Japan's 2011 Earthquake, Tsunami and Nuclear Disaster
Economic Impact on Japan and the Rest of the World
On March 11, 2011, a 9.1 magnitude earthquake occurred 231 miles northeast of Tokyo. It was the fifth most powerful earthquake ever recorded, and within 30 minutes, a 133-foot high tsunami pummeled Japan's northeastern shoreline. At least 15,899 people died, and another 2,500 went missing. Rescue efforts were difficult due to cold weather and disrupted transportation routes, and over 470,000 people were displaced. The disaster also fully destroyed 121,991 buildings, cost an estimate $210 billion in economic damage, and swept 5 million tons of debris out into the ocean—where about 70% sunk, leaving 1.5 million tons floating.
Fukushima Nuclear Plant Disaster
To make matters worse, the tsunami damaged the Fukushima Daiichi nuclear power plant, creating radioactive leaks. The tsunami disabled cooling at three Fukushima reactors, and the cores melted within 72 hours. At first, engineers couldn't stop the leakage, and even after they did, it took months to halt emissions completely.
Radiation showed up in local milk, vegetables, and briefly appeared in Tokyo's drinking water. Radioactive materials continued to leak into the Pacific Ocean, raising levels to 4,000 times the legal limit.
Japan classified the Fukushima breach a level 7 on the International Nuclear Event Scale, meaning it was "a major release of radiation, with widespread health and environmental effects," according to the International Atomic Energy Agency. That put it at the same level as the Chernobyl nuclear disaster. Fortunately, the Fukushima nuclear fallout was only one-tenth as bad as in Russia. There, a raging fire spewed radioactive particles into the jet stream for days, contaminated the surrounding countryside, and even made its way to Europe.
Initial Impact on Japan's Economy
The "Triple Disaster" devastated Japan's economy in four ways. First, the destruction cost more than the $161 billion cost estimate for Hurricane Katrina. The earthquake hit regions that were responsible for 6%–7% of the country's total production. That made it worse than the 1995 Great Hanshin earthquake near Kobe, which cost about $100 billion and resulted in over 6,000 lives lost.
Second, it crippled Japan's nuclear industry. 11 of Japan's 50 nuclear reactors were immediately closed after the disaster, reducing the country's electricity generation by 40%. Intense public outcry over nuclear generation caused 22 more to shut down by May 2011. Plants continued to be closed for testing and review, and by May 2011, the government had closed all of them. As a result, Japan had to import oil to replace generation capacity, causing record trade deficits. Two plants were restarted in April 2013 and ran until September 2013, when they were closed for maintenance. Reactors began reopening in 2015.
Third, the Bank of Japan provided market liquidity to ensure the stability of financial markets, but the long-term impact was harmful to the country's struggling economy. Rebuilding lifted the economy a bit, but the increase in the national debt outweighed it. Even before the disaster, it was already double Japan's annual economic output.
Lastly, Japan's economy had just started to recover from 20 years of deflation and recession. The earthquake only added to the country's economic challenges. In addition to massive government debt, Japan faced rising commodity prices and an aging labor pool.
Many wondered if Japan would sell U.S. Treasuries to pay for rebuilding, but this would have lowered the value of the dollar and increased the cost of imports to the United States. Japan didn't need to sell Treasuries, as it was able to finance the rebuilding program primarily from taxation.
How the Disaster Slowed Global Growth
The quake and tsunami damaged and closed down key ports, and some airports shut briefly, disrupting the global supply chain of semiconductor equipment and materials. Japan manufactures 20% of the world's semiconductor products—including the NAND flash, an indispensable electronic part of Apple's iPad. Japan also supplies the wings, landing gears, and other major parts of Boeing's 787 Dreamliner. Automakers Toyota, Nissan, Honda, Mitsubishi, and Suzuki were also forced to temporarily suspend production. Many other manufacturing operations, including that of Sony, were suspended.
Effect on the Environment
The U.S. Geologic Survey reported that the earthquake was powerful enough to shift the earth on its axis. That caused the earth to rotate a bit faster and shortened the day by 1.8 microseconds. Japan's coastline moved around eight feet to the east and sank around three feet. By 2015, over 200 tons of debris had washed up on Canada's western shoreline, most of which was plastic. Scientists estimate it may have added over a million tons of pollution to the Great Pacific Garbage Patch. The quake set off aftershocks and quakes around the world, and tremors were felt as far away as Beijing, the United States, and Cuba. It sped up the pace of glaciers in Antarctica and caused huge icebergs to break off.
As of 2019, there were 52,000 evacuees still living in temporary housing, and between 2016 and 2018, 100,000 had been moved to permanent housing. More than 90% of public housing had been completed. The Fukushima nuclear plants will take 30–40 years to fully decommission as high levels of radiation complicate recovery efforts. TEPCO must remove fuel from spent fuel pools, remove rubble, and install a domed containment roof.