Over the last six years, natural hazards have caused catastrophic consequences across the globe. Tsunamis, hurricanes, flooding, earthquakes, and volcanic eruptions have led to hundreds of thousands of fatalities and billions of dollars in economic costs. Geomagnetic storms—a type of space weather—are much less frequent, but have the potential to cause damage across the globe with a single event. In the past, geomagnetic storms have disrupted space-based assets as well as terrestrial assets such as electric power transmission networks. Extra-high-voltage (EHV) transformers and transmission lines—built to increase the reliability of electric power systems in cases of terrestrial hazards—are particularly vulnerable to geomagnetically induced currents (GICs) caused by the disturbance of Earth‘s geomagnetic field. The simultaneous loss of these assets could cause a voltage collapse and lead to cascading power outages. As a natural event whose effects are exacerbated by economic and technological developments, geomagnetic storms pose a systemic risk that requires both domestic and international policy-driven actions.
As part of the OECD Future Global Shocks project, this case study on geomagnetic storms was undertaken to identify the strengths, weaknesses, and gaps in current international risk management practices. The literature on geomagnetic storm risk assessments indicates that the state of the art for assessing the security risk from this type of event is still inchoate. There are examples of analyses that describe threat, vulnerability, and consequence, but they are not integrated, primarily because of the weakness in the threat analysis. The lack of valid risk assessments has limited risk mitigation efforts in many critical infrastructure sectors, as it is difficult to demonstrate the utility of investing in either hardening or operational mitigation efforts, especially if these investments reduce time and money spent in preparing for more common risks.
To explore the risk to the international community, this report presents a platform to discuss the risk of geomagnetic storms by describing a worst reasonable scenario and its risk factors. Our analysis identifies areas with EHV assets that are in vulnerable locations due to latitude and ground conductivity, and examines the first- and second-order consequences of an extreme storm, highlighting those consequences with an international impact such as scarcity of surplus EHV transformers and satellite communication signal degradation. In addition to exploring the expected economic consequences of a geomagnetic storm event, the report also assessed psychological consequence in the form of social unrest, behavioral changes and social vulnerability. The potential for international consequences if an extreme event occurs are high, although the severity of those consequences can be mitigated if the international community takes certain actions in advance, such as investing in additional geomagnetic storm warning systems.
Geomagnetic storms can be categorized as a global shock for several reasons: the effects of an extreme storm will be felt on multiple continents; the resulting damage to electric power transmission will require international cooperation to address; and the economic costs of a lengthy power outage will affect economies around the world. As a global shock event, a severe geomagnetic storm, although unlikely, could lead to major consequences for OECD governments.