Natural and Man-Made Catastrophes Theories, Economics, and Policy Designs

A thorough explanation of the mathematical theories, philosophies, and economics of catastrophes with a view to how humanity should be prepared for events with catastrophic consequences

This book presents a holistic view of natural and man-made catastrophes, from mathematical theories and philosophy through to economics and policy. It is both academic and applied in its approach, offering both empirical evidence and academic reflections to give a new perspective on an ever-developing topic, and providing many examples of public policy and catastrophe responses from around the world.

Natural and Man-made Catastrophes: Theories, Economics, and Policy Designs begins by introducing readers to numerous natural and man-made catastrophes and how catastrophe theories have played a pivotal role in designing policies and responses to them. It discusses hurricanes, earthquakes, nuclear disaster, asteroid collision, Large Hadron Collider, artificial intelligence, uncontrollable robots, global warming, infectious diseases without antibodies, and bioterrorism. It clarifies key mathematical and scientific theories—such as catastrophe theory, chaos, singularity, fractal, tipping point, unbounded variance, fat-tail, and Feigenbaum constant—on catastrophes. The book goes on to examine ancient and contemporary philosophies that have played critical roles in humanity’s understanding of catastrophic outcomes. The book critically builds the economics of catastrophic events 1) by consolidating the catastrophe literature in natural sciences, scientific theories, and philosophy; 2) by constructing global empirical catastrophe data and analytical models using historical data on hurricanes and earthquakes; 3) and by critically reviewing policy experiences on the aforementioned catastrophic events. 

• Lays the foundation for the economic analyses and policy-making on potential humanity/universe threatening catastrophes
• Includes many examples of public policy and behavioral responses to catastrophes from around the world
• Provides a wide-ranging commentary on crucial implications of the studies, models, and concepts of catastrophes
• Synthesizes the catastrophe literature in mathematical theories, philosophical traditions, economic analyses, policy studies, and contemporary concerns.

Natural and Man-made Catastrophes: Theories, Economics, and Policy Designs is an important book for students, teachers, professionals, and policy makers who are involved in environmental research and disaster response.

S. NIGGOL SEO, PHD, is a natural resource economist who specializes in the study of global warming and is a Professor of Environmental and Natural Resource Economics at the Muaebak Institute of Global Warming Studies in Seoul. He received a Ph.D. from Yale University in May 2006 with a dissertation on behavioral economics of global warming and has held professor positions in the UK, Spain, and Australia since then. He has been on the editorial boards of the three journals including Climatic Change (Stanford Univ), Food Policy (Univ Bologna). He received an Outstanding Applied Economic Perspectives and Policy Article award from the Agricultural and Applied Economics Association in June 2011.

List of Figures ix

List of Tables xi

About the Author xiii

Preface and Acknowledgments xv

1 The Economics of Humanity-Ending Catastrophes, Natural and Man-made: Introduction 1

1.1 Fables of Catastrophes in Three Worlds 1

1.2 Feared Catastrophic Events 3

1.3 Global or Universal Catastrophes 7

1.4 A Multidisciplinary Review of Catastrophe Studies 11

1.5 Economics of Catastrophic Events 16

1.6 Empirical Studies of Behaviors under Catastrophes 18

1.7 Designing Policies on Catastrophic Events 21

1.8 Economics of Catastrophes versus Economics of Sustainability 25

1.9 Road Ahead 26

References 26

2 Mathematical Foundations of Catastrophe and Chaos Theories and Their Applications 37

2.1 Introduction 37

2.2 Catastrophe Theory 39

2.2.1 Catastrophe Models and Tipping Points 40

2.2.2 Regulating Mechanisms 42

2.3 Chaos Theory 43

2.3.1 Butterfly Effect 44

2.3.2 The Lorenz Attractor 45

2.4 Fractal Theory 46

2.4.1 Fractals 46

2.4.2 The Mandelbrot Set 49

2.4.3 Fractals, Catastrophe, and Power Law 50

2.5 Finding Order in Chaos 55

2.6 Catastrophe Theory Applications 60

2.7 Conclusion 61

References 62

3 Philosophies, Ancient and Contemporary, of Catastrophes, Doomsdays, and Civilizational Collapses 67

3.1 Introduction 67

3.2 Environmental Catastrophes: Silent Spring 69

3.3 Ecological Catastrophes: The Ultimate Value Is Wilderness 73

3.4 Climate Doomsday Modelers 76

3.5 Collapsiology: The Archaeology of Civilizational Collapses 79

3.6 Pascal’s Wager: A Statistics of Infinity of Value 82

3.7 Randomness in the Indian School of Thoughts 85

3.8 The Road to the Economics of Catastrophes 88

References 89

4 Economics of Catastrophic Events: Theory 95

4.1 Introduction 95

4.2 Defining Catastrophic Events: Thresholds 98

4.3 Defining Catastrophic Events: Tail Distributions 100

4.4 Insurance and Catastrophic Coverage 104

4.5 Options for a Catastrophic Event 110

4.6 Catastrophe Bonds 114

4.7 Pareto Optimality in Policy Interventions 119

4.8 Events of Variance Infinity or Undefined Moments 125

4.9 Economics of Infinity: A Dismal Science 129

4.10 Alternative Formulations of a Fat-tail Catastrophe 132

4.11 Conclusion 135

References 137

5 Economics of Catastrophic Events: Empirical Data and Analyses of Behavioral Responses 145

5.1 Introduction 145

5.2 Modeling the Genesis of a Hurricane 147

5.3 Indices of the Destructive Potential of a Hurricane 149

5.4 Factors of Destruction: Wind Speeds, Central Pressure, and Storm Surge 151

5.5 Predicting Future Hurricanes 153

5.6 Measuring the Size and Destructiveness of an Earthquake 156

5.7 What Causes Human Fatalities? 159

5.8 Evidence of Adaptation to Tropical Cyclones 162

5.9 Modeling Behavioral Adaptation Strategies 166

5.10 Contributions of Empirical Studies to Catastrophe Literature 171

References 172

6 Catastrophe Policies: An Evaluation of Historical Developments and Outstanding Issues 177

6.1 Introduction 177

6.2 Protecting the Earth from Asteroids 178

6.3 Earthquake Policies and Programs 181

6.4 Hurricane, Cyclone, and Typhoon Policies and Programs 182

6.5 Nuclear, Biological, and Chemical Weapons 187

6.6 Criteria Pollutants: The Clean Air Act 191

6.7 Toxic Chemicals and Hazardous Substances: Toxic Substances Control Act 198

6.8 Ozone Depletion: The Montreal Protocol 201

6.9 GlobalWarming: The Kyoto Protocol and Paris Agreement 203

6.10 Strangelets: High-Risk Physics Experiments 207

6.11 Artificial Intelligence 209

6.12 Conclusion 210

References 210

7 Insights for Practitioners: Making Rational Decisions on a Global or Even Universal Catastrophe 219

7.1 Introduction 219

7.2 Lessons from the Multidisciplinary Literature of Catastrophes 221

7.3 Fears of Low-Minds and High-Minds: Opinion Surveys 228

7.4 Planet-wide Catastrophes or Universal Catastrophes 230

7.5 Making Rational Decisions on Planet-wide or Universal Catastrophes 234

7.6 Conclusion 241

References 241

Index 249

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