ESRI Discussion Paper Series No.250 October 2010 Economic and Social Research Institute Cabinet Office Tokyo, Japan
The views expressed in ESRI Discussion Papers are those of the authors and not those of the Economic and Social Research Institute, the Cabinet Office, or the Government of Japan.
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Economic recovery scenario planning for the Tokyo inland earthquake Shingo Nagamatsu Associate Professor, Faculty of Safety Science, Kansai University Haruo Hayashi Professor, Disaster Prevention Research Institute, Kyoto University Abstract The economic damage caused by the Tokyo Inland Earthquake disaster is estimated at 112 trillion yen by the Central Disaster Management Council of Japan. The estimated figure however is surrounded by so much uncertainty that there surely exists a risk of the actual damage caused by an earthquake disaster exceeding the estimated damage. Moreover, the figure does not present a concrete image of disasters and the recovery process and has little impact on the development of concrete countermeasures against the economic problems caused by the disaster. In order to cope with such a problem, we employ scenario planning as a decision-making method under uncertainty. In this paper, we developed four scenarios of economic damage and recovery processes after the disaster. These scenarios are generated by the following two major uncertainties. The first uncertainty is the default risk of Japanese government. In the event that Japan s financial status deteriorates or the damage caused by the earthquake far exceeds the estimate, the Japanese government might face difficulties in financing the recovery. The second uncertainty is a gap between demand and supply in a recovery-related market, especially in the construction sector. If the gap is sufficiently larger, damaged houses, infrastructure, and firms assets can be quickly restored without price increase. Otherwise, restoration will take a long time and bring with it the risk of price increase. The anticipated Tokyo inland earthquake will not be so catastrophic as to compel the Japanese government to default. However, it will be large enough to delay the recovery process and cause a price increase, since the construction market has shrunken to almost half since the 1995 Hanshin Awaji Great Earthquake. To avoid such a risk, assistance from the international community in debris removal, waste disposal, and reconstruction should be seriously considered. 2
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15 7169 2008 162 9.6% 109 3485 67.5% 41.6 1981, 2009 552,000 30,686 2007 288,426 2008 5.5% 52 1995 790,169 2010 416,000 1995 12 551 2008 427 77% 5.3 1980 1983 1.220 1999 2003 0.544 OECD 1970 1974 0.736 1990 1994 0.346, 2006; p.40 21
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