Toward a Definition of Environmental Risk Management

By Tusa, Wayne | Risk Management, December 1994 | Go to article overview

Toward a Definition of Environmental Risk Management


Tusa, Wayne, Risk Management


* Risk managers who can communicate a consistent definition of environmental risk management throughout their organizations should find it easier to achieve consensus on environmental issues.

RISK MANAGERS ARE being increasingly delegated responsibility for managing environmental risks. However, the task is not so simple or straightforward. The greatest difficulty is that there is no clear-cut definition of environmental risk management.

Risk management typically refers to a process by which the potential risks associated with a particular set of activities are systematically assessed and minimized. In the environmental arena, this process involves the identification of potential health and/or environmental impacts associated with a specific activity and the assessment of alternatives to reduce the risks (including anticipated costs and expected levels of risk reduction). The alternative that most cost-effectively reduces the potential risks is then selected and implemented.

If consistently applied, such an approach should result in the maximum reduction of risk at least cost. However, the term "environmental risk management" means different things to different audiences, including scientists, engineers, politicians, regulators, attorneys, insurers and the general public. As a result, risk managers often receive no clear direction relating to their responsibilities in implementing environmental risk management programs.

Inconsistent Regulations

ENVIRONMENTAL LAWS and regulations should be based on good science and the consistent application of risk management principles. This, however, has often not been the case. For example, the risk assessment methodologies used to assess health risks and establish the relative need for and scope of the regulations in each of the major federal environmental programs in the United States are substantially different. Similarly, the risk management approaches embodied in each of these programs are significantly different -- in some cases, regulatory standards are based on available technology, in others on reducing risks cost-effectively and in others on minimizing risks without regard to cost.

As a consequence, the costs associated with reducing risks under some regulatory programs are dramatically higher than the costs associated with reducing equivalent levels of risk under other programs. If health risks were assessed consistently and similar risk management approaches used in all federal environmental programs, available funding would probably be allocated very differently. For example, it is likely that site cleanup programs under the Resource Conservation and Recovery Act (RCRA) and Superfund would be reduced in scope (since relatively few individuals are exposed, and at generally low risk levels), while indoor air and radon programs would receive more funding (since greater numbers of individuals are affected at potentially higher risk levels). Regulatory inconsistency often forces risk managers to justify allocating financial resources to programs that pose no or relatively low levels of risk.

Risk Assessment Science

MANAGING ENVIRONMENTAL risks requires a comprehensive understanding of the potential health and environmental impacts associated with the activities in question. For example, predicting the possible health impact to workers potentially exposed to the chemicals to be used in a new manufacturing process is not a simple process. It requires comprehensive knowledge relating to the potential exposure mechanisms, the magnitude and duration of any likely exposures and the toxicological effects associated with any such exposures.

Unfortunately, in many cases the scientific data needed to complete such analyses are incomplete, so risk assessors must make assumptions about this missing data. Since the goal of most risk assessments is to protect public health, most risk assessors use conservative assumptions when data are lacking.

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