Informational Regulation of Environmental Risks

This paper examines the law and economics of informational regulation (IR) of environmental risks. Informational regulation here means regulation which provides to affected stakeholders information on the operations of regulated entities, usually with the expectation that such stakeholders will then exert pressure on these entities to comply with regulations in a manner which serves the interests of stakeholders. As such, IR reinforces and augments direct regulatory monitoring and enforcement through third-party monitoring and incentives. The paper provides two contrasting frameworks, from law and economics, to analyze the costs and benefits likely to arise from IR and concludes with a discussion of the appropriate scope of IR as a substitute for and complement of traditional environmental regulation and law.     

Perception and Acceptance of Technological and Environmental Risks: Why Are Poor Countries Less Concerned?

The research has been aimed at answering two questions: (1) What factors impact perception and acceptance of technological and environmental hazards? (2) Why are rich societies involved more in protecting their environment and health than poor societies? Data has been collected from representative samples of two countries—Poland and Sweden. The results indicate that (1) contrary to earlier findings, the inverse relations between perceived benefits and dangers of hazards has not been observed, (2) acceptance of a risk has been mostly influenced by perceived benefits, (3) rejection of a risk has been mostly influenced by its perceived harmful consequences. Concerning the second question, it has been found that: (1) perceived hazard's danger and benefit is not the only factor that impacts its acceptance, and (2) a broader economic context can impact acceptance (tolerance) of hazards. It has been found that being aware of high dangers and not very high benefits of hazardous activities, Poles still have accepted them. Thus, Poles seem to follow an old proverb: “When one does not have what one likes, one has to like what one has.”     

1998 Annual Meeting Plenary Session: Assessing and Managing Risks in a Democratic Society

The theme of one of the plenary sessions held at the 1998 annual meeting of the Society for Risk Analysis, 'Assessing and Managing Risks in a Democratic Society,' was chosen to reflect the current debate about the best ways to integrate social, political, economic, and technical issues into fair risk management decisions. In the papers presented here, the three plenary speakers provide their perspectives on how environmental risk management decision making is—or should be—informed by democratic processes.
John D. Graham Making Sense of Risk
Robert F. Kennedy, Jr. Risk, Democracy, and the Environment
Jason Shogren Markets to Master Health and Environmental Risk
Audience Questions and Answers     

Gender, Race, and Perception of Environmental Health Risks

This paper reports the results of a national survey in which perceptions of environmental health risks were measured for 1275 white and 214 nonwhite persons. The results showed that white women perceived risks to be much higher than did white men, a result that is consistent with previous studies. However, this gender difference was not true of nonwhite women and men, whose perceptions of risk were quite similar. Most striking was the finding that white males tended to differ from everyone else in their attitudes and perceptions–on average, they perceived risks as much smaller and much more acceptable than did other people. These results suggest that sociopolitical factors such as power, status, alienation, and trust are strong determiners of people's perception and acceptance of risks.     

Setting Risk‐Informed Environmental Standards for Bacillus Anthracis Spores

In many cases, human health risk from biological agents is associated with aerosol exposures. Because air concentrations decline rapidly after a release, it may be necessary to use concentrations found in other environmental media to infer future or past aerosol exposures. This article presents an approach for linking environmental concentrations of Bacillus. anthracis (B. anthracis) spores on walls, floors, ventilation system filters, and in human nasal passages with human health risk from exposure to B. anthracis spores. This approach is then used to calculate example values of risk‐informed concentration standards for both retrospective risk mitigation (e.g., prophylactic antibiotics) and prospective risk mitigation (e.g., environmental clean up and reoccupancy). A large number of assumptions are required to calculate these values, and the resulting values have large uncertainties associated with them. The values calculated here suggest that documenting compliance with risks in the range of 10^?4 to 10^?6 would be challenging for small diameter (respirable) spore particles. For less stringent risk targets and for releases of larger diameter particles (which are less respirable and hence less hazardous), environmental sampling would be more promising.     

Compliance Strategies and Regulatory Effectiveness of Performance-Based Regulation of Chemical Accident Risks

This paper investigates the role that performance-based regulations can play in linking a firm's environmental, health, and safety concerns with their corporate strategy. The specific focus is on the performance standards required by the Clean Air Act Amendments (CAAA) which require firms that store or use certain chemicals to develop a Risk Management Plan (RMP) for reducing the likelihood and impact of accidents at their plants. Data from a series of case studies and interviews of executives in chemical firms reveal that proactive companies integrated many of the requirements of the CAAA into their management systems prior to the regulatory requirements. Most of these firms tend to be large ones. Small firms often lack the resources to implement these regulations and hence have tended to have a more difficult time with compliance.     

Health Risks and Air Pollution — Error Analysis for a Cross-Sectional Mortality Study

An attempt is made to analyze in quantitative terms the uncertainties in multiple regression estimates of the effects of air pollution on death rates. A range of factors--statistical fluctuations in numbers of deaths, differences in local age distribution, differences in smoking habits, errors in estimated pollution levels, migration, and variability of the characterization of socioeconomic effects--are assessed as potential sources of error. Both the precision and the robustness of the regression calculation are shown to be poor. Examples and illustrative calculations are given based on a study of U. K. death rates around the 1971 Census.     

Managing Disruption Risks in Supply Chains

There are two broad categories of risk affecting supply chain design and management: (1) risks arising from the problems of coordinating supply and demand, and (2) risks arising from disruptions to normal activities. This paper is concerned with the second category of risks, which may arise from natural disasters, from strikes and economic disruptions, and from acts of purposeful agents, including terrorists. The paper provides a conceptual framework that reflects the joint activities of risk assessment and risk mitigation that are fundamental to disruption risk management in supply chains. We then consider empirical results from a rich data set covering the period 1995–2000 on accidents in the U. S. Chemical Industry. Based on these results and other literature, we discuss the implications for the design of management systems intended to cope with supply chain disruption risks.     

Capturing and Integrating Knowledge for Managing Risks in Tunnel Works

Risk‐related knowledge gained from past construction projects is regarded as potentially extremely useful in risk management. This article describes a proposed approach to capture and integrate risk‐related knowledge to support decision making in construction projects. To ameliorate the problem related to the scarcity of risks information often encountered in construction projects, Bayesian Belief Networks are used and expert judgment is elicited to augment available information. Particularly, the article provides an overview of judgment‐based biases that can appear in the elicitation of judgments for constructing Bayesian Networks and the provisos that can be made in this respect to minimize these types of bias. The proposed approach is successfully applied to develop six models for top risks in tunnel works. More than 30 tunneling experts in the Netherlands and Germany were involved in the investigation to provide information on identifying relevant scenarios than can lead to failure events associated with tunneling risks. The article has provided an illustration of the applicability of the developed approach for the case of “face instability in soft soils using slurry shields.”     

Perceptions of Nuclear and Other Risks in Japan and the United States

As part of a study of nuclear power development in Japan and the United States, surveys of perceptions of risk toward 30 activities, substances, and technologies have been carried out in the Pacific Northwest and Tokyo, Japan. The results show that people in both countries have the highest level of dread toward nuclear waste disposal, nuclear accidents, and nuclear war, greater even than their dread of crime and AIDS. In addition to comparisons of dread, the paper also discusses similarities and differences between Japanese and American responses for other dimensions of risk perception.     

The Risk Screening for Indoor Air Pollution Chemicals in Japan

In recent years, public health problems caused by indoor air pollution have been drawing strong public concern in Japan. After conducting extensive exposure assessment, governmental agencies have taken effective measures to solve the problem; for instance, "Guidelines for indoor air quality (IAQ)" of 13 chemicals, for example, formaldehyde, toluene, and xylene, has been established. Thousands of chemicals have been identified in the indoor environment. Priority rating of those chemicals, however, was not based on the health risk level. We developed a risk-screening scheme for indoor air pollution chemicals and analyzed the current status of the risk levels of those chemicals in Japan. We researched scientific knowledge of health hazards and exposure surveys of indoor air pollution chemicals in Japan, and classified those chemicals based on the health risk level estimated from the scheme. The risk levels of 93 chemicals were characterized and six chemicals (formaldehyde, acrolein, 1,4-dichlorobenzene, benzene, tetrachloroethylene, and benzo(a)pyrene) were classified in the highest risk category.     

The Complementary Roles of Mitigation and Insurance in Managing Catastrophic Risks

This paper examines the impact that insurance coupled with specific risk mitigation measures (RMMs) could have on reducing losses from hurricanes and earthquakes as well as improving the solvency position of insurers who provide coverage against these hazards. We first explore why relatively few individuals adopt cost-effective RMMs by reporting on the results of empirical studies and controlled laboratory studies. We then investigate the impact that an RMM has on both the expected losses and those from a worst case scenario in two model cities—Oakland (an earthquake-prone area) and Miami/Dade County (a hurricane-prone area) which were constructed respectively with the assistance of two modeling firms. The paper then explores three programs for forging a meaningful public-private sector partnership: well-enforced building codes, insurance premium reductions linked with long-term loans, and lower deductibles on insurance policies tied to mitigation. We conclude by briefly examining four issues for future research on linking mitigation with insurance.     

经济增长和环境质量相容性政策条件——环境技术进步方向视角下的政策偏向效应检验

现有文献关注政策规制的经济与环境绩效,却并未重视不同类型政策的技术偏向,以及技术偏态情境中经济增长和环境质量相容发展的政策条件。本文扩展Acemoglu等(2012)的环境技术进步方向模型,数理演绎不同性质政策的技术偏向,以及技术进步方向转变时经济增长和环境质量的动态演化过程,再结合我国经济数据进行政策效果评价。研究结果发现:(1)环境技术进步方向是技术研发效率和环境政策累积作用的结果,环境政策会通过影响不同类型技术创新激励的方式,改变环境技术进步方向。(2)异质性政策转变技术进步方向,影响经济增长和环境质量,其作用存在不同的着力点和偏向性。其中,研发补贴政策的清洁技术偏向和产出激励效果明显,而规制类政策的环境质量效应优于研发补贴,但其对经济增长的作用表现出非线性U型特征。(3)单一政策干预往往难以破除经济增长和环境质量的两难困境,而政策组合的效果明显优于单一政策,特别是在碳排放权交易试点地区实施研发补贴政策,以及在碳排放权交易试点地区同时实行环境税与研发补贴,效果明显优于实施单一政策。但最优的政策组合并非固定不变,而往往处于动态变化过程中。     

Prioritizing Environmental Health Risks in the UAE

This article presents the results of a comparative environmental risk‐ranking exercise that was conducted in the United Arab Emirates (UAE) to inform a strategic planning process led by the Environment Agency‐Abu Dhabi (EAD). It represents the first national‐level application of a deliberative method for comparative risk ranking first published in this journal. The deliberative method involves a five‐stage process that includes quantitative risk assessment by experts and deliberations by groups of stakeholders. The project reported in this article considered 14 categories of environmental risks to health identified through discussions with EAD staff: ambient and indoor air pollution; drinking water contamination; coastal water pollution; soil and groundwater contamination; contamination of fruits, vegetables, and seafood; ambient noise; stratospheric ozone depletion; electromagnetic fields from power lines; health impacts from climate change; and exposure to hazardous substances in industrial, construction, and agricultural work environments. Results from workshops involving 73 stakeholders who met in five separate groups to rank these risks individually and collaboratively indicated strong consensus that outdoor and indoor air pollution are the highest priorities in the UAE. Each of the five groups rated these as being among the highest risks. All groups rated soil and groundwater contamination as being among the lowest risks. In surveys administered after the ranking exercises, participants indicated that the results of the process represented their concerns and approved of using the ranking results to inform policy decisions. The results ultimately shaped a strategic plan that is now being implemented.     

Managing Societal and Institutional Risk in Child Protection

Public sector services have been reshaped by two interacting factors: the growing dominance of risk management and the growing demands for transparency and accountability. For the caring professions, these have provoked radical reform. Using the child protection service as a case study, this article explores the impact of the changes on a service that deals with conflicting risks and has a poorly articulated knowledge base. Drawing on Rothstein et al. 's distinction between societal and institutional risks, it is argued that difficulties in managing societal risks are creating serious institutional risks. The latter are then being prioritized in the way the system operates. The preoccupation with such risks has been translated into concerted efforts to formalize the work of front line practitioners to make it transparent and auditable. Although done, in part, with the good intention of spreading good practice standards, this formalization has gone beyond the evidenced knowledge base to the extent that it is creating a new picture of "good practice" that omits significant dimensions of work and is distinct from measures of children's safety or welfare. Moreover, the process of formalization acts as an impediment to knowledge development in disciplines where such learning is urgently needed.     

Experience with urban air pollution in Paterson, New Jersey and implications for air pollution communication

Communication about air pollution can help reduce health risks, but a scattered, largely qualitative literature on air pollution beliefs, attitudes, and behaviors raises questions about its effectiveness. A telephone survey of Paterson, New Jersey (USA) residents tested four hypotheses aimed toward integrating these findings. Self-reported sheltering indoors during high pollution, the recommended strategy, was predicted by perceived air quality and self-reported "sensitivity" to air pollution. Nearly a quarter of the sample reported mandatory outdoor activity (e.g., work) that might increase their exposures, but this factor did not significantly affect self-reported sheltering. Perceptions of air quality did not correlate strongly with official monitoring data (U.S. Air Quality Index (AQI)); even people who regularly sought AQI data relied upon sensory cues to high pollution, and secondarily upon health cues. Use of sensory and health cues, definitions of what makes someone sensitive to air pollution, and (less strongly) definitions of vulnerability to air pollution varied widely. The minority aware of the AQI were more likely to seek it if they had illnesses or saw themselves in the targeted AQI audience, yet less likely if they believed themselves sensitive to pollution. However, their sense of the AQI's match to their own experience was driven by whether they used sensory (yes) or health (no) cues, not by illness status. Some urban residents might not have access to AQI data, but this barrier seems outweighed by need to bridge interpretive gaps over definitions of air pollution, sensory perception, vulnerability, and health consequences.     

The Role of Actuaries and Underwriters in Insuring Ambiguous Risks

Although there is a large body of literature on the unwillingness of the insurance industry to offer protection against risks such as environmental pollution, there has been only limited analysis regarding two key actors in the decision process—actuaries and underwriters. However, if actuaries and underwriters feel that a particular type of risk is uninsurable, then it is unlikely to be offered. This paper investigates how ambiguities associated with a risk affect actuary and underwriter decision processes, the paper contends that the decision of the insurance industry to not provide protection against environmental pollution liability is due to ambiguity of the risk. Empirical evidence from controlled laboratory experiments with actuaries and a model of choice in underwriter decision processes support this point.     

Social Equity and Environmental Risk1

Social equity has become an important concern of the environmental movement over the past decade. The equity issue is analyzed here for practically all of the inactive hazardous waste disposal sites on the National Priorities List (NPL) regulated under the Comprehensive Response Compensation and Liability Act and its 1986 Superfund Amendments and Reauthorization Act (CERCLA/ SARA). Two dimensions of equity are emphasized, namely, site location relative to the location of minority populations and the distribution of cleanup plans or Records of Decision (ROD) across communities with NPL sites that have different socioeconomic characteristics. With respect to site location, the percentage of Blacks and Hispanics aggregated at the Census Place or MCD level in communities with NPL sites was greater than is typical nationwide (largely attributable to the concentration of minority populations in a few large urban areas with NPL sites). In contrast, the percentage of the population below the poverty line in communities with NPL sites largely matched that of the nation as a whole. With respect to site cleanup, communities with relatively higher percentages of racial minority populations have fewer cleanup plans (Records of Decision signed) than other communities with NPL sites. Whether a ROD exists is influenced by when the site was designated for the NPL: sites designated earlier (prior to the SARA amendments of 1986) are more likely to have RODs, and also less likely to have high proportions of racial minority populations than sites designated later. This implies that initially the designation process may have resulted in NPL sites being located disproportionately in minority areas, but this pattern seems to be reversing itself in more recently designated sites. As with any statistical analysis, these findings are findings of association and not causality. Thus, racial and ethnic disproportionalities with respect to inactive hazardous waste site location seem to be concentrated in a relatively few areas. Disproportionalities with respect to cleanup do exist, but appear to be more a function of the nature of the process of designation of NPL sites in the early 1980s rather than a result of actions connected with cleanup plans per se. Further investigations are needed at alternative geographic scales to discern the sensitivity of patterns of inequity to distance from the sites.     

A Risk Assessment for Selected Lead-Induced Health Effects: An Example of a General Methodology

The research described here is part of a larger risk assessment project to aid the U.S. Environmental Protection Agency (EPA) in its review of the primary National Ambient Air Quality Standard for lead. The methodology can be applied to many situations in which a policy decision about a toxic substance is required in the face of incomplete data. Numerical results are presented for three potentially adverse lead-induced effects of interest to EPA: elevated erythrocyte protoporphyrin (EP), hemoglobin (Hb) decrement, and intelligence quotient (IQ) decrement.     

Chemical and Radiation Environmental Risk Management: Differences, Commonalities, and Challenges

Driven by differing statutory mandates and programmatic separation of regulatory responsibilities between federal, state, and tribal agencies, distinct chemical and radiation risk management strategies have evolved. In the field this separation poses real challenges since many of the major environmental risk management decisions we face today require the evaluation of both types of risks. Over the last decade, federal, state, and tribal agencies have continued to discuss their different approaches and explore areas where their activities could be harmonized. The current framework for managing public exposures to chemical carcinogens has been referred to as a "bottom up approach." Risk between 10(-4) and 10(-6) is established as an upper bound goal. In contrast, a "top down" approach that sets an upper bound dose limit and couples with site specific As Low As Reasonably Achievable Principle (ALARA), is in place to manage individual exposure to radiation. While radiation risk are typically managed on a cumulative basis, exposure to chemicals is generally managed on a chemical-by-chemical, medium-by-medium basis. There are also differences in the nature and size of sites where chemical and radiation contamination is found. Such differences result in divergent management concerns. In spite of these differences, there are several common and practical concerns among radiation and chemical risk managers. They include 1) the issue of cost for site redevelopment and long-term stewardship, 2) public acceptance and involvement, and 3) the need for flexible risk management framework to address the first two issues. This article attempts to synthesize key differences, opportunities for harmonization, and challenges ahead.