Cost-benefit analysis risk assessment

Risk Assessment, Requires cost/benefit analysis, risk assessment, vulnerable population impact assessment, and development of public information... 

To support the argument that the safety risk emerging from the system is ALARP, it is also necessary to demonstrate the practicability argument by carrying out a cost-benefit analysis to assess and compare the costs of any proposed changes to the system against the reduction in risk levels inclusive of the acceptance/rejection criteria. 

Process Hazards Analysis. Analysis of processes for unrecogni2ed or inadequately controUed ha2ards (see Hazard analysis and risk assessment) is required by OSHA (36). The principal methods of analysis, in an approximate ascending order of intensity, are what-if checklist failure modes and effects ha2ard and operabiHty (HAZOP) and fault-tree analysis. Other complementary methods include human error prediction and cost/benefit analysis. The HAZOP method is the most popular as of 1995 because it can be used to identify ha2ards, pinpoint their causes and consequences, and disclose the need for protective systems. Fault-tree analysis is the method to be used if a quantitative evaluation of operational safety is needed to justify the implementation of process improvements. 

Consider the consequences of possible errors for risk assessment or for cost-benefit analysis when considering alternative ERS. 

Qualitative findings of ecosystem risk assessments are of low utility for risk management. They cannot be compared with quantitative estimates of other risks this compromises the ability of risk ranking to provide insights to setting priorities. It is particularly difficult to convert them into a format applicable for cost-benefit analysis, which is a key tool that any proponent uses in decision-making on a proposed project. 

This paper will summarize briefly some work my colleagues and I at Decision Focus Incorporated have carried out for EPA to show how decision analysis might be used to assist decision making under TSCA ( 5). I will first briefly review the concepts of quantitative risk assessment and cost-benefit analysis to show how decision analysis fits with these concepts and provides a natural way of extending them. Then I will illustrate the approach using a case study on a specific chemical, perchloroethylene. 

One useful tool of risk assessment is to compare the risk before and after prevention or mitigation to determine the difference in risk. A cost benefit analysis can be completed that determines the cost of the mitigation versus the amount of risk reduction. All costs need to be calculated to determine a cost per year. These costs would include fire damage, injury or fatality, insurance cost increases, loss of profits, etc. The cost of the mitigation, including capital and maintenance costs, needs to be determined. 

In the fire risk assessment, it is important to reevaluate the risk once options for mitigation are determined. The amount of risk reduction should be calculated for each option or combination of options. Often, the results indicate that some options do not provide much, if any, risk reduction. The use of cost benefit analysis can help management in deciding which option to select. Facilities that depend exclusively on the local fire department for fire protection should complete a fire hazard analysis to determine the appropriate fire protection. 

Methodically devised and established methods (and criteria) of substance and process assessment and evaluation like risk analysis, toxicological and ecotoxi-cological analyses, life-cycle-analysis and cost-benefit analysis . But also much simpler approaches, which in practice play an important role for assessing formulations and snbstance properties (e.g. the nse of negative and/or positive lists). 

For food safety purposes the overriding aim is that food contamination should be reduced to the lowest practicable level, bearing in mind the potential costs and benefits involved. Since it is difficult to establish cause and effect relationships following long-term (chronic) exposure at low concentrations, it may be necessary to base action on prudence rather than on proven harm to health. However, if this approach is to maintain the confidence of both consumers and producers of food, a rational evaluation of all relevant information is required so that the balance between the risks and benefits of veterinary drugs can be assessed. Information on the incidence of potentially harmful drug residues is fundamental to this cost-benefit analysis so too is the consumption of the commodities involved (particularly for susceptible consumers or those consumers who eat more). Account must also be taken of the potential fall in food production if a drug is controlled or prohibited, and also the animal health and welfare implications that may result from the restriction of an animal medicine for which there may be no effective alternative. 

Frey HC, Mokhtari A, Danish T (2003) Evaluation of selected sensitivity analysis methods based upon applications to two food safety process risk models. Prepared by North Carolina State University for Office of Risk Assessment and Cost-Benefit Analysis, United States Department of Agriculture, Washington, DC (http //www.ce.ncsu.edu/risk/Phase2Final.pdf). 

Hence risk assessment criteria must be established so that there can be developed a national priority list of the hazardous sites that require remedial action. EPA has adopted the Mitre Model for assessing the risks and ranking waste sites. There is some criticism of this model, and there are a number of as yet unanswered questions about its application. Formal cost/benefit analysis will not be used, and risk assessment will be on a case-by-case basis. EPA will thus be developing its knowledge base and procedures as it carries out the program. 

The fourth core element, the maximin principle, is not implemented at all. On the contrary, there is a strong reliance in TSCA and in the implementation of the act on formal risk assessments and cost-benefit analysis, which more or less completely blocks complementary approaches, such as decision-making aiming at reducing the likelihood of the worst case becoming a reality. 

Ashford, N. (2007) The Legacy of the Precautionary Principle in US Law The Rise of Cost-Benefit Analysis and Risk Assessment as Undermining Factors in Health, Safety and Environmental Protection. In de Sadeleer, N. (ed.) Implementing the precautionary principle. Approaches from the Nordic Countries, EU and USA. London Earthscan. 

If risk assessment and analysis are frequently dealt with by insurance companies in the case of sudden risk, the extension of this type of analysis to gradual risk and to cost-benefit analysis of the regulations or norms to be adopted or enforced in environmental problems is a rather misleading procedure. 

Risk management is the decision-making process that follows the completion of a risk assessment. The risk assessment provides important information that supports decision-making and is integrated with other factors, including economic, feasibility, and cost-benefit analysis, in the risk management process. 

American Conference of Governmental Industrial Hygienists, role In formalizing risk assessments, 148 American regulatory agencies and cost-benefit analysis, 162 American Society for Testing... 

It is probably safe to say that the more people or interior area a building protection system saves from exposure to a release, the better the system is. It is not plausible to say unequivocally that the cheaper the system, the more desirable it is, or vice versa. For cost to be used as a criterion for evaluation, it has to be considered in terms of benefits received. This is known as cost-benefit analysis and is used frequently in the decision-making process by federal agencies (White House, 1992). A detailed discussion of cost and its role in risk assessment, risk management, and decision making can be found in Chapter 6. 

There is no best way to retire a system. Depending on the situation, the optimal way of retiring a system can be anything from "pulling out the plug of the old and plug in the new system" up to very complex and expensive activities. For each situation, the optimal solution must be chosen based on a risk assessment and a cost/benefit analysis. The benefit of easy access to a possibly rare chance of occurrence should be assessed. 

With respect to archiving, there is no one best solution for all systems and situations. For each system, a decision should be taken based on a risk assessment and a cost benefit analysis. There are three main options, each having different pros (+) and cons (-) ... 

CBA, cost-benefit analysis DMC, direct material consumption DMI. direct material input EF. ecological footprint EIA, environmental impact assessment EMS, environmental management system En. energy analysis lOA, input-output analysis LCA, lifecycle assessment LCC. life cycle costing MFA, material flow accounting MIPS material intensity per unit service RA, risk assessment SEA. strategic environmental assessment SEEA system of economic and environmental accounts SFA, substance flow analysis TMR. total material requirement. 

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