Tuesday, August 09, 2011

Information and Adaptation to Disasters

This article  tells a depressing tale.  After the nuclear power plant disaster in Japan in Spring 2011, people who lived close to the plant sought to migrate to a safer location.  "Given no guidance from Tokyo, town officials led the residents north, believing that winter winds would be blowing south and carrying away any radioactive emissions."  But, the Central Government knew

To quote the article;

"The winds, in fact, had been blowing directly toward Tsushima — and town officials would learn two months later that a government computer system designed to predict the spread of radioactive releases had been showing just that.

But the forecasts were left unpublicized by bureaucrats in Tokyo, operating in a culture that sought to avoid responsibility and, above all, criticism. Japan’s political leaders at first did not know about the system and later played down the data, apparently fearful of having to significantly enlarge the evacuation zone — and acknowledge the accident’s severity."

This ugly case study highlights a key part of my logic in Climatopolis.  Adaptation takes place along several dimensions.  First, where you live and how you live once you choose a location.   But, second, as new news arrives -- you will be better able to adapt to shocks if you have access to high frequency information (will tomorrow be a heat wave?).  Government should play the role of trusted information provider if it is up to the job.  In the case of U.S Smog Alerts, the answer appears to be yes.  But, NY Times article highlights how governments can sometimes have incentives to hide information from their own people and this precludes the possibility that self interested individuals can protect themselves. In this ugly case, the government's failure to supply  information increased the radiation exposure as well meaning individuals migrated closer to "ground zero".

How can competition mitigate this problem? If politicians anticipate that they will be held accountable for such Watergate like cover ups, then they will have stronger ex-ante incentives to tell their people what they know.