The Cost of Red Dawn to the NSW Economy

Peter Tozer

No 124458, 2012 Conference (56th), February 7-10, 2012, Fremantle, Australia from Australian Agricultural and Resource Economics Society

Abstract: On September 23, 2009 much of New South Wales awoke to a strange phenomenon, a huge cloud of red dust, “Red Dawn” the name given by the media to the event. This dust was sourced from the far west and northwest of the state and the Lake Eyre basin, and was lifted by a concurrence of weather events including strong frontal winds, that brought the effects of the dry winter of 2009 in central Australia to the city of Sydney and north-eastern New South Wales. Dust density caused disruptions to transport networks, and to commercial and domestic activities. These activities and disruptions imposed costs to the economy of the state and, based on data from primary and secondary sources and information from previous research in Australia and overseas, an estimate was made as to the costs of the dust storm on the economy. This estimate is $425 million with the major component imposed on households due to cleaning premises and cars, and other associated costs. The impacts on commercial activity varied across sectors, with construction and retail/services sectors incurring costs due to loss of production and productivity, and cleaning, totalling approximately $44 million. The transport sector suffered losses in the region of $10 million. Further losses in productivity and production across all other sectors of the economy through absenteeism imposed a further cost of $7.5 million dollars. Contrary to previous research the impacts on health and emergency services were negligible. Some benefits were also generated by the dust storm. One of which was the deposition of soil and soil nutrients on land used for production, this led to an estimated benefit to the economy of approximately $1.1 million. A benefit that was not measured was that of nutrient deposition on the ocean and the subsequent increase in algal blooms and increases in fish stocks.

Keywords: Resource/Energy; Economics; and; Policy (search for similar items in EconPapers)
Pages: 27
Date: 2012-02
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aare12:124458

DOI: 10.22004/ag.econ.124458

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