Risk-cost trade-offs in environmental risk management decision-making

Abstract

Abstract Risk-cost trade-offs are deemed to provide a basis for selecting between those risk reductions which are economic and those which are non-economic. Insufficient work has been done in environmental risk management decision-making practice to validate this assumption, or to develop an analytical framework within which it may be employed. Empirical evidence from the literature is offered for the existence of risk-cost trade-offs and the relationship of risk-cost trade-offs to the benefits side of the management decision-making issue is discussed. The risk-cost trade-off curve alone does not provide a complete basis for selecting between economic and non-economic risk-cost combinations. When combined with information on the willingness-to-pay for risk reductions, the risk-cost trade-off curve may be used to distinguish between risk reduction possibilities in a risk management decision-making context. Results allow for a more developed theoretical decision- making framework that, when amended for uncertainty, produces decision criteria useful for environmental risk management decision-making.