Quantifying the daily economic impact of extreme space weather due to failure in electricity transmission infrastructure

Extreme space weather due to coronal mass ejections has the potential to cause considerable disruption to the global economy by damaging the transformers required to operate electricity transmission infrastructure. However, expert opinion is split between the potential outcome being one of a temporary regional blackout and of a more prolonged event. The temporary blackout scenario proposed by some is expected to last the length of the disturbance, with normal operations resuming after a couple of days. On the other hand, others have predicted widespread equipment damage with blackout scenarios lasting months. In this paper we explore the potential costs associated with failure in the electricity transmission infrastructure in the U.S. due to extreme space weather, focusing on daily economic loss. This provides insight into the direct and indirect economic consequences of how an extreme space weather event may affect domestic production, as well as other nations, via supply chain linkages. By exploring the sensitivity of the blackout zone, we show that on average the direct economic cost incurred from disruption to electricity represents only 49% of the total potential macroeconomic cost. Therefore, if indirect supply chain costs are not considered when undertaking cost-benefit analysis of space weather forecasting and mitigation investment, the total potential macroeconomic cost is not correctly represented. The paper contributes to our understanding of the economic impact of space weather, as well as making a number of key methodological contributions relevant for future work. Further economic impact assessment of this threat must consider multiday, multiregional event

Marking their own homework: The pragmatic and moral legitimacy of industry self-regulation

When is industry self-regulation (ISR) a legitimate form of governance? In principle, ISR can serve the interests of participating companies, regulators and other stakeholders. However, in practice, empirical evidence shows that ISR schemes often under-perform, leading to criticism that such schemes are tantamount to firms marking their own homework. In response, this paper explains how current management theory on ISR has failed to separate the pragmatic legitimacy of ISR based on self-interested calculations, from moral legitimacy based on normative approval. The paper traces three families of management theory on ISR and uses these to map the pragmatic and moral legitimacy of ISR schemes. It identifies tensions between the pragmatic and moral legitimacy of ISR schemes, which the current ISR literature does not address, and draws implications for the future theory and practice of ISR