Irrational Economist_ Making Decisions in a Dangerous World - Erwann Michel-Kerjan [137]
The Bhopal disaster was the impetus for establishing, in 1985, the Wharton School’s Risk Management and Decision Processes Center, where Paul Kleindorfer and I served as co-directors. Its mission from the outset has been to study behavior by individuals, firms, and governments with respect to low-probability, high-consequence events so that more effective strategies can be prescribed for reducing losses from future disasters and aiding the recovery process.
Siting Liquified Natural Gas Terminals
From 1980 to 1982, I spent an extended sabbatical at the International Institute for Applied Systems Analysis (IIASA) outside of Vienna, Austria, focusing much of my attention on the challenges involved in siting liquefied natural gas (LNG) facilities in four countries (Germany, the Netherlands, the United Kingdom, and the United States). During this time I worked closely with John Lathrop, Joanne Linnerooth-Bayer, and Michael Thompson, among other researchers. In particular, we studied the process that each country utilized in finding a home for these technological facilities and analyzed how it dealt with the possibilities of a catastrophic accident, such as a storage tank rupture resulting in an LNG spill. The LNG produces a vapor cloud that could ignite and cause property damage as well as a significant number of injuries and fatalities.
A principal finding from this study was that one cannot zero-in on a specific number to characterize the likelihood of an LNG explosion, even though this aim was the initial impetus for funding the study by the German government. Rather, we concluded that experts are prone to disagree on the likelihood and resulting consequences of an accident, and that it is difficult to reconcile these differences given scientific uncertainty. Each of the key interested parties is thus able to justify its estimates of the risk by finding its favorite guru to defend its positions.
Finding a Home for the High-Level Radioactive Waste Repository
The LNG study at IIASA was a forerunner to a large-scale study on the siting of the high-level nuclear waste (HLNW) facility at Yucca Mountain in Nevada that spanned the fourteen-year period from 1986 to 2000 and involved social scientists from many disciplines such as anthropology, economics, geography, psychology, and sociology. The Nevada study provided an opportunity for a group of us—namely, Doug Easterling, Jim Flynn, Roger Kasperson, Paul Slovic, and me—to focus on issues of equity and social amplification of risk as important components for dealing with siting problems and other lp-hc events.
One incident stands out in my mind as I reflect on the challenges involved in siting an HLNW repository where the nuclear waste would be buried for 10,000 years. During a focus group we conducted in Las Vegas to ascertain citizens’ attitudes toward the repository, one woman commented, “I’m not concerned as much about myself as I am about my great-great-great-grandchildren.” The focus group discussion then concentrated on the role of future generations in siting the repository, leading us to include several questions on this aspect in our survey of public perceptions toward the facility. We found that “concern with future generations” was one of the most important