Risk assessment

[swansont]

Brought over from the nuclear reactor thread

 

i never understood cost effective risk assessment and it doesn't seem to work very well. the only way that we can have a less accident prone world is to start using the "mega paranoid" risk assessment (at least where nuclear reactors are concerned)

why is money more important than reducing the risk of disaster from improbable to impossible

after all no matter the odds this was bound to happen eventually

 

If you have a finite sum of money to spend, where do you spend it? Where will it do the most good? That's the question that has to be answered. It makes no sense to improve safety of something that has one death in a million if there is some other phenomenon that has one death per thousand.

 

In the US, 33,000 people died in traffic accidents last year (the lowest in decades; the average over the last 40 years is around 40,000); The EU has a similar total, though I'm not sure what the worldwide tally is. So now you need to justify spending the money on making nuclear reactors incrementally safer vs making driving incrementally safer. Where do spend a dollar or Euro which is most likely to save a life?

 

Even restricting ourselves to energy production, you do the same thing. The death rate from coal-produced energy is more than a hundred times higher than from nuclear (4000 times higher per TWh, but there is much more coal than nuclear). Coal is famous for the amount of radioactive material it regularly spews into the atmosphere. Now justify spending more on nuclear safety than coal safety, or other forms of energy production. More people have died in dam failures, pipeline/drilling explosions and coal mine disasters than from nuclear accidents.

 

http://blogs.scienceforums.net/swansont/archives/8209

[imatfaal]

Swanzontee has mentioned comparative risk analysis looking at a dollar spent in one area with perceived hazard or another area where danger is actual - there is also the more accountancy based cost per unit of production analysis. Every penny spent on a piece of infrastructure has to be added to the cost of the product. Who initally pays this extra marginal cost is a matter of policy (it could be subsidy, it could be reduced commercial profit, or higher retail bills); but in reality when all accounting is done it is the taxpayer/end-user who pays. The capital costs of building a nuclear power station have to be defrayed eventually one way or another - and in evaluating the project these costs are placed on the price per giga/terawatthour. At a certain price per unit energy we decide that the capital project is not worth continuing with.

 

The same accountancy applies to the production of gasoline at filling stations from crude oil; we could make the transportation, production, distribution etc safer for the workers involved and lower risks of environmental damage - but this will put up the price at the pump. In the end we make the decision that we can put up with hundreds/thousands of deaths per year and major spills every few years as long as the price of gallon stays down; it's a nasty calculus, and one we don't tend to make consciously or overtly.

[CaptainPanic]

Cost effective risk assessment works fine... we just don't have enough hard data to get a realistic result from it. Risk assessment fails if you become "mega paranoid" for 1 situation, and more relaxed in another. What you are saying is not that we should be "mega paranoid", but that we must improve our estimates of the chance and effect of a disaster.

 

In the case of nuclear technology, the bickering is always about 2 things:

- The actual odds that something goes wrong. Specific, what timescale we should be looking at for those risks (next couple of decades, or the next 100 millenia).

- The "costs" of a disaster.

 

Since the time scale is very long (especially when it comes to the nuclear waste), and the lifetime of reactors is often quite a bit longer than anticipated, it's understandable that there is some uncertainty about this.

The scale of a disaster, and the "costs" or damage associated with it is also uncertain... we just haven't had too many examples of nuclear disasters.

 

So, a lot of uncertainty creates a lot of room for people to discuss endlessly. Lobbyists, both on the pro and con side, have probably deliberately pushed this room for discussion to both extreme ends.

 

But the method itself is fine.

Btw, I agree that we might want to re-evaluate previous risk assessments of nuclear technology, and I also have a feeling that previous risk assessments produced an under-estimation of the actual risk.

Edited April 1, 2011 by CaptainPanic

[SMF]

Large corporations and big investors are pretty good at making risk assessments to guide their projects. Doesn't the continued existence of the Price-Anderson Nuclear Industries Indemnity Act suggest that fission plants are an unacceptable monetary risk? SM

[imatfaal]

I don't claim to be an expert on Price-Anderson - but laws insisting upon minimum insurance levels, mutual contingency funds, a multiple tiered payout plan, no blame litigation etc in return for limitations of liability, and an ultimate governmental funding tier is not restricted to the nuclear industry. the oil and shipping industry have similar set ups.

 

To an extent you are correct, but more importantly they demonstrate that a huge potential hazard exists - and that to facilitate the forward movement of that industry, a risk will be taken jointly by all participants of the industry and the government. The hazard is enormous - but the risk is acceptable.

[Marat]

Perhaps the answer to the problem set is that cost-benefit analysis has to be conducted in the context of human subjectivity rather than objective measures of risk and cost. A single, huge nuclear reactor disaster would cause more disruption of the social cohesion necessary to sustain our culture than the calculated material value of the disaster in terms of the odds of that ever happening multiplied times the cost of the disaster if it did happen.

 

A similar puzzle arises with the Learned Hand Formula in tort law, which states that a party is liable for the damages caused by its negligence if the probability of the accident occurring multiplied times the costs if the accident does occur exceed the costs of the safety measures needed to be taken to prevent the accident. The objection raised to the Hand formula is that injuries to humans and things humans have a right over should not be subjected to such a utilitarian cost-benefit analysis.

[imatfaal]

I am in danger of sounding like a big business apologist, but:

 

If an industry must take into account (either through insurance or increased costs) the potential and subjectively, individually-judged social consequences of any known hazard then nothing will ever pass a cost-benefit analysis. Industry does need to be able to limit liability and to avoid the need to include the social cost of taking certain risks within its calculations. I think it needs to be accepted that a corporation can take into account potential lawsuit for future unforeseen negligent acts, but that no corporation should see litigation costs as an alternative to solving a current problem.

 

And perhaps the system desired by Price Anderson is exactly that less objective/more subjective system that you call for. As the damage would be community wide, and would threaten entire social make-up, then the risks can only be covered by community/government based schemes. Normal tortious litigation would not have either the facility or scope to compensate a community that suffered in this manner.

[michel123456]

There is also an issue when one decides for a risk that someone else will encounter. There are a lot of activities (all activities actually) that have potential risks. When a worker at a building construction site falls from a scaffolding, all parties involved, including the worker, knew there were such a risk, even if all measures were taken to avoid it.

 

With a nuclear plant, things are somehow different. The one who decides to take the risk (the government?) is not the same one who will be injured. The risk calculation involves someone else who in most circumstances has no knowledge of the risk.

Edited April 1, 2011 by michel123456

[ewmon]

i never understood cost effective risk assessment and it doesn't seem to work very well. the only way that we can have a less accident prone world is to start using the "mega paranoid" risk assessment (at least where nuclear reactors are concerned)

why is money more important than reducing the risk of disaster from improbable to impossible after all no matter the odds this was bound to happen eventually

Anything humans do is imperfect' date=' and when humans view something that's less than perfect, they think in relative terms. Ultimately, we substitute "insurance" for "assurance", and the premiums paid to insurance companies figure into the break-even and profitability equations.

 

The word "inordinate" (off the scale) works well here, because in such cases as this, the [i']probability[/i] that a catastrophe will occur and the magnitude of such catastrophe are both "off the scale" of the human mind, and this means that we are in unfamiliar territory indeed.

[CaptainPanic]

I am in danger of sounding like a big business apologist, but:

 

If an industry must take into account (either through insurance or increased costs) the potential and subjectively, individually-judged social consequences of any known hazard then nothing will ever pass a cost-benefit analysis.

The risks associated with any activity are limited, and an assessment does not aim at zero-risk.

I completely agree with you that a risk assessment should not be subjectively, individually-judged.

 

It is true that in some cases it seems like an industry doesn't take all risks into account. In such a case, the industry should take them into account, and that would result in a higher price of whatever product they make or whatever service they provide. Too bad for them. The market will take care of this... either by letting them go bankrupt, or by accepting the higher price.

 

However, if poo hits the fan, someone will pay... and statistically poo will always hit the fan somewhere. The payment can be money, or damages of another kind, possibly even the ultimate price. And those costs are paid either by the industry itself, or government or society as a whole. So, if industry assesses a risk correctly, this would reduce costs somewhere else... and the costs associated to the activity will be paid (mostly) by the actors involved with it.

 

So, if the risk assessment is an under-estimation, possible damages are paid by a wider public.

If the risk assessment is correct, prevention is paid by industry themselves (and their customers). Possible damage is paid by industry and a wider public.

And if a risk is over-estimated, money is wasted. This too is something to be wary of.

Edited April 4, 2011 by CaptainPanic

[dragonstar57]

If you have a finite sum of money to spend, where do you spend it? Where will it do the most good? That's the question that has to be answered. It makes no sense to improve safety of something that has one death in a million if there is some other phenomenon that has one death per thousand.

 

In the US, 33,000 people died in traffic accidents last year (the lowest in decades; the average over the last 40 years is around 40,000); The EU has a similar total, though I'm not sure what the worldwide tally is. So now you need to justify spending the money on making nuclear reactors incrementally safer vs making driving incrementally safer. Where do spend a dollar or Euro which is most likely to save a life?

 

Even restricting ourselves to energy production, you do the same thing. The death rate from coal-produced energy is more than a hundred times higher than from nuclear (4000 times higher per TWh, but there is much more coal than nuclear). Coal is famous for the amount of radioactive material it regularly spews into the atmosphere. Now justify spending more on nuclear safety than coal safety, or other forms of energy production. More people have died in dam failures, pipeline/drilling explosions and coal mine disasters than from nuclear accidents.

 

http://blogs.scienceforums.net/swansont/archives/8209

but do you think that the company took the funds it saved by not building a higher sea wall and used them for road safety or invested it into clean coal?

 

it seems only reasonable to say things like

"there probably wont be a tsunami this high but we should built this wall a little higher just in case" or "we probably wont see a hurricane higher than category 3 hit these levies but maybe we will so we should make them stronger and higher"

or "this room is kind of important maybe we should put a water tight door on it"

or "things might go wrong here but if we spend a little more it is less likely.

Edited April 5, 2011 by dragonstar57

[Mr Skeptic]

There is also an issue when one decides for a risk that someone else will encounter. There are a lot of activities (all activities actually) that have potential risks. When a worker at a building construction site falls from a scaffolding, all parties involved, including the worker, knew there were such a risk, even if all measures were taken to avoid it.

 

With a nuclear plant, things are somehow different. The one who decides to take the risk (the government?) is not the same one who will be injured. The risk calculation involves someone else who in most circumstances has no knowledge of the risk.

 

No, things are exactly the same. Do you think constructing a building is of no risk to anyone but the workers? If badly made the building could collapse on the people inside it, or perhaps even on people outside the building who had nothing whatsoever to do with the building. Or the alcohol industry, where statistically the sale is going to result in deaths of people uninvolved in the sale or purchase of the alcohol, due to alcohol-related crimes or accidents. Almost everything you do will affect other people -- and nuclear plants are no exception, but not special either.

[swansont]

but do you think that the company took the funds it saved by not building a higher sea wall and used them for road safety or invested it into clean coal?

 

No. Why would they?

 

it seems only reasonable to say things like

"there probably wont be a tsunami this high but we should built this wall a little higher just in case" or "we probably wont see a hurricane higher than category 3 hit these levies but maybe we will so we should make them stronger and higher"

or "this room is kind of important maybe we should put a water tight door on it"

or "things might go wrong here but if we spend a little more it is less likely.

 

The question is quantitative— how much is a little more, and where does that stop? How much more do you spend? How high is the wall or levy? We could have built a 50' wall around New Orleans to prevent the flooding we saw from Katrina, but we didn't. And once you determine that, who pays? Does a country have the political will (and economic ability) to force taxes higher or electricity prices to increase so that the safety measures can be put in place, and do so before anything has gone wrong?

[zapatos]

it seems only reasonable to say things like

"there probably wont be a tsunami this high but we should built this wall a little higher just in case" or "we probably wont see a hurricane higher than category 3 hit these levies but maybe we will so we should make them stronger and higher"

or "this room is kind of important maybe we should put a water tight door on it"

or "things might go wrong here but if we spend a little more it is less likely.

And they did say things like that. And talked about it. And analyzed it. And made a decision. That is risk assessment.

 

Generally speaking risk assessment is:

1. Identify risks.

2. Determine the probability of a risk occurring.

3. Determine the impact if a risk occurs.

4. Based on the probability and impact assigned to a risk, decide how to mitigate the risk (which is basically reducing the probability and/or impact).

5. Repeat

 

The mitigation is tricky since you have to consider so many competing factors, such as time, money, regulations, stockholders, current technology, etc.

 

With unlimited resources they could have built a 100 foot high sea wall. But the consumers of the electricity would not have agreed to such a high electricity bill. So you do the best you can with the resources you have, and decide what level of risk you can accept.

 

Same thing people do every day when they decide whether or not to eat fatty food, smoke, or drive to the store. Major difference is that someone building a nuclear plant will do a much better job of it.