Direct Earthquake Under Tokyo Would Cause ¥1 Quadrillion in Economic Losses

On March 14, 2024, the Japan Society of Civil Engineers announced that if there was a major earthquake directly under Tokyo, the estimated economic losses would total ¥1 quadrillion over the 20 years it would take to recover. The estimate as of 2018 had been ¥778 trillion, but the total was recalculated using research data related to the 2011 Great East Japan Earthquake.

The government’s Earthquake Research Committee gives the probability of an earthquake occurring directly under Tokyo at 70% in the next thirty years. According to the Cabinet Office, there would be up to 23,000 fatalities and the economic consequences, including direct damage to buildings and losses through reduced production and services would total an estimated ¥95 trillion.

In a breakdown of the predicted ¥1 quadrillion costs, the long-term economic impact caused by damage to roads, ports, and production facilities would be ¥954 trillion and damage to buildings and other property would be ¥47 trillion. There would also be additional impact on national finances with reconstruction costs of ¥353 trillion and tax revenue losses of ¥36 trillion, which together would expand the budget deficit by ¥389 trillion.

Estimates were also calculated for the economic damage that would be caused by storm surges and floods. Should a huge storm surge occur in Tokyo Bay, the cost would be ¥115 trillion, rising to ¥126 trillion if it were Ise Bay, and ¥191 trillion for Osaka Bay. And if climate change causes global temperatures to rise 2 degrees above pre-industrial levels, flooding of 109 rivers nationwide would lead to a total of ¥537 trillion in damages.

Regarding the long-term economic impact of such disasters, the JSCE estimated that undertaking measures such as earthquake-proofing of roads and ports as well as construction of embankments would reduce the impact of an earthquake directly under Tokyo by 40%, damage by storm surges by 20% to 70% and the effects of flooding by 100%.

(Banner photo: Disaster preparedness drills take place in Sagamihara, Kanagawa Prefecture, on September 1, 2023. © Jiji.)