The Economic Impacts of Terrorist Attacks

The Economic Impacts of Terrorist Attacks

Edited by Harry W. Richardson, Peter Gordon and James E. Moore II

Focussing on the economics of terrorism in the post 9/11 world, this book brings together original research based on the collaborative efforts of leading economists and planners. The authoritative and expert contributors use a variety of methodological approaches and apply them to different types of terrorist attacks (on airports, highways, seaports, electric power infrastructure, for example).

Chapter 4: Increasing the Security and Reliability of the US Electricity System

Lester B. Lave, Jay Apt, Alex Farrell and M. Granger Morgan

Subjects: economics and finance, public sector economics, transport, environment, disasters, transport, politics and public policy, terrorism and security, urban and regional studies, transport


Lester B. Lave, Jay Apt, Alex Farrell and M. Granger Morgan INTRODUCTION The 2001 terrorist attacks showed that our airliners, tall buildings, water and even our mail are potential targets. What will actually be attacked depends on the terrorists’ goals, the damage that could be done, and our ability to protect each one. Terrorists attack highly visible, symbolic targets in order to make each of us fear that ‘this could happen to me’. However although it is impossible to prevent terrorists from causing disruptions in a free society, much can be done to limit their ability to spread panic. Energy, transportation, telecommunication and water infrastructures are potentially attractive targets, because some elements of these complex systems are nearly impossible to protect and disruptions could impose large costs, threaten our well-being, and possibly cause thousands of deaths. The electric power system is an especially attractive target since virtually every aspect of our economy and personal lives requires electricity to function. Without electricity, we cannot heat or cool our buildings, get drinking water or dispose of sewage, have television or radio, run our computers and financial systems, or produce the goods and services that make up almost all of GDP. If a terrorist attack blacked out any of our large cities, the traffic signals would cease to function, resulting almost immediately in gridlock that prevented police, fire or paramedic vehicles from moving. In the wake of 11 September 2001, the electric power system in particular faces a number of important challenges...

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