Critical Infrastructure failure escalates the macroeconomic impacts of disasters
Critical infrastructures such as power systems are vulnerable to disaster-induced disruptions, forcing industrial shutdowns and production losses. Because businesses are linked to each other through supply chains, these losses do not stay local: disruption in one sector and region cascades onward to other sectors and other regions, amplifying the overall economic consequences. Conventional disaster impact assessments tend to overlook these production downtimes and the spatial interdependencies between infrastructure and economic sectors.
This study develops a spatially explicit framework to quantify the macroeconomic impacts of critical infrastructure failure, integrating localised failure and business disruption into the Multi-Regional Impact Assessment (MRIA) model. Using the province of Zuid-Holland as a case study, we simulate how flood-induced power outages reduce manufacturing output, with the shocks propagating through the wider economy.
Accounting for infrastructure failure raises the estimated economic impacts by roughly 50%, and sensitivity analyses show this amplification grows where interregional substitution is limited and infrastructure is less robust. Prioritising the protection of substations that serve sectors with little substitution capacity yields the largest reductions in impact. The findings underline the value of incorporating the systemic economic consequences of infrastructure failure, alongside physical damage, into climate adaptation planning.
Authors
Specifications
- Publication title
- Critical Infrastructure failure escalates the macroeconomic impacts of disasters
- Publication date
- 1 July 2026
- Publication type
- Article
- Page count
- 25
- Publication language
- English
- Magazine
- Civil Engineering and Environmental Systems
- Product number
- 6222
