Work

Assessing the Economic Benefits of Space Weather Mitigation Investment Decisions: Evidence From Aotearoa New Zealand

Year: 2026

Type: article

Abstract: Space weather events pose a growing threat to modern economies, yet their macroeconomic consequences remain underexplored. This study presents the first dedicated economic assessment of geomagnetic storm impacts on Aotearoa New Zealand, quantifying potential gross domestic product (GDP) losses across seven conservative disruption and mitigation scenarios due to an extreme coronal mass ejection (CME). The primary focus is on the damaging impacts of geomagnetically induced currents (GICs) on the electrical power transmission network. We support space weather mitigation investment decisions by providing a first‐order approximation of their potential economic benefits, using best‐in‐class scientific models, via a coupled physics‐engineering‐economic spatial modeling framework. Recognizing uncertainty in the economic interpretation of power outage impacts, we compare four different estimation methods. In the most severe unmitigated scenario, estimated GDP losses reach NZ$3.58 billion (0.98% of annual GDP). Targeted GIC‐informed scenarios still produce material losses, with no mitigation reaching up to NZ$1.48 billion (0.41% of annual GDP). Mitigation substantially reduces these impacts. Operational strategies, including optimized switching and islanding, achieve benefit‐cost ratios as high as 330 to 1, while physical protections such as GIC blocking devices produce returns up to 34.4 to 1. When also acknowledging additional unmodeled impacts, including multi‐billion losses in capital equipment and long‐term revenue, the economic rationale for pre‐emptive mitigation becomes even more pertinent.

Source: Space Weather

DOI: 10.1029/2025sw004919

Authors: Edward J. Oughton, Andrew Renton, Daniel H. Mac Manus, Dennies Bor, Craig J. Rodger

Institutions: George Mason University, Transpower (New Zealand), University of Otago

Language: English

Topic: Ionosphere and magnetosphere dynamics

Subfield: Space and Planetary Science

Field: Earth and Planetary Sciences

Domain: Physical Sciences

SDGs: Climate action, Industry, innovation and infrastructure

Open Access status: gold

Estimated APC paid: $3,000