Insights into the Societal Risk of Nuclear Power Plant Accidents

The elements of societal risk from a nuclear power plant accident are clearly illustrated by the Fukushima accident: land contamination, long‐term relocation of large numbers of people, loss of productive farm area, loss of industrial production, and significant loss of electric capacity. NUREG‐1150 and other studies have provided compelling evidence that the individual health risk of nuclear power plant accidents is effectively negligible relative to other comparable risks, even for people living in close proximity to a plant. The objective of this study is to compare the societal risk of nuclear power plant accidents to that of other events to which the public is exposed. We have characterized the monetized societal risk in the United States from major societally disruptive events, such as hurricanes, in the form of a complementary cumulative distribution function. These risks are compared with nuclear power plant risks, based on NUREG‐1150 analyses and new MACCS code calculations to account for differences in source terms determined in the more recent SOARCA study. A candidate quantitative societal objective is discussed for potential adoption by the NRC. The results are also interpreted with regard to the acceptability of nuclear power as a major source of future energy supply.     

Evaluating the Cost,Safety, and Proliferation Risks of Small Floating Nuclear Reactors

It is hard to see how our energy system can be decarbonized if the world abandons nuclear power, but equally hard to introduce the technology in nonnuclear energy states. This is especially true in countries with limited technical, institutional, and regulatory capabilities, where safety and proliferation concerns are acute. Given the need to achieve serious emissions mitigation by mid‐century, and the multidecadal effort required to develop robust nuclear governance institutions, we must look to other models that might facilitate nuclear plant deployment while mitigating the technology's risks. One such deployment paradigm is the build‐own‐operate‐return model. Because returning small land‐based reactors containing spent fuel is infeasible, we evaluate the cost, safety, and proliferation risks of a system in which small modular reactors are manufactured in a factory, and then deployed to a customer nation on a floating platform. This floating small modular reactor would be owned and operated by a single entity and returned unopened to the developed state for refueling. We developed a decision model that allows for a comparison of floating and land‐based alternatives considering key International Atomic Energy Agency plant‐siting criteria. Abandoning onsite refueling is beneficial, and floating reactors built in a central facility can potentially reduce the risk of cost overruns and the consequences of accidents. However, if the floating platform must be built to military‐grade specifications, then the cost would be much higher than a land‐based system. The analysis tool presented is flexible, and can assist planners in determining the scope of risks and uncertainty associated with different deployment options.     

Limitations on the Usefulness of Risk Assessment

Quantitative risk assessment (QRA) is now regarded as an essential component in the analysis of risks arising from installations classified as major hazards. The purpose of this paper is to discuss the value of the results in decision-making in practical situations. The use made of QRA in three contrasting cases which came to extensive public attention in the U.K. is examined. The first concerned an extension of domestic development near a chemical factory; the second an extension to a large petrochemical complex; and the third to a proposal to build a pressurized water reactor. The two public inquiries concerned with the chemical industry accepted standards of individual risk which were comparable to the risks from everyday accidents; the evidence of societal risk that could arise from major accidents at the petrochemical complex was compared with that of a local natural hazard — flooding. Higher standards of individual safety were set in the inquiry into the PWR proposal, and the definition of societal risk was debated at length. The QRA results were analyzed to show that risks arising from accidents were lower than those from normal operations, but they were used explicitly as a check on the overall safety of the design and of the operational and licensing organization. Such qualitative examination will always be required in addition to QRA. All these inquiries were faced with considerable technical argument. There is a need for the full details of risk calculations to be clear. The usefulness of QRA as an input to decision-making would be much enhanced if the technical points at issue could be clarified outside a formal public inquiry. In addition, there are some technical questions which apply to many installations. There should be better mechanisms of technical debate to achieve a measure of agreement on the optimum methods of calculation in these cases, and some possibilities are explored.     

Bayesian Data Analysis of Severe Fatal Accident Risk in the Oil Chain

We analyze the risk of severe fatal accidents causing five or more fatalities and for nine different activities covering the entire oil chain. Included are exploration and extraction, transport by different modes, refining and final end use in power plants, heating or gas stations. The risks are quantified separately for OECD and non‐OECD countries and trends are calculated. Risk is analyzed by employing a Bayesian hierarchical model yielding analytical functions for both frequency (Poisson) and severity distributions (Generalized Pareto) as well as frequency trends. This approach addresses a key problem in risk estimation—namely the scarcity of data resulting in high uncertainties in particular for the risk of extreme events, where the risk is extrapolated beyond the historically most severe accidents. Bayesian data analysis allows the pooling of information from different data sets covering, for example, the different stages of the energy chains or different modes of transportation. In addition, it also inherently delivers a measure of uncertainty. This approach provides a framework, which comprehensively covers risk throughout the oil chain, allowing the allocation of risk in sustainability assessments. It also permits the progressive addition of new data to refine the risk estimates. Frequency, severity, and trends show substantial differences between the activities, emphasizing the need for detailed risk analysis.     

Experimental Evidence Against the Paradigm of Mortality Risk Aversion

This article deals with the question of how societal impacts of fatal accidents can be integrated into the management of natural or man‐made hazards. Today, many governmental agencies give additional weight to the number of potential fatalities in their risk assessments to reflect society's aversion to large accidents. Although mortality risk aversion has been proposed in numerous risk management guidelines, there has been no evidence that lay people want public decisionmakers to overweight infrequent accidents of large societal consequences against more frequent ones of smaller societal consequences. Furthermore, it is not known whether public decisionmakers actually do such overweighting when they decide upon the mitigation of natural or technical hazards. In this article, we report on two experimental tasks that required participants to evaluate negative prospects involving 1–100 potential fatalities. Our results show that neither lay people nor hazard experts exhibit risk‐averse behavior in decisions on mortality risks.     

Modellgestützte Flexibilitätsanalyse von Strategien zur Ersatzteilversorgung in der Nachserienphase

An important task in after sales service is the provision of spare parts for durables. Due to its nature and dependence on earlier sales, the demand for spare parts is inherently dynamic and uncertain requiring for high procurement flexibility. During the product life cycle, inventory management of spare parts is performed efficiently under use of flexibility provided by existing production facilities. This situation completely changes once the OEM ceases production of the parent product. A prime option of procuring spare parts for the End-of-production period is to place a final order for parts when regular production ends. Besides low unit production costs, this option does not contain any flexibility, yielding a high risk of obsolescence of stored parts, and at the same time a high risk of not being able to satisfy all demand during the service period. In order to increase flexibility further options like extra production at higher unit cost or remanufacturing of components taken from used products could be used. After introducing the problem and a basic quantitative model, we evaluate flexibility properties of strategies using different combinations of the above options. In doing so we distinguish between quantity, time, and stock related flexibility. In a comprehensive numerical study it is investigated to which extent flexibility properties of the different strategies can contribute to their economic profitability.     

Perceived Risks of Conventional and Organic Produce: Pesticides, Pathogens, and Natural Toxins

Public risk perceptions and demand for safer food are important factors shaping agricultural production practices in the United States. Despite documented food safety concerns, little attempt has been made to elicit consumers' subjective risk judgments for a range of food safety hazards or to identify factors most predictive of perceived food safety risks. In this study, over 700 conventional and organic fresh produce buyers in the Boston area were surveyed for their perceived food safety risks. Survey results showed that consumers perceived relatively high risks associated with the consumption and production of conventionally grown produce compared with other public health hazards. For example, conventional and organic food buyers estimated the median annual fatality rate due to pesticide residues on conventionally grown food to be about 50 per million and 200 per million, respectively, which is similar in magnitude to the annual mortality risk from motor vehicle accidents in the United States. Over 90% of survey respondents also perceived a reduction in pesticide residue risk associated with substituting organically grown produce for conventionally grown produce, and nearly 50% perceived a risk reduction due to natural toxins and microbial pathogens. Multiple regression analyses indicate that only a few factors are consistently predictive of higher risk perceptions, including feelings of distrust toward regulatory agencies and the safety of the food supply. A variety of factors were found to be significant predictors of specific categories of food hazards, suggesting that consumers may view food safety risks as dissimilar from one another. Based on study findings, it is recommended that future agricultural policies and risk communication efforts utilize a comparative risk approach that targets a range of food safety hazards.     

Flood Risk Assessment in the Netherlands: A Case Study for Dike Ring South Holland

Large parts of the Netherlands are below sea level. Therefore, it is important to have insight into the possible consequences and risks of flooding. In this article, an analysis of the risks due to flooding of the dike ring area South Holland in the Netherlands is presented. For different flood scenarios the potential number of fatalities is estimated. Results indicate that a flood event in this area can expose large and densely populated areas and result in hundreds to thousands of fatalities. Evacuation of South Holland before a coastal flood will be difficult due to the large amount of time required for evacuation and the limited time available. By combination with available information regarding the probability of occurrence of different flood scenarios, the flood risks have been quantified. The probability of death for a person in South Holland due to flooding, the so‐called individual risk, is small. The probability of a flood disaster with many fatalities, the so‐called societal risk, is relatively large in comparison with the societal risks in other sectors in the Netherlands, such as the chemical sector and aviation. The societal risk of flooding appears to be unacceptable according to some of the existing risk limits that have been proposed in literature. These results indicate the necessity of a further societal discussion on the acceptable level of flood risk in the Netherlands and the need for additional risk reducing measures.     

The Bounded Rationality Bias in Managerial Valuation of Real Options: Theory and Evidence from IT Projects*

Although real options theory normatively suggests that managers should associate real options with project value, little field research has been conducted to test whether they suffer from systematic biases in doing so. We draw on the notion of bounded rationality in managerial decision making to explore this understudied phenomenon. Using data collected from managers in 88 firms, we show that managers exhibit what we label the bounded rationality bias in their assessments: They associate real options with value only when a project's easily quantifiable benefits are low, but fail to do so when they are high. The study also contributes the first set of empirical measures for all six types of real options. The study contributes to managerial practice by identifying the conditions under which managers must be vigilant about inadvertently neglecting real options and by providing a simple approach for assessing real options in technology development projects.     

Duties to Future Generations, Proxy Consent, Intra- and Intergenerational Equity: The Case of Nuclear Waste

How does one deal with problems of risk transfer if it is the case that increasing risks to future generations decreases the risks to present generations, and increasing the risks to present generations decreases the risks to future generations? In the case of high‐level nuclear waste and spent fuel, for example, should billions of dollars be spent to secure the wastes and protect future generations, or should the same monies be spent on present‐day needs, under the assumption that future generations will be better able to deal with the waste than we are at present? Although these questions may appear insoluble, they become less so when one recognizes several common ethical and logical errors that beset many discussions of technological risk and duties to future generations. After briefly explaining the grounds for inter‐ and intragenerational equity, this analysis argues for three propositions about many treatments of inter‐ and intragenerational ethics: (1) these discussions often err because they frame policy arguments in terms that ignore rights and focus on maximizing welfare or utility, (2) they err because they frequently frame policy arguments in ways that set inter‐ and intragenerational welfare at odds, when they are not, because they ignore ameliorating practices and the conditions for proxy consent, and (3) they also err because they engage in risk practices that do not match their risk rhetoric.     

EDB: A Case Study in Communicating Risk

This is a report on the Environmental Protection Agency's (EPA's) efforts to communicate with the public about the risks of ethylene dibromide (EDB), what the agency said it was doing about these risks and what information the public actually received through television and newspapers. Although special in many ways, the EDB case illustrates the problems that regulatory agencies have when they must take regulatory action and assure the public that the risks in question are being dealt with adequately. It also illustrates issues that the press faces. Above all, it illustrates the barriers to communication presented by the different perspectives of regulatory agencies and individuals and the types of information they each are most interested in.     

Some Limitations of Qualitative Risk Rating Systems

Qualitative systems for rating animal antimicrobial risks using ordered categorical labels such as “high,”“medium,” and “low” can potentially simplify risk assessment input requirements used to inform risk management decisions. But do they improve decisions? This article compares the results of qualitative and quantitative risk assessment systems and establishes some theoretical limitations on the extent to which they are compatible. In general, qualitative risk rating systems satisfying conditions found in real‐world rating systems and guidance documents and proposed as reasonable make two types of errors: (1) Reversed rankings, i.e., assigning higher qualitative risk ratings to situations that have lower quantitative risks; and (2) Uninformative ratings, e.g., frequently assigning the most severe qualitative risk label (such as “high”) to situations with arbitrarily small quantitative risks and assigning the same ratings to risks that differ by many orders of magnitude. Therefore, despite their appealing consensus‐building properties, flexibility, and appearance of thoughtful process in input requirements, qualitative rating systems as currently proposed often do not provide sufficient information to discriminate accurately between quantitatively small and quantitatively large risks. The value of information (VOI) that they provide for improving risk management decisions can be zero if most risks are small but a few are large, since qualitative ratings may then be unable to confidently distinguish the large risks from the small. These limitations suggest that it is important to continue to develop and apply practical quantitative risk assessment methods, since qualitative ones are often unreliable.     

Improving Risk Management: From Lame Excuses to Principled Practice

The three classic pillars of risk analysis are risk assessment (how big is the risk and how sure can we be?), risk management (what shall we do about it?), and risk communication (what shall we say about it, to whom, when, and how?). We propose two complements as important parts of these three bases: risk attribution (who or what addressable conditions actually caused an accident or loss?) and learning from experience about risk reduction (what works, and how well?). Failures in complex systems usually evoke blame, often with insufficient attention to root causes of failure, including some aspects of the situation, design decisions, or social norms and culture. Focusing on blame, however, can inhibit effective learning, instead eliciting excuses to deflect attention and perceived culpability. Productive understanding of what went wrong, and how to do better, thus requires moving past recrimination and excuses. This article identifies common blame‐shifting “lame excuses” for poor risk management. These generally contribute little to effective improvements and may leave real risks and preventable causes unaddressed. We propose principles from risk and decision sciences and organizational design to improve results. These start with organizational leadership. More specifically, they include: deliberate testing and learning—especially from near‐misses and accident precursors; careful causal analysis of accidents; risk quantification; candid expression of uncertainties about costs and benefits of risk‐reduction options; optimization of tradeoffs between gathering additional information and immediate action; promotion of safety culture; and mindful allocation of people, responsibilities, and resources to reduce risks. We propose that these principles provide sound foundations for improving successful risk management.     

Spatial Optimization of Future Urban Development with Regards to Climate Risk and Sustainability Objectives

Future development in cities needs to manage increasing populations, climate‐related risks, and sustainable development objectives such as reducing greenhouse gas emissions. Planners therefore face a challenge of multidimensional, spatial optimization in order to balance potential tradeoffs and maximize synergies between risks and other objectives. To address this, a spatial optimization framework has been developed. This uses a spatially implemented genetic algorithm to generate a set of Pareto‐optimal results that provide planners with the best set of trade‐off spatial plans for six risk and sustainability objectives: (i) minimize heat risks, (ii) minimize flooding risks, (iii) minimize transport travel costs to minimize associated emissions, (iv) maximize brownfield development, (v) minimize urban sprawl, and (vi) prevent development of greenspace. The framework is applied to Greater London (U.K.) and shown to generate spatial development strategies that are optimal for specific objectives and differ significantly from the existing development strategies. In addition, the analysis reveals tradeoffs between different risks as well as between risk and sustainability objectives. While increases in heat or flood risk can be avoided, there are no strategies that do not increase at least one of these. Tradeoffs between risk and other sustainability objectives can be more severe, for example, minimizing heat risk is only possible if future development is allowed to sprawl significantly. The results highlight the importance of spatial structure in modulating risks and other sustainability objectives. However, not all planning objectives are suited to quantified optimization and so the results should form part of an evidence base to improve the delivery of risk and sustainability management in future urban development.     

Should Persons with Diabetes Be Licensed to Drive Trucks?—Risk Management

How should a regulatory agency interpret a risk analysis that concludes there is a small increase in risk? The agency must decide on behalf of society whether the increased risk is large enough to justify banning the risky activity or taking some other step to lessen the risks. In a companion paper (Songer et al.), we conclude that licensing insulin using persons to drive commercial motor vehicles in interstate commerce would result in 42 additional crashes each year. Here we address risk management issues by interpreting the number of additional crashes and the relative risks of the prospective handicapped drivers. Are the number of additional crashes (42) significant? Is the increase in the annual crash risk (from 0.00785 to 0.032 for non-insulin dependent and 0.048 for insulin dependent persons) significant? Are the relative risks significant for all insulin using drivers (4.7)? For drivers with a history of severe hypoglycemic reactions (19.8)? How should society tradeoff risk increases for increases in opportunity for these handicapped persons? We review other social decisions concerning highway safety: Accepting the increasing risks of letting 16 year olds drive, allowing extremely light cars, allowing some unsafe highways, and allowing extremely unsafe driving conditions at some times of day. We conclude that the additional risks from insulin using persons are well within the current accepted range of risks. Currently, 70% of states permit insulin using persons to drive trucks within their state. Nonetheless, the social cost, due to fatalities, injuries, and property damage from allowing a person with a history of severe hypoglycemic reactions to drive is more than $19,700 per year.     

Embracing risk as a core competence: The case of CEMEX

In this paper we argue that risk management can be an important source of competitive advantage for firms. For this to happen, managers must overcome four deep-seated notions about the management of risk: the myopic conception that risk is a collection of unconnected threats to the survival of a firm, the belief that risk management is largely a financial activity, the idea that risk management is solely a top management team task, and a blind faith that CEOs can continuously anticipate the risks that firms must address on an ongoing basis. Challenging these four misconceptions reveals that risk management can be an activity that is value creating, not just value preserving. Indeed, rather than indiscriminately shedding all types of risks, companies can develop new sources of competitive advantage by embracing those risks that they are relatively better at managing than their rivals. We illustrate our arguments by analyzing the risk management practices at CEMEX, the Mexican cement manufacturer.     

An Advanced Heuristic for Multiple‐Option Spare Parts Procurement after End‐of‐Production

After‐sales service is a major source of profit for many original equipment manufacturers in industries with durable products. Successful engagement in after‐sales service improves customer loyalty and allows for competitive differentiation through superior service like an extended service period during which customers are guaranteed to be provided with service parts. Inventory management during this period is challenging due to the substantial uncertainty concerning demand over a long time horizon. The traditional mechanism of spare parts acquisition is to place a large final order at the end of regular production of the parent product, causing major holding costs and a high level of obsolescence risk. With an increasing length of the service period, more flexibility is needed and can be provided by adding options like extra production and remanufacturing. However, coordinating all three options yields a complicated stochastic dynamic decision problem. For that problem type, we show that a quite simple decision rule with order‐up‐to levels for extra production and remanufacturing is very effective. We propose a heuristic procedure for parameter determination which accounts for the main stochastic and dynamic interactions in decision making, but still consists of relatively simple calculations that can be applied to practical problem sizes. A numerical study reveals that the heuristic performs extremely well under a wide range of conditions, and therefore can be strongly recommended as a decision support tool for the multi‐option spare parts procurement problem. A comparison with decision rules adapted from practice demonstrates that our approach offers an opportunity for major cost reductions.     

Project risk management using multiple criteria decision-making technique and decision tree analysis: a case study of Indian oil refinery

This study proposes an integrated analytical framework for effective management of project risks using combined multiple criteria decision-making technique and decision tree analysis. First, a conceptual risk management model was developed through thorough literature review. The model was then applied through action research on a petroleum oil refinery construction project in the Central part of India in order to demonstrate its effectiveness. Oil refinery construction projects are risky because of technical complexity, resource unavailability, involvement of many stakeholders and strict environmental requirements. Although project risk management has been researched extensively, practical and easily adoptable framework is missing. In the proposed framework, risks are identified using cause and effect diagram, analysed using the analytic hierarchy process and responses are developed using the risk map. Additionally, decision tree analysis allows modelling various options for risk response development and optimises selection of risk mitigating strategy. The proposed risk management framework could be easily adopted and applied in any project and integrated with other project management knowledge areas.     

The Impact of Dietary Changes Among the Inuit of Nunavik (Canada): A Socioeconomic Assessment of Possible Public Health Recommendations Dealing with Food Contamination

Inuit populations meet a large portion of their food needs by eating country food in which pollutants are concentrated. Despite the fact that they contain pollutants, the consumption of country food has many health, social, economic, and cultural benefits. A risk determination process was set up in order to help regional health authorities of Nunavik to deal with this particular issue. Based on Nunavik health authorities' objectives to encourage the region's inhabitants to change their dietary habits, and on both the risks and the benefits of eating country food, several management options were developed. The options aimed at reducing exposure to contaminants by either substituting certain foods with others that have a lower contaminant content or by store-bought foods. This article aims at assessing the potential economic impact of these risk management options before being implemented. Relevant economic data (aggregate income and monetary outlays for the purchase of food and equipment required for food production by households) were collected and identified to serve as a backdrop for the various replacement scenarios. Results show that household budgets, and the regional economy, are not significantly affected by the replacement of contaminated foods with the purchase of store-bought meat, and even less so if the solution involves replacing contaminated foods with other types of game hunted in the region. When financial support is provided by the state, the households can even gain some monetary benefits. Results show that public health authorities' recommended changes to dietary habits among the Inuit of Nunavik would not necessarily involve economic constraints for Inuit households.     

相关性下的银行风险集成研究综述

银行风险之间的相关关系会使风险之间相互转化，相互影响，令风险呈现出放大或者缩小的趋势，显著影响着银行风险度量结果的准确性。银行风险集成致力于在充分考虑银行风险相关关系的基础上，对银行风险进行较为准确的度量。但是银行风险具有相关关系种类繁多、表现形式复杂、以及数据的可获得性差等显著特征，导致银行风险的集成度量领域存在诸多挑战。本文对相关性下的银行风险集成研究进行综述，具体从集成对象、集成方法和集成数据三个层次系统展开。首先对银行风险及其蕴含的种类繁多的相关关系类型进行解析，然后分析银行风险相关关系表征出的多种复杂特性，根据对这些特性的刻画能力对银行风险的集成方法进行划分和比较，最后总结了获取银行风险集成数据的多种途径。在此基础上，进一步分析了银行风险集成研究的难点和未来趋势。