According to a recently published report collaboratively developed by the University of Cambridge Centre for Risk Studies and the Lloyd’s of London, a cyber attack on the United States power grid could cost the economy upwards of $1 trillion:
The report from the University of Cambridge Centre for Risk Studies and the Lloyd’s of London insurance market outlines a scenario of an electricity blackout that leaves 93 million people in New York City and Washington DC without power.
The scenario, developed by Cambridge, is technologically possible and is assessed to be within the once-in-200-year probability for which insurers should be prepared, the report said.
The hypothetical attack causes a rise in mortality rates as health and safety systems fail, a drop in trade as ports shut down and disruption to transport and infrastructure.
“The total impact to the U.S. economy is estimated at $243 billion, rising to more than $1 trillion in the most extreme version of the scenario,” the report said. The losses come from damage to infrastructure and business supply chains, and are estimated over a five-year time period.
The extreme scenario is built on the greatest loss of power, with 100 generators taken offline, and would lead to insurance industry losses of more than $70 billion, the report added.
This scenario would likely never play out but it is still something the country needs to prepare for, and learn how to overcome in the event it is ever realized.