Nightmare Scenario: The Fallacy of Worst-Case Thinking: Economist, Author and University Lecturer Dylan Evans Discusses Why Managing the Risk of a Nightmare Scenario Can Be Counterproductive in the Following Passage from His Upcoming Book "Risk Intelligence: How to Live with Uncertainty."

Article excerpt

There's something mesmerizing about apocalyptic scenarios. Like an alluring femme fatale, they exert an uncanny pull on the imagination. That is why what security expert Bruce Schneier calls "worst-case thinking" is so dangerous. It substitutes imagination for thinking, speculation for risk analysis and fear for reason.

One of the clearest examples of worst-case thinking was the so-called "1% doctrine," which Dick Cheney is said to have advocated while he was vice president in the George W. Bush administration. According to journalist Ron Suskind, Cheney first proposed the doctrine at a meeting with CIA Director George Tenet and National Security Advisor Condoleezza Rice in November 2001.

Responding to the thought that Al Qaeda might want to acquire a nuclear weapon, Cheney apparently remarked: "If there's a 1% chance that Pakistani scientists are helping Al Qaeda build or develop a nuclear weapon, we have to treat it as a certainty in terms of our response. It's not about our analysis ... It's about our response."

By transforming low-probability events into complete certainties whenever the events are particularly scary, worst-case thinking leads to terrible decision making. For one thing, it's only half of the cost/benefit equation. "Every decision has costs and benefits, risks and rewards," Schneier points out. "By speculating about what can possibly go wrong, and then acting as if that is likely to happen, worst-case thinking focuses only on the extreme but improbable risks and does a poor job at assessing outcomes."

An epidemic of worst-case thinking broke out in the United States in the aftermath of the Three Mile Island accident in 1979. A core meltdown in the nuclear power station there led to the release of radioactive gases. The Kemeny Commission Report, created by presidential order, concluded that "there will either be no case of cancer or the number of cases will be so small that it will never be possible to detect them," but the public was not convinced. As a result of the furor, no new nuclear power plants were built in the United States for 30 years. The coal- and oil-fueled plants that were built instead, however, surely caused far more harm than the meltdown at Three Mile Island, both directly via air pollution and indirectly by contributing to global warming.

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The impact of the Three Mile Island accident was probably reinforced by the release, 12 days before the meltdown, of The China Syndrome, a movie in which a catastrophic accident at a nuclear power plant is averted by the courageous actions of the protagonists. The movie's title is a direct reference to a worst-case scenario--the most dangerous kind of nuclear meltdown, where reactor components melt through their containment structures and into the underlying earth, "all the way to China."

The question of whether environmental impact statements should include discussion of worst-case scenarios is still the subject of intense debate. Environmental groups tend to advocate such discussion, in part to grab the attention of the general public. The U.S. government originally required discussion of worst-case scenarios but later changed its mind, apparently on the ground that such discussions tend to provoke overreactions. This is a move in the right direction; if the chance that the worst case will happen is extremely low, the benefits of considering it will be far outweighed by the unnecessary fear that such consideration would provoke. Like radiation, fear damages health and is costly to clear up.

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As Schneier observes, "Any fear that would make a good movie plot is amenable to worst-case thinking." With that in mind, he runs an annual "Movie-Plot Threat Contest." Entrants are invited to submit the most unlikely, yet still plausible, terrorist attack scenarios they can come up with. The purpose of this contest is "absurd humor," but Schneier hopes that it also makes a point. …