Evaluating the Economic Response to Japan Earthquake of 2011

Nuclear Power Industry

Schnell and Weinstein reported in 2012 that on March 11, 2011 at 14:46 Tokyo time, an earthquake of magnitude 9.0 occurred off the coast of Japan in the western Pacific. The quake triggered a massive tsunami that reached the eastern coast of Japan within minutes. The effects of the dual tragedy were immediate: 19,996 people lost their lives, 275,258 homes were destroyed, and another 580,559 houses were damaged. Nearly a year after the tragedy, Japan is still working to reorganize, rebuild, and reassert itself as an international economy

This paper outlines the economic effects of the Tohoku earthquake and tsunami and presents steps that Japan must take to move forward. A comparison with the 1995 Kobe earthquake suggests that policy decisions to reduce reliance on nuclear energy in the short run are hampering Japan’s recovery. The reopening of reactors at the Takahama, Kashiwazaki Kariwa, and Tomari plants is promising both in terms of economic recovery and long-term health outcomes. A move from nuclear power to fossil fuels would likely result in far more fatalities than those arising from radiation.

Japan has the unfortunate distinction of being a country that has suffered a disproportionate number of catastrophic events. Not only is Japan prone to earthquakes
and other natural disasters, but many Japanese cities were devasted by bombings during World War II in response to Japanese imperialism. Davis and Weinstein (2002) analyze the impacts of these events and provide some relatively optimistic news for the affected regions: populations and industries tend to recover in the wake of these catastrophic events. While the authors hope that the impact of the current earthquake is comparable, in this paper they examined the extent to which policy decisions have affected the trajectory of recovery from the recent disaster.

Over the last 100 years, there have been nine earthquakes in Japan that have killed over 1,000 people (USG, 2011). Of these, the 1995 Kobe earthquake and the recent Tohoku disaster were two of the worst three events in terms of casualties. To examine the success, speed, and lasting implications of the recovery, the authors compared the 1995 and 2011 disasters from a policy standpoint.