers show how simulated disasters in one location can trigger a catastrophic domino effect.

The global spread of damage was particularly acute when natural disasters occurred in cities of North America and East Asia, largely because of their outsize role in global trade networks - as purchasers and suppliers, respectively - and because these regions are particularly susceptible to hurricane / cyclone events.

Often, adverse impacts are primarily caused by a spike in material prices, followed by production losses to purchasers. These production losses eventually can cause industrial shortages, which can then induce additional cycles of price spikes and shortages throughout the production chain.

Similar outcomes have been borne out following real world disasters. For instance, when catastrophic flooding occurred in Queensland, Australia, the impact on coking coal production prompted a 25-percent spike in the global costs. And the economic impacts of Hurricane Katrina extended far beyond New Orleans for several years after the historic storm.

While the example of cyclones can act as a proxy for other isolated disasters - such as the 2011 tsunami in Japan which caused global economic disruptions, particularly in the auto sector - the researchers say the findings are particularly relevant in terms of climate-related natural events.

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