This book provides a thorough explanation of the theories, philosophies, and economics of catastrophes with a view to how humanity should be prepared for events with catastrophic consequences. The author begins the book with the introduction to numerous natural and manmade catastrophes and how catastrophe theories have played a pivotal role in designing policies and responses to them. Discussed in Chapter 1 are hurricanes, earthquakes, nuclear disaster, asteroid collision, large hadron col lider, uncontrollable robots, global warming, infectious diseases without antibodies, and bioterrorism. In Chapter 2, variou s scientific theories on catastrophe are explained including a catastrophe theory, a threshold theory, a tipping point theory, a chaos the ory, butterfly effect, and an unbounded variance theory. In Chapter 3, the author unravels philosophical traditions th at have played critical roles in understanding catastrophic outcomes. Discussed in the chapter are Rachel Carson, Aldo Leopold, an Indian cl assical philosophy, value of life, Pascal’s wager, and a black swan theory. In Chapter 4, the author develops the economics of catastrophic events by consolidating the catastrophe literature in natural sciences, scientific theories, and philosophy. The author synth esizes the economics literature on a benefit-cost analysis, Pareto distribution, value of statistical life, prospect theory, dismal theorem, economics of adaptation, and financial engineering such as catastrophe bonds.
Chapters 5, 6, and 7 are devoted to empirical data and analyses using historical data on hurricanes generated in the North Indian Ocean and elsewhere. In Chapter 5, the present author provides an empirical analysis of quantification of the damage functions from a natural catastrophe with an example from hurricane losses and fatalities data in South Asia. The chapter contrasts phy sical distributions with economic distributions. Chapter 6 is followed by empirical examinations of anthropogenic responses to catastrophic events. The present author shows how a variety of adaptation measures have played a crucial role in reducing the number of fatalities significantly over time. Chapter 7 provides a broad review of past policy responses to natural catastrophes, which includes US Clean Air Act, Montreal Protocol, nuclear Non-Proliferation Treaty, Japanese Earthquake responses, Bangladesh cyclone programs, US asteroid programs, and Kyoto Protocol. Chapter 8 provides a wide-ranging commentary on crucial implications of the studies of catastrophes and establishing the economics of catastrophic consequences for policy decisions.