Environmental Risk:
Economics, Assessment, and Management
This lecture from chapter 3, pages 36 - 47
1. Characterizing Risk
- Risk: probability that a condition of action will lead to an
injury, damage, or loss.
- Probability: a mathematical statement about how likely it
is that something will happen.
- Examples: Chance of cancer if you smoke?*
- One in every 19 women and one in every 11 men will develop lung
cancer.
- Lung cancer is one of the deadliest forms of cancer.
- Most people will die from it within 5 years of diagnosis.
- *www.canadian-health-network.ca/servlet/ContentServer
2. Figure 3.1: Estimates of Selected Environmental Causes of Death
3. Consequences?
- Bad Outcome?
- Major: catastrophic --> dam fails
- Minor: skin irritation from exposure to cleaning chemical
- Factors
- Probability of exposure?
- Probability of adverse effect?
- Economics: how much will the clean-up cost, how many injured or
killed?
4. Decision-Making Process: The assessment, cost and consequences
of risks are all important to the decision-making process. (Fig 3.1)
5. Risk Assessment
- Definition: use of facts and assumptions to estimate the
probability of harm to human health or the environment.
- Used by management to make decisions
- Process should be orderly, clear and consistent
- Considerations
- Is there a risk?
- Magnitude of the risk?
- Consequences of negative outcome?
- Organizations that set industry-wide standards
- ISO - International Standardization Organization
- ASTM (from Wikipedia)
- American Society for Testing and Materials
- formed in 1898 in the US by a group of scientists and
engineers, to address the frequent rail breaks plaguing the
fast-growing railroad industry
- The group developed a standard for the steel used to
fabricate rails.
6. What degree of risk is acceptable?
- No such thing as zero risk
- Negligible risk
- no significant health or environmental risk
- Adequate safety margin to protect public health and the
environment?
- May still be controversy
- Risk of herbicides?
- Commercial logging risks soil erosion and loss of biodiversity -
- Logging industry sees minimal risk
- Environmentalists see risks unacceptable
7. Table 3.2: True and Perceived Risks
8. Why a difference in perception?
- Environmental Psychology field
- Public uses criteria other than health risk
- Studies show true environmental hazards (affect health) don’t get
highest attention from media or government
9. Fig 3.2: Perception of Risk: EPA vs. Public
10. Environmental Economics
- Economics: study of resource use to produce goods and services
and how they are distributed
- Many (most?) environmental problems are economic problems.
Why?
- waste in, waste out
- Pollution prevention pays
- can no longer ignore the cost
- may be governmental regulations to consider
11. Resource
- Supply of something that can be used
- Types
- Labor - human resource
- Capital -
- anything that enables the efficient production of goods and
services
- Examples: technology, information
- Land -
- Renewable
- formed or regenerated by natural processes
- Examples: soil, rivers, nutrients, forests, weather
- Nonrenewable
- Not replaced or very slowly replaced
- Iron ore, fossil fuels (coal, oil, natural gas)
12. Supply & Demand
- Scarcity exists when demand exceeds supply
- Supply: the amount of good or service people are willing to sell
at a given price
- Demand: the amount of a good or service that consumers are
willing and able to buy at a given price.
13. Figure 3.3: Fluctuation of price based on supply and
demand
14. Old Corrugated Cardboard Economics
- Supply varies little: 70% of discarded is recycled
- Demand varies based upon
- Economic strength increases - shipping of consumer goods
increases, supply decreases
- Export market - foreign markets strong, less available
domestically, supply decreases, cost increases
- Old cardboard price ~ $1.25/ton, cheaper to make new cardboard
15. Environmental Costs of Resource Exploitation
- Types
- Pollution (air & water)
- Biodiversity loss (extinctions of plants & animals)
- Cost difficult to assess
- Costs deferred
- paid at a later date because not initially recognized
- Examples: pesticides, dams, soil erosion
- Costs external = externalities
- cost born by others than who used the resource
- Examples: logging causes landslides, fills gravel bottoms
needed for fish spawning
- Government fixes, all taxpayers pay, not just those who built a
new home
16. Examples of pollution: many kinds, some major, some merely
annoying (Fig. 3.6)