This article is about the rising costs that are associated with natural disasters. The article states that there is little evidence that more hurricanes come ashore than a century (so we cannot blame these disasters entirely on global warming). However, these natural disasters like "earthquakes in Japan and New Zealand, floods in Thailand and Australia and tornadoes in America" last year are making real economic problems for companies and citizens. The reason for this is that people and companies are inhabiting areas that are of high risk for natural disasters, therefore if disaster is to strike the "clean up" will be much more costly than if it was just farm land for example. This article also aims to help prevent some of these costs. Because, as we've discussed in class even planned economic systems cannot account for things such as natural distasters. Firstly the article suggests that buildings are built soundly and maintained, also suggesting that building (like schools) should be designed for dual purpose. Secondly, the article suggests that the government regulates companies and individuals so that they will not only develop for their own interest and build without the proper planning and rationale. Thirdly, governments should encourage people not to live in places that are prone to natural disasters. As the article states, disasters are inevitable and cannot be planned for, but it is possible to plan for the probable.
http://www.economist.com/node/21542771
2 comments:
This article suggests that there is a clear need for government intervention, but the question is how large of a role they should play-- granted, as you stated, they cannot plan for disasters, but they can have a plan B in place should one occur. It's purely speculative, but It would be interesting to see if people begin to move out of high-risk disaster cities due to these recent catastrophes, and begin to overpopulate the low-risk areas of the world; thereby potentially causing poorer living conditions in those areas-- although we know the market will 'correct' itself through higher prices to live in low-risk cities, driving people back into the cheaper high-risk areas.
This article suggests that there is a clear need for government intervention, but the question is how large of a role they should play-- granted, as you stated, they cannot plan for disasters, but they can have a plan B in place should one occur. It's purely speculative, but It would be interesting to see if people begin to move out of high-risk disaster cities due to these recent catastrophes, and begin to overpopulate the low-risk areas of the world; thereby potentially causing poorer living conditions in those areas-- although we know the market will 'correct' itself through higher prices to live in low-risk cities, driving people back into the cheaper high-risk areas.
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