1. Environmental Risk: Perception, Voice, and Transfers
Burning tap water
Environmental Risk: Perception, Voice, and Transfers
Todd Rasmussen
The University of Georgia

2. Annual Death Risks
(Crouch and Wilson, 1982)

3. Other 1 in a Million Risks
Cosmic Rays
1 transcontinental round-trip airplane ride
Living 1.5 months in Colorado vs. sea level
Camping at 15,000 feet for 6 days
Other Radiation
20 days of sea-level background radiation
Living 2.5 months in a brick building
1/4 of a chest x-ray

4. More Cancer Risks Eating and Drinking Smoking Mortality vs. Morbidity
40 diet sodas (saccharin)
6 pounds of organic peanut butter (aflatoxins)
180 pints of milk (aflatoxins)
200 gallons of drinking water (Miami/New Orleans)
90 pounds of broiled steak (cancer only)
Smoking
2 cigarettes
Mortality vs. Morbidity
Death
Long-term disability

8. Addictive Drugs: The Cigarette Experience Thomas C
Addictive Drugs: The Cigarette Experience Thomas C. Schelling, (Science, 1992)
“Cigarettes are among the most addictive substances of abuse and by far the most deadly. In this country smokers know it and try to stop. Their success has been dramatic but partial and excruciatingly slow, and until recently quite uncoerced by government. Cigarettes and nicotine have characteristics distinct among addictive drugs, and some of these help explain why efforts to quit smoking are so often frustrated. Nicotine itself is the most interesting chemical in the treatment of addiction and, in some forms, can pose a dilemma: compromise by settling for pure nicotine indefinitely, or stay with cigarettes and keep trying to quit. Nicotine is not alone among addictive drugs in becoming increasingly identified with the poorer classes.”

9. Benzene Risk When refueling your car, close all car windows
Place plastic mitten on hand
Take and hold a deep breath
Open gas cap, remove nozzle, insert in car, set flow catch
Take five steps upwind before breathing
Dispose of plastic mitten in special trash
Wash skin immediately and thoroughly (at least one minute) if contacted by gas

10. Health Risks Emphasis on cancer-causing deaths Existing or known risks
Alcohol, tobacco, gasoline
Burden of proof is on government to demonstrate injury
New or foreign risks
New drugs, industrial chemicals
Burden of proof is on manufacturer to demonstrate safety of product
Natural vs. manufactured goods
Chemical risks are regulated (alar)
Natural toxins are not (aflatoxins)

11. Food Hazards Significant Minor Organic peanut butter (aflatoxins)
Organic celery (psoralens)
Brown mustard (allyl isothiocyanate)
Trans fat
Basil (estragole)
Diet soda (saccharin)
Minor
Pesticides
Herbicides
Drinking water
Decaffeinated coffee
Electron micrograph picture
of Aspergillus fumigatus

12. Risk Envelope:
Plot the number of deaths for a range of probabilities.

13. Balancing Risks
Do 1000 deaths in one crash, equal one death each in 1000 crashes
Does 1 airline crash = 1000 car crashes?
For the death penalty, does the death by execution of one innocent person equal the death of one innocent person by a criminal?
“Take calculated risks. That is quite different from being rash.” General George Patten

14. Automobiles vs. Airplanes
Incidence of deaths (per year and per mile) are much higher for automotive travel than for commercial aviation
Average risk is higher for cars than for aircraft
Maximum risk is higher for aircraft than for cars

15. Nuclear vs. Coal Nuclear may cause catastrophic deaths
Radiation from western coal can be very high
Global warming from coal, not from nuclear
Mercury poisoning from coal, not from nuclear
Both may cause catastrophic adverse impacts

16. Risk Comparison
Decision-making relies not just on the absolute risk, but on the difference in risk between alternatives
Should I ride my bike because the risk of driving is high?
Should infants be strapped into safety seats on airplanes?
Should I eat a harmful sugar substitute (saccharine) instead of real sugar?
“To be alive at all involves some risk.” Harold Macmillan

17. Fatalities per Million Exposure Hours (Failure Analysis Associates, Inc.)
Skydiving
128.71
Snowmobiling
0.88
General flying
15.58
Motoring
0.47
Motorcycling
8.80
Water skiing
0.28
Scuba diving
1.98
Bicycling
0.26
Living
1.53
Airline flying
0.15
Swimming
1.07
Hunting
0.08
“Only those who risk going too far
can possibly find out how far one can go.” TS Eliot.

18. Decision Metrics Used to choose the “best” alternative
Smallest average risk
Smallest maximum risk (Mini-Max)
Largest minimum risk (Maxi-Min)
Savage Regret (minimize the regret function)
“Take time to deliberate, but when the time for action has arrived, stop thinking and go in.” Napoleon Bonaparte

19. Benefit - Risk Calculation
Expected present value of all benefits (B) and losses (L) weighted by their probability of occurrence, p:
R = Sum { B p(B) + L p(L) }
Present Value is the current value of future benefits or losses obtained by using a discount factor (which is normally positive)

20. State Lottery Cost of lottery ticket: $1.00 Cost of management: 0.40
Amount of prize money:
Amount to state:
Value = B - L = $ $1.00 = - $0.65
“Our scientific power has outrun our spiritual power. We have guided missiles and misguided men.” Martin Luther King, Jr.

21. Risk Perception
Outcomes weighted by perceived value of possible losses and benefits:
R = Sum { B p(B) w(B) - L p(L) w(L) }
Risk taker: w(B) > w(L)
Risk neutral: w(B) = w(L)
Risk adverse: w(B) < w(L)

23. Ambiguity and Risk Perception
“Incorporating Uncertainty in Risk Communication and Policy Analysis and Benefit Evaluation for Environmental Regulation” by W.K. Viscusi, W.A. Magat, and J. Huber
This EPA study summarizes the responses of 646 individuals to environmental risk information involving different forms of risk ambiguity. Section 2 introduces the study and provides the basic elements of the test of whether ambiguity maters. Section 3 indicates how the order of presentation of the ambiguous information influences attitudes toward the risk. Section 4 introduces a complication involving the order in which risk studies have been carried out. Section 5 extends the analysis of ambiguous risk beliefs to consider the role of skewness in the risk information that is provided. Section 6 summarizes the authors' principal conclusions pertaining to risk ambiguity.

24. Risk Consumption As new technologies reduce adverse effects Examples
Either total losses (risks) are reduced,
Or behavior changes to maintain a constant risk
Examples
Air bags decrease risk of death in an accident.
As more air bags are installed, death rate is lower.
Serious injuries have increased, however.
Automatic Braking Systems (ABS) decrease accident risk.
As more ABS systems are installed, the death rate has not changed.
Drivers have adjusted to maintain the same risk.

25. Environmental Voice
This results from political and economic influence on community decisions
Various interest groups have differential access to media, party, government, courts, congress, president, and industry.
The risk function must be weighted by the ability to voice one’s interests, v:
R = Sum { B p(B) w(B) v(B) - L p(L) w(L) v(L) }

26. Environmental Racism
Many pollution sources lie in areas with poor and disenfranchised populations
Less capability to affect community governance (less voice)
Risks of poverty (malnourishment, crime, drugs, lack of jobs) means loss function is weighted less heavily

27. Pollution in US Cities Hits Minorities Hardest By David Holmstrom Staff writer for The Christian Science Monitor Thursday, January 7, 1993
“PARTLY a symbol, partly a protection, the battered chain-link fence around the dirt and weeds of Kingsley Street park in Buffalo, N.Y., is a reminder of an unpopular environmental legacy. United States cities are just beginning to face the fact that most inner cities are disproportionately riddled with all kinds of pollution.”

28. Risk Transfers Risk Producers vs. Risk Consumers
Industrial giants reap benefits while consumers must accept risk of loss
R = Sum { B p(B) w(B) v(B)} producers
- Sum {L p(L) w(L) v(L)} consumers
The consumer risk is referred to as the
Environmental Death Quota
The consumer risk has to be p(L) < 1:1,000,000
This risk threshold is used for many decisions
The number is not acceptable for processed foods, however.
The Delaney Clause requires such food to demonstrate no increased health risk

29. Local vs. Regional Transfers
For many years, industries increased the height of the smokestacks to reduce the effects of air quality problems.
But increased smokestack heights do not reduce the risk.
A taller smokestack spreads the risk from populations near the source to more distant populations.

30. “Plans are nothing; planning is everything.” Dwight D. Eisenhower
Waste Disposal
Geologic disposal is only a short-term solution
Some wastes decompose naturally
Many others remain toxic for thousands of years
This is a risk transfer from the present to future generations
“Plans are nothing; planning is everything.” Dwight D. Eisenhower

31. Global Trade Issues
Lax environmental laws and poor democratic traditions means voice of community often not considered
Generally, the only concern is whether boundary wastes will come back into U.S.
Even within this country, some border populations still have less voice than others.

32. Border Environment
EPA requires air and water pollution abatement in cities, except along international boundaries.
This creates two kinds of U.S. citizens, “regular” citizens and “border” citizens
No international protocols requiring clean-up to the higher standard
Problems include
Seattle – Vancouver (Puget Sound)
El Paso - Ciudad Jaurez
San Diego – Tijuana
Brownsville - Matamoros
Nogales, Arizona and Sonora

33. Trust
Can we be assured that the state benefits and risks are accurate?
Who benefits and who suffers if the risks are understated?
Does the producer of risk have an incentive to understate the risk and overstate the benefits?
Do governments / environmental groups / scientists have an incentive to overstate the risks?
Avian flu
Climate change
Polio

34. Prisoner’s Dilemma Two prisoners are plotting to escape
Reward for mutual cooperation
Gain +3 points each if both cooperate and escape
Punishment for mutual defection
Lose -1 point each if both defect and tell the guards
Temptation to defect
Gain +5 points for defector if the other cooperates
Sucker’s payoff
0 points for cooperator if other defects

35. Decision Matrix They Cooperate They Defect Expected Outcome
You Cooperate
+3 / +3
0 / +5
+1.5 / +4
You Defect
+5 / 0
-1 / -1
+2 / -0.5

36. Perceived Risk, Trust, and the Politics of Nuclear Waste Paul Slovic, James H. Flynn, Mark Layman, (Science, 1991)
“The Department of Energy's program for disposing of high-level radioactive wastes has been impeded by overwhelming political opposition fueled by public perceptions of risk. Analysis of these perceptions shows them to be deeply rooted in images of fear and dread that have been present since the discovery of radioactivity. The development and use of nuclear weapons linked these images to reality and the mishandling of radioactive wastes from the nation's military weapons facilities has contributed toward creating a profound state of distrust that cannot be erased quickly or easily. Postponing the permanent repository and employing dry-cask storage of wastes on site would provide the time necessary for difficult social and political issues to be resolved.”

37. High-Level Nuclear Waste
70,000 metric tons are destined for Yucca Mountain, NV, from 40 years of commercial nuclear power production.
At least this much waste will be generated in the U.S. every 50 years.
Plutonium half-life = 24,100 years
Over 98% of the radioactive contaminants could be recycled instead of buried.
The recycled wastes could replace fuel, thus eliminating production wastes/
Issues of nonpoliferation for reprocessing.

38. Nuclear Waste Options
1. Continue nuclear power production as is, geologically dispose of 70,000 metric tonnes every 50 years
2. Stop nuclear power production now, geologically dispose of 70,000 tonnes of waste
3. Recycle spent fuel, continue production until all spent fuel is recycled and destroyed.
4. Recycle spent fuel, continue production indefinitely.

39. Where is Risk Going? Non-human (ecosystem) risks: Human risks:
Global climate change
Acid deposition
Exotic species
Human risks:
Epidemiological assessments (cofactors, genetic predisposition)
Indoor air pollution (radon, synthetics, biohazards)
International protocols (air releases, worker exposure, ocean dumping)