Chapter 8: Evaluation of risk and risk management

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Chapter 8: Evaluation of risk and risk management

In this chapter, the complex process of determining the significance or value of the identified hazards and estimated risks to those concerned, or affected, is examined. The evaluation of risk is concerned with issues relating to how those affected by risks perceive them, the value issues underlying the perceived problem and the trade-off between the perceived risks and benefits. The controversy surrounding BSE is used as an example of where risk evaluation has proved hugely important in the implementation of decisions arising from risk assessment. The chapter looks at the factors involved in risk perception and risk acceptance.

The chapter also examines the advantages and disadvantages of the major approaches used in making risk management decisions - bootstrapping, formalised methods such as cost-risk-benefit analysis, and professional judgement. Examples of the use of these approaches in environmental management are discussed.

8.1 The importance of risk evaluation and perception

Risk evaluation attempts to define what the estimated risk actually means to people concerned with or affected by the risk. A large part of this evaluation will be the consideration of how people perceive risks. This section of the book provides an overview of the psychometric and cultural approaches underpinning risk perception, offering an insight into the reasons why risks are perceived in different ways.

8.2 How safe is safe enough?

A question that is fundamental when talking about risk issues is "How safe is safe enough?". An ERA will characterise the risk posed by a situation and then the process of risk management will eventually lead to a choice of action that will achieve the desired level of "safety". The determination of this "acceptable" or "tolerable" level of risk may have been prescribed before the risk assessment process begins - through societally determined acceptable levels of risk in the form of legislative environmental quality standards for instance, or industry derived "norms". In this case, risk management attempts to analyse which options for action based on the results of the risk assessment will produce these pre-determined risk levels. Where no acceptable risk standards exist, the risk management process will attempt to derive "acceptable" or tolerable risk on a case-by-case basis. This will always raise the question of "Acceptable to whom?". When risk assessment and management procedures are carried out by regulators or government, the aim is to produce societally acceptable risk levels. When an individual company carries out a risk assessment, in the absence of societally determined standards, risk levels will be determined which are acceptable to the company. These may have reference to societally acceptable levels or may be based on a formal risk-cost-benefit approach as advocated by some software packages on risk reduction.

Decision making to determine "acceptable" or "tolerable" risk uses a number of approaches. The three major approaches to acceptable risk decisions are professional judgement where technical experts devise solutions, bootstrapping where historical precedent guides decision making, and formal analyses where theory-based procedures for modelling problems and calculating the best decision are used. These approaches are explained in detail in the text.

8.3 Risk management action

As was discussed in Chapter 1 of the book, environmental risk can be:

  • transferred to another body such as an insurance company,
  • retained by a company or nation,
  • eliminated by removal of the risk agent, or reduced.

In most environmental risk management conducted by nations on behalf of society, risk reduction will be the risk management option chosen. For individuals or companies, risk transfer is a common approach. This may be required by legislation, especially for infrequent catastrophic events. Risk elimination is often very difficult because of all the social and economic effects the removal of an agent can create. For instance the elimination of a pesticide may have implications on the socio-economic conditions in a region.

Risk reduction for environmental risks can involve many techniques. For chemicals they are discussed in the draft European technical guidance document (CEC/ECB, 1997). Generally there are a range of approaches to risk reduction. These include:

  • Substitution. Can the agent be substituted by another, less risky agent? For instance, can a chemical pesticide be substituted by a biological method? What are the risks of the new agent being introduced into the scenario? Is the new agent as effective?
  • Information. Providing information about the safe use and disposal of agents will try to ensure that the risks assessed are the same as what actually occur in practice.
  • Education and information may also allow the public and users to choose lower risk options and force the manufacturers into the production of less risky agents.
  • Limit the availability of the agent by marketing bans or limits on the production or importation of the agent. Such a risk reduction technique has severe implications politically and economically and can often be controversial. Such decisions are taken at a national or regional level and at an international level such agreements are difficult to obtain.

8.4 Some concluding remarks

ERA is a process by which environmental risks can be examined and a qualitative or quantitative measure of risk derived. The process can never be wholly scientific, but uses scientific data to arrive at a measure of the risk that has been chosen to be examined. Many social factors, such as those discussed in this chapter, will heavily influence how environmental problems are formulated and therefore exactly what the ERA will examine. The result of the ERA may be a quantitative scientific estimate. It is important to recognise, however, that social factors will affect this risk estimate and are fundamental in the decisions that are made as a result of the ERA. ERA takes time, resources and energy. The answers provided by ERA will be crucial in decision-making. It may be wise for those who wish to use ERA to take heed of the handling of BSE and the Brent Spar, and recognise that often the social issues involved in environmental risk decisions will be just as important as the scientific assessments.

Most of the book focuses on the techniques used in ERA. The approaches to risk management discussed in this chapter are as important, in terms of the influence they have on the decision-making outcome, as the ERA itself. Risk management techniques are less transparent than those developed for ERA and the influence of different criteria on decision making is often difficult to unravel. Formal analysis can be more easily "opened up" to scrutiny by others but exactly the same criticisms used against ERA can be levelled at it (availability of data, the interpretation and uncertainty). The focus of attention in ERA in recent years has been moved to "tighten up" and increase formality within ERA. Environmental risk management needs to undergo the same process.

References for this chapter
Publications (books and journals)

European Environment Agency (EEA)
Kongens Nytorv 6
1050 Copenhagen K
Phone: +45 3336 7100