Global Risk Regulation Alberto Alemanno HEC Paris Global Risk - PowerPoint PPT Presentation

Commission Report While (a ban on the NiCd batteries) n could possibly yield substantial environmental and health benefits, estimation of the benefits is highly uncertain. n It cannot currently be demonstrated that the benefits of withdrawing the exemption would clearly outweigh the costs. n Only a comparative life-cycle assessment of the three main alternatives can lay the foundation for a sound impact assessment on the exemption and dispel the current uncertainty.

Commission Report n The Commission concludes that « at this juncture it is not appropriate to bring forward proposals to withdraw the exemption for cordless power tools from the ban on cadmium in batteries and accumulators. n Any proposal for legislation on this matter, based on an impact assessment in line with Commission policy, would require comparable technical and scientific information on the costs and benefits of cadmium and its substitutes in portable batteries and accumulators for CPTs .

A similar story RoHS Directive (Restriction of Hazardous Substances in electronic equipments)

Outcome n In the best case, this approach delays regulatory action n In the worst case, this approach leads to NO ACTION

(provisional) conclusions n EU impact assessment more quantitative than often thought n EU people already appear as numbers stacked in a column, points of a graph, equations, dose-response curves n Beyond moral concern, optimisation tools may have an inherent « anti-regulatory bias », and lead to « deregulation » in EU risk regulation

What is RISK ANALYSIS?

Risk Analysis as the Grundnorm n Originally conceived by US Nat’l Research Comm (Red Book 1984) as analytical methodology guiding decision-makers when adopting decisions about hazards to human health, welfare and environment: q RISK ASSESSMENT (I) q RISK MANAGEMENT (II) q RISK COMMUNICATION (III) n Very sensitive to define what is each of this step, what is not, and what is their relationships

n Fff

Which risk theory behind the red book? The responsability of those who exercise power in democratic society is not to reflect inflamed public feeling but to help form its understanding Felix Frankfurter Former Supreme Court Justice (1982), carved in stone on the wall of the Federal Court House, Boston

Trends in risk analysis decision making…….

From the RED BOOK to the ORANGE BOOK USA 1983 USA 1996

The Silver Book

Trends in decision making……. UK 1983 UK 1992

RA + RM RA / RM RISK ASSESSORS RISK ASSESSMENT RISK MANAGEMENT RISK RISK MANAGERS COMMUNICATION

RA + RM RA / RM RISK ASSESSORS RISK ASSESSMENT RISK MANAGEMENT RISK RISK MANAGERS COMMUNICATION

RA + RM RA / RM RISK ASSESSORS RISK ASSESSORS PP PP PP PP RISK ASSESSMENT RISK MANAGEMENT RISK RISK RISK MANAGERS RISK MANAGERS COMMUNICATION COMMUNICATION

Risk Assessment (I) n Risk assessment is the process of quantifying the probability of a harmful effect to individuals or populations from certain human activities. n a methodology aimed at ensuring scientic rationality n In secondary law: sectoral legislation

n US: AFL-CIO v. American Petroleum Institute (448 US 607 (1980)) – benzene case q Risk assessment mandatory for all US agencies involved in health regulation n EU: Pfizer judgment (2003) q Risk assessment mandatory for all US agencies involved in health regulation

RA: Who-When-How-By Whom n Introduction of risk assessment duty at primary level (CASE LAW and/or LEGISLATION but its execution left to secondary law: who-when-how-by whom (food safety, chemicals, water protection, etc) n These risk regulations developed through time and did not necessarily share same risk analysis model n Sectoral approach, however

Who conducts RA? n The scientists (not the decision-makers) n Lack of a common approach to RA n Lack of a common source of advice: q US Agencies / EU Agencies q Scientific committees (Non-food committees still in COMM’s walls) q Outsourced

The 4 steps of RA n Hazard identification (Qualitative) n Dose-Response assessment n Exposure assessment n Risk characterisation : q Treshold, RfD, etc

The 4 steps of RA n Hazard identification (Qualitative): q Is the agent capable of eliciting an adverse reaction (at some dose)? n Dose-Response assessment & Exposure assessment (Quantitative): q How does the degree of exposure to substance X affect the incidence of impact Y? SLIDE q What is the expected magnitude or probability of the adverse reaction at different doses? q Dose response function: linear, treshold and hormesis Ø Epidemiology (past human exposure, but variability) Ø Toxicology (lab tests on animals, i.e. rats, mice), BUT extrapolations n Risk characterisation : Treshold, RfD, etc

Dose-Response function n Dose-response assessment is the process of characterizing the relation between the dose of an agent administered or received, and the incidence of an adverse health effect in exposed populations, and estimating the incidence of the effect as a function of human exposure to the agent.

A dose response curve A dose-response curve defines the relationship between dose and response based on the following assumptions: 1) response increases as dose increases 2) there is a threshold dose - a dose below which there is no effect.

Bottom line All substances are poisons: there is none which is not a poison. The right dose differentiates a poison and a remedy Paracelsus (1493-1541) Medieval physician, botanist, alchemist, astrologer, and general occultist

A dose response curve

What if diverging scientific opinions?

The limits of risk assessment n Regulations mandating RA assume that RA will lead to a 100% answer, but : n Incomplete information (i.e. we have not & cannot test all substances and their possible interactions) n Indirect information (lack of epidemiological studies and reliance on animal studies through extrapolation) q Quid when animals (mice and rats) react differently? q Extrapolation from data points at high doses to the low levels relevant to the regulations of risk to humans

The limits of risk assessment n Use of defaults and assumptions to proceed in RA when uncertainty: Weigh-of-evidence; i.e. if animal exposure does not show adverse effects does this imply safety for humans? à Uncertainty is pervasive in RA

Conclusion : n Evidence has no meaning except in relation to a specific hypothesis >> hence, need to lay out reasoning & basis for inference in final RA

Risk Management (II) n The process of trasforming the outcome of RA into clearly defined appropriate control decisions, by weighing policy options n In so doing, need to take into account: q Degree of risk deemed acceptable for society q Outcome of RA q Other (non-scientific) factors ?

Ref. Baruch Fischhoff, Risk Analysis (1995), 15(2), 137-145.

Definition of Acceptable Risk (ALOP) A ¡ risk ¡ could ¡ be ¡ defined ¡ as ¡ ‘acceptable’ ¡ if ¡ it ¡ is ¡ defined ¡as ¡such ¡because: ¡ ¡ v it ¡falls ¡below ¡an ¡arbitrary ¡defined ¡probability; ¡ v it ¡falls ¡below ¡some ¡level ¡that ¡is ¡already ¡tolerated; ¡ v it ¡falls ¡below ¡an ¡arbitrary ¡defined ¡a=ributable ¡frac>on ¡of ¡ total ¡disease ¡burden ¡in ¡the ¡community; ¡ v the ¡cost ¡of ¡reducing ¡the ¡risk ¡would ¡far ¡exceed ¡the ¡costs ¡ saved; ¡ v independent ¡experts ¡say ¡it ¡is ¡acceptable; ¡ ¡ v the ¡ general ¡ public ¡ or ¡ poli>cians ¡ say ¡ it ¡ is ¡ acceptable ¡ (or ¡ more ¡likely, ¡do ¡not ¡say ¡it ¡is ¡not). ¡ ¡

Other non-scientific factors (OLF) n European approach: q « scientific legitimacy is not a sufficient basis for the exercise of public authority » q the scientists have « neither democratic legitimacy nor political responsability » n Scientific knowledge is authoritative but not esclusively so n Codification of « Societal, economic, traditional, ethical and environmental factors » n This philosophy already underpinned the ban on the use of hormones-growth back in the ’80s

The EU RM principles n Once recognised the multidimensional nature of RM: q Precautionary principle q Principe of Proportionality q Consistency precept Gradually identified as guidance principles for the risk managers when facing risk regulatory issues

PP n « in so far as there are uncertainties in the present state of scientific research with regard to the harmfulness of food additives, it is for the Member States, in the absence of full harmonization, to decide what degree of protection of the health and life of humans they intend to assure, having regard for the requirements of the free movement of goods within the Community » Sandoz, Debus, etc. 1980s

What is scientific uncertainty? Crucial to define it as it trigger the use of PP n Conflicting scientific result? Or Situations of ignorance? n The former is genuine uncertainty: there exist studies but unable to determine direct casual link btw substance & adverse effect n « where there is uncertainty as to the existence or extent of risks to human health » n Because « of the insufficiency, inconclusiveness or imprecision of the results of studies conducted » n Not on « hypothetical considerations » n ECJ: sufficiently reliable scientific data, cogent information, and solid and convincing evidence about negative effect à THE PP PARADOX

PP vs CBA n No attention to costs n Bias against new risk vs actual risk n Bias against salient vs non salient risks n No guidance to decision-maker: how to weigh the alternative courses of action? n No help in risk vs risk trade offs (absestos) n Stricter regulation may breach PP as it leads to new (unknown) risks (BPA?) n Paralyzing principle favouring a zero-risk society

The principle of proportionality n Not conceived as RM tool, rather control mechanism over MS measures’ legality n Suitable to the decalred purpose n The least onerous method n Disadvantages caused not disproportionated to the aims pursued CFI « cost-benefit analysis is a particular expression of proportionality in RM »

Volcanic ash cloud - Eyjafjallajokul

The Volcanic Ash Crisis What happened and lessons learned Alberto Alemanno | HEC Paris

Structure of the presentation n What happened: q Basic facts q Hazard identification q Regulatory action q Questions raised n Lessons learned n What ’ s next

Volcanic ash cloud - Eyjafjallajokul

What happened?

April 14, 2010: start of explosive phase of the eruption of Eyjafjallajökull

April 15: explosive eruption continues, ash cloud reaches mainland Europe à closure of airspace over UK, Scandinavia and Nth EU.

April 16: a pulsating eruptive column reached above 8 kilometres: 11,659/28,597 flights

April 17: 5,335 actual flights vs 22,653

Sunday 18 April, Spanish Presidency and Eurocontrol propose a co-ordinated European approach

April 20: PHASE OUT OF THE

April 21: back to normal

Some numbers n Airspace of 23 countries involved n 300 airports (75% of EU air traffic) n 100 000 flights cancelled n 10 million passengers affected n Significant economic losses

Questions (end of April) n Who took the risk management decisions, i.e. fly bans? n Who assessed the hazard, i.e.volcanic ash to jet airliners? n Who established safety level, i.e. zero ash? à Some answers ASIL – Insights

Appropriate risk management or overeaction?

Perceived risks or actual risk?