Abstract
Space weather events pose a growing threat to modern economies, yet their macroeconomic consequences still remain underexplored. This study presents the first dedicated economic assessment of geomagnetic storm impacts on Aotearoa New Zealand, quantifying potential GDP losses across seven disruption and mitigation scenarios due to an extreme coronal mass ejection (CME). The primary focus is upon the damaging impacts of geomagnetically induced currents (GICs) on the electrical power transmission network. The goal is to support decision-making around space weather mitigation investments by providing a first-order approximation of their potential economic benefits. We find that in the absence of mitigation, a severe but realistic storm could result in up to NZ$8.36 billion in lost GDP, with more than half stemming from cascading supply chain effects. Yet, even less severe scenarios incur losses exceeding NZ$3 billion. Importantly, research-led operational strategies, such as optimized switching and islanding, can avoid up to NZ$370 million in losses for as little as NZ$500,000 in expenditure, delivering a benefit-cost ratio of 740 to 1. Moreover, physical protections such as GIC blocking devices further reduce disruption to as low as NZ$1.12 billion, with avoided GDP losses up to NZ$2.3 billion, and benefit-cost returns up to 80 to 1. When also acknowledging unmodelled impacts, including multi-billion losses in capital equipment and long-term revenue, the economic rationale for pre-emptive mitigation becomes even more pertinent. Future research needs to integrate the modelling of capital and revenue losses for strategically important industrial facilities.