Chapter 3: Risk Assessment and Management Book Title: Environmental Hazards: Assessing Risk and Reducing Disasters Author: Keith Smith Publisher: Routledge: Taylor & Francis Group/ Edition: Fourth THE NATURE OF RISK The Chinese word for risk ‘weij-ji’ combines the characters meaning ‘opportunity’ and ‘danger’ to show that uncertainty always involved some balance between profit and loss. Risk cannot be eliminated, so it has to be assessed and managed in order to reduce disaster. Risk assessmentinvolved evaluating the significance of risk, either quantitatively or qualitatively. Quantitative risk assessment can be expressed as: Risk= Hazard (probability) x Loss (expected) Preparedness (loss mitigation) Quantitative risk assessment is process understood by a minority of the public and has not been attempted for all environmental hazards. Even when risk have quantified, uncertainties attach to the estimate and its interpretations when drawing up spending priorities for limited recourses. Risks also need to be assessed in a qualitative way more accessible to lay people. The key step in disaster reduction is risk managementthat aims to lower the treats from known hazards whilst maximising any related benefits. Potentially almost every person and organization has something to contribute to risk management but achieving optimum safety involves controversial value judgements. There are great difficulties in deciding what is an acceptable level of risk, who benefits from risk assessment and management, who pays and what constituted success or failure in risk reduction policy. As Keeney (1995) stated, a second approach to risk required both good sciences and good judgement. Neither risk assessment nor risk management can be divorced from choices that, in turn, are conditioned by individual’s beliefs and circumstances. Many people make decisions and take actions about hazards based on their personal perception of risk. Therefore, risk perceptionhas to be regarded as a valid component of risk management alongside more scientific assessments. Distinctions are drawn between objective and perceived risks. This is because individuals perceive risks intuitively and often quite differently from the results obtained by more objective assessments that are based on financial cost-benefit models (Starr and Whipple, 1980). Resolving the conflict between the outcome of technical risk analysis and more subjective risk perception is a major problem in hazard management. The type and degree of perceived risk varies greatly according to location, occupation and lifestyle, even between individuals of the age and sex factors, and between nations (Rohrmann, 1994). It is common to classify risks into two main categories: 1
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