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Cheap Insurance Against the Ultimate Black Swan

With minds fixated on next week's U.S. midterm elections and Fed QE2, I thought it could be a nice, light distraction to write about the greatest known threat to life on earth.

What is it?

Global warming, infectious disease, and thermonuclear war are some of the more common answers to this question.

However, there is another threat of perhaps even greater danger which doesn't receive nearly as much airtime, or resources devoted to its prevention.

Former astronaut Russell Schweickart recently penned a NY Times piece on the very real risks posed by asteroids to life on earth. I had the pleasure of meeting Mr. Schweickart several years ago, and he is generally considered the leading advocate for increasing awareness and addressing this threat.

Asteroids -- as any T-Rex fan will attest -- can be absolutely devastating. Strong scientific evidence suggests that 65 million years ago an asteroid of approximately seven to eight miles in diameter struck near Mexico and wiped out the dinosaurs and over half of all species.

It doesn't take an eight mile asteroid to cause significant damage. The 'Tunguska event', which featured an asteroid with a diamater of only 120 feet, leveled approximately 800 square miles of (thankfully) relatively empty Siberian forest. An asteroid much smaller than Tunguska could hit a heavily populated area and cause a loss of life in the millions.

Can Anything Be Done?

There is some good news. We already possess the technical knowledge to prevent asteroid impact. We can detect asteroids that may collide with earth, sometimes up to a decade in advance of potential impact. We also know what to do once we've spotted one that's on a collision course with our planet. One option can be described simply as using a spacecraft to "rear-end" the asteroid. This alters the asteroid's trajectory away from earth.

The bad news is that we are not investing the relative pittance it would take to mitigate asteroid impact risk. Schweickart estimates that it would cost roughly $250-$300 million over the next 10 years to track all asteroids and fully develop the deflection capability. Annual maintenance expense for the program would be $50-$75 million. These figures represent a small fraction of the U.S. federal budget.

So, the choice is pretty clear. We can either spend a few hundred millions dollars and mitigate asteroid risk. Or we can continue to roll the dice risking perhaps all life on earth.

Do we really need to think hard about this one?

Disclosure: No positions