SUMMARY FOR POLICYMAKERS

Global change: A fresh approach to new risks

Global risk potentials and their interplay with economic, social and ecological processes of change have emerged as a novel challenge to the international community. Never before has human intervention in nature assumed global dimensions. By presenting this report, the Council hopes to contribute constructively to an effective, efficient and objective management of the risks of global change. The approach taken by the Council is to identify a taxonomy of globally relevant risks and highlight the particularly relevant classes of risk, link both established and innovative risk assessment strategies and corresponding risk management tools to these classes, in order to define management priorities. By an objective approach the Council means the urgent necessity to face real hazards – with all the associated uncertainties and ambiguities – in a manner that is targeted, rational and efficient, while at the same time exploiting the opportunities associated with taking risks.

Localizing risks in normal, transitional and prohibited areas

In its previous reports, each focusing on a specific domain of global change, the Council has identified 'guard rails' for these domains that cannot be crossed without incurring excessive damage to humanity and the environment. The present report identifies such guard rails for the domain of global risks, too. Where activities constitute a risk, the guard rails are extended to form a boundary zone – a critical zone. If a risk falls in the boundary zone, then particular care and special precautions need to be taken.

Risks in the normal area
Risks in the normal area have the following characteristics:

in total, a small catastrophic potential,
in total, low to medium probability of occurrence,
low to medium uncertainty about both the probability of occurrence and the associated magnitude of damage,
low uncertainties regarding the probability distribution of damage,
low statistical confidence intervals with respect to probability and magnitude of damage,
low levels of persistency and ubiquity (scope in time and space),
high reversibility of potential damage, and

low potential for social conflict and mobilization.

Risks in the transitional area
The situation becomes more problematic when risks touch areas that significantly transcend everyday levels. The transitional area is reached if one ormore of the following conditions are met:

the damage potential is high,
the probability of occurrence is high,
the uncertainty of the probability distribution of adverse effects is high,
the confidence intervals of probability and magnitude of damage are large,
persistency, ubiquity and irreversibility are particularly high, whereby there must be reasonable grounds to assume a causal link between trigger and effects, and
for reasons of perceived distributional injustice or other social and psychological factors, a major potential for conflict or mobilization is to be expected (migration, refusal, protest, resistance).

Risks in the prohibited area

If the high level of risk is further joined by a low benefit, or if the product of the two components of risk assumes extreme levels, then the risk is situated in the prohibited area. This area is easy to handle. In the prohibited area, the consequences to be expected from taking a risk are so severe that risk reduction is unconditional. In extreme cases, the proper response here is an immediate moratorium or ban.

Categorization according to risk classes

The Council is convinced that there is no simple recipe for assessing risks. In view of divergent preferences and states of development worldwide, risks must be viewed as heterogeneous phenomena that preclude standardized assessment and handling. At the same time, however, risk policy would be overburdened if it were to develop and employ a special strategy for the assessment of the risk of each individual activity. The Council views a categorization of the various risks in 6 risk classes (see boxes) to be expedient, in a manner similar to that already commonly applied today in the assessment of toxicological risks. Categorization in these risk classes is guided above all by the basic concern to develop class-specific procedures and management rules that permit handling risks in a way appropriate to the individual risk and commensurate to the need for risk containment.

These 6 classes of risk call for specific strategies. The goal of the specific strategies for the risk classes identified here is to shift these from the prohibited or transitional area into the normal area (Section 4). The aim is thus not to reduce risks down to zero, but to a level that permits routine management.

Prime recommendations for action

Extending strict liability

Limited knowledge of the consequences of today's actions for the future and the associated assessment problems, in conjunction with limited capacity to control complex economic and social systems, hamper a stringent formulation of 'guard rails' and targeted direction of systems. Sustainability is thus not so much a definable target than rather a charge upon the people living today to develop rules and regulations that point the production of knowledge in a direction guided by long-term perspectives. Furthermore, through timely revelation of the negative implications of today's activities, these rules and regulations should make it possible to trigger rapid societal adaptation reactions in terms of risk reduction. Sustainable societies must thus be continuously innovating and learning systems equipped with incentive arrangements for risk reduction.

The Council therefore accords great importance not only to creating new knowledge, but also to mobilizing the potentials of problem-solving competence which are available decentrally within society but unknown to any central agency. This is above all a matter of revealing previously unidentified risks and promoting the innovation of new, less risky lines of technological development. Because an assessment of risk consequences is not possible, or only to a limited extent, appropriate incentives should be provided for the production and mobilization of knowledge. In addition to promoting basic research, this further entails guaranteeing room for maneuver, and thus also assigning clearly defined property and utilization rights. The door can thus be opened to diverse searching processes, taking place on the market under competitive conditions, which are able to reveal errors and avoid mistakes in time. An important element in such processes is the enforcement of the liability principle, which, due to its preventive effect, can contribute to precluding damage. As the Council has repeatedly stressed, the preventive side of liability is the main aspect. This preventive effect is enhanced if the risks in question are insurable. The insurance companies will then set up expert groups to assess these risks and will arrive at premiums reflecting their assessments. This will in turn lead to the acceleration of risk-reducing knowledge production – for insurer and insured alike will conduct risk research in their own best interests in order to avoid faulty assessments and in order to limit losses and reduce the probability of these losses occurring.

Where risks are found to be uninsurable, this might well have the effect that the risk-generating activity is discontinued. If that is not in the interest of the state, liability must be limited.

International mechanism for risk detection and assessment

Knowledge thus holds the key to risk management – but the key must also be used. Worldwide, this use has in the past been completely inadequate. Various factors have been responsible for this inadequacy: insufficient integration of specialist knowledge, asymmetrical access to knowledge, ineffective structures of knowledge transfer and so forth. The Council therefore recommends that a (UN) Risk Assessment Panel should be established. The essential functions of this Panel should be similar to those of the Intergovernmental Panel on Climate Change (IPCC), but the task of the (UN) Risk Assessment Panel would be less to analyze already detected risks, and more the timely and integrated detection of novel risks of global import that are only just beginning to become visible.

The (UN) Risk Assessment Panel should not conduct research of its own, but should underpin and stimulate existing relevant research structures, condense their findings and – after a comprehensive international scientific assessment process – present these to policy-makers in a purposeful form. The main aim would be to establish a network node in which various national risk identification and assessment processes come together, are collated and coordinated. Thus, under the aegis of this Panel, certain tasks or functions could partially be delegated to already existing international organizations or institutions. Such a Panel would not involve founding a new international organization, but would make use of the capacities and competencies of existing bodies.

The (UN) Risk Assessment Panel should moreover serve as a – scientifically substantiated – interface between non-state actors (environmental and development organizations, industry federations) and the body politic, by permitting submissions of non-governmental organizations and scientifically examining and assessing these. A further important task of the Panel would be to inform both state and non-state actors (at all levels) about the state of knowledge of all environmental risks of international relevance.

Figure 1

Classes of risk and their location in the normal, transition and prohibited areas, characterized by the probability of occurence and the extent of damage.

Source: WBGU

Building effective capacities for dealing with risk

The above recommendations are geared to ensuring that environmental risks cannot arise in the first place, or are detected early on and assessed properly. However, these political measures will not lead by themselves to a complete prevention of global hazard potentials, nor to a total suppression of regionally damaging events. It remains essential to transpose knowledge into action and contingency measures. There is a lack of the necessary institutional and technical capacities. This already applies to many industrialized countries, and all the more to most developing countries. At the international level, we can only find first rudiments. The Council makes the following recommendations in this area:

• Enhancing national and international civil protection.

• Strengthening non-state actors, in particular NGOs.

• Promoting self-help potentials in developing countries.

Promoting risk awareness

If indispensable socio-economic opportunities are to be seized, then there is no risk-free path for a dynamically developing global community. In fact, a policy of risk aversion can be all the more hazardous over the long term, as avoiding known hazards can mean foregoing opportunities for later handling currently unknown risks. However, global change harbors risks with novel characteristics (e.g. the danger that ocean circulation patterns are changed) which concern practically everyone on the planet, albeit in most cases with a highly asymmetrical distribution of consequences, and whose potential effects can extend far into the future of humankind. This special quality of risk demands a new quality of risk responsibility such as can only be assumed by the 'risk-aware citizen'.

The risk-aware citizen

should be adequately informed about the current state of knowledge of global environmental risks,
should be involved to the greatest possible extent in really critical decisions on the acceptability of certain environmental risks, and
should continue to stand by the decisions taken with his or her involvement, even if these subsequently prove wrong.

Boxes of 6 risk classes

Risk class Damocles

In Greek myth, Damocles was once invited by his king to a banquet. However, he was obliged to take his meal under a razor-sharp sword hanging on a fine thread. For Damocles, opportunity and danger were closely linked, and the 'Sword of Damocles' has become a byword for a happy situation overshadowed by danger. The damage potential of the risk taken by Damocles was the highest possible, namely the loss of his life. On the other hand, the probability of occurrence was extremely low, for according to the myth the thread did not break. A prime characteristic of this class of risk is its combination of low probability with high magnitude of damage. Theoretically the damage can occur at any time, but due to the safety measures implemented this is scarcely to be expected.

Characterization

• Probability of occurrence is low (approaching 0)

• Certainty of assessment of probability of occurrence is high

• Extent of damage is high (approaching infinity)

• Certainty of assessment of extent of damage is high
Examples

• Nuclear energy

• Large-scale chemical facilities

• Large Dams

• Meteorite impacts

Strategies and tools
Reducing disaster potentials

• Research aimed at developing substitutes and reducing the disaster potential

• Technological measures for reducing the disaster potential

• Stringent liability regimes

• International safety standards authority

• Subsidization of alternatives that have equal utility

• Containment (minimizing the spread of damage)

• International coordination (e.g. to mitigate meteorite hazards)
Strengthening resilience

• Human-resource and institutional capacity building (licensing procedures, monitoring, training etc.)

• International liability commitments

• Expansion of technological procedures by which to improve resilience (redundancy, diversity etc.)

• Blueprint for resilient organizations

• Model role: licensing procedures

• International controls (IAEA)
Emergency management

• Human-resource and institutional capacity building (emergency prevention, preparedness and response)

• Education, training, empowerment

• Technological protective measures, including containment strategies

• International emergency groups (e.g. fire services, radiation protection etc.)

Risk class Cyclops

Ancient Greek mythology tells of mighty giants who, for all their strength, were disabled by having only one single, round eye, which was why they were called 'round eyes' or Cyclopes. With only one eye, only one side of reality can be perceived and perspective is lost. When viewing risk, only one side can be ascertained while the other remains uncertain. Here it is often the case that risks are greatly underestimated whose magnitude can be grasped but whose probability of occurrence is uncertain or continuously changes. A number of natural events such as volcanic eruptions, floods and El Niño belong in this category, as does the outbreak of pandemics wherever there is no information on their probability of occurrence or the information is contradictory.

Characterization

• probability of occurrence is unknown

• reliability of estimation of probability of occurrence is unknown

• extent of damage is high

• certainty of assessment of extent of damage tends to be high
Examples

• Earthquakes

• Volcanic eruptions

• AIDS infection

• Mass development of anthropogenically influenced species

• Nuclear early warning systems and NBC-weapons systems

Strategies and tools
Ascertaining the probability

• Research to ascertain numerical probability of occurrence

• International monitoring through

– National risk centers

– Institutional networking

– International Risk Assessment Panel

• Technological measures aimed at estimating probabilities
Preventing surprises

• Strict liability

• Compulsory insurance for risk generators

• Capacity building (licensing procedures, monitoring, training etc.)

• Technological measures

• International monitoring
Emergency management

• Human-resource and institutional capacity building (emergency prevention, preparedness and response)

• Education, training, empowerment

• Technological protective measures, including containment strategies

• International emergency groups (e.g. fire services, radiation protection etc.)

Risk class Pythia

When in doubt, the ancient Greeks consulted one of their oracles, among which the most famous was the Delphic Oracle with its blind seeress Pythia. Pythia intoxicated herself with gases, in order to make predictions and give advice for the future in a state of trance. However, Pythia's prophecies were ambiguous. They revealed that a major danger might be impending, but not how high its probability or severity might be, nor the distribution or type of harm. Thus this risk class refers to a risk for which the potential magnitude of damage is unknown and the probability of occurrence also can not be ascertained with any accuracy. This class includes risks associated with the possibility of sudden non-linear climatic changes, such as the risk of self-reinforcing global warming or of the instability of the West Antarctic ice sheet, with far more disastrous consequences than those of gradual climate change.

Characterization

• probability of occurrence is unknown

• certainty of assessment of probability of occurrence is unknown

• extent of damage is unknown (potentially high)

• certainty of assessment of extent of damage is unknown
Examples

• Self-reinforcing global warming

• Release and putting into circulation of transgenic plants

• BSE/nv-CJD infection

• Instability of the West Antarctic ice sheets

Strategies and tools
Improving precautions and mitigating effects

• Institutionalized, precautionary technical standards

• Fund solutions

• Mitigation (minimizing the spread of damage)

• International agreements on control, monitoring and safety measures

• Human-resource and institutional capacity building

• Technological measures aimed at enhancing resilience
Improving knowledge

• Research to ascertain probability of occurrence and extent of damage

• International early warning structure i.e. International Risk Assessment Panel

• State-sponsored (basic) research
Emergency management

• Containment strategies

• Human-resource and institutional capacity building

• Education, training, empowerment

• Technological protective measures

• International, rapidly deployable task forces (e.g. for decontamination)

Risk class Pandora

This risk class is characterized simultaneously by high ubiquity, persistency and irreversibility. Typical examples are persistent plant protectant residues and xenobiotics. The consequences of these risks are often still unknown or there are at best presumptions as to their possible adverse effects. The ancient Greeks explained many ills of their times with the myth of 'Pandora's Box', a box that, although brought down to the Earth by the beautiful Pandora, created by Zeus, only contained evils. As long as the evils remained in the box, no damage was to be feared. If, however, the box was opened, all of the evils contained in it were released to plague the Earth irreversibly, persistently and ubiquitously.

Characterization

• probability of occurrence is unknown

• certainty of assessment of probability of occurrence is unknown

• extent of damage is unknown (only assumptions)

• certainty of assessment of extent of damage is unknown

• persistence is high (several generations)

Examples

• Persistent organic pollutants (POPs)

• Endocrine disruptors

Strategies and tools

Developing substitutes

• Research aimed at developing substitutes

• Technological measures aimed at disseminating and enforcing substitutes

• Promotion of basic research

• Subsidization of alternatives that have equal utility
Enforcing restrictions upon substance quantities and dispersal, through to outright bans

• Regulatory limitation of quantities, through environmental standards or incentive schemes (certificates)

• Strict liability, where appropriate

• Improving and extending retention/containment technologies

• Command-and-control limit values and bans

• Capacity building (technological know-how, technology transfer, training)

• Joint Implementation

Emergency management

• Human-resource and institutional capacity building (emergency prevention)

• Technological protective measures, including containment strategies

• Education, training, empowerment

Risk class Cassandra

Many types of damage occur with high probability, but in such a remote future that for the time being no one is willing to acknowledge the threat. This was the problem of Cassandra, a seeress of the Trojans, who correctly predicted the danger of a Greek victory but was not taken seriously by her countrymen. The Cassandra class of risk thus harbors a paradox: both the probability of occurrence and the damage potential are known, but because the damage will not occur for a long period of time, there is little concern in the present. Cassandra-type risks often also display relatively high levels of ubiquity and persistency. They also entail allotting an inequitable share of the risk to future generations, thus violating the principle of sustainability. Above all, the belief that a remedy will be found before the actual damage occurs can be taken as an excuse for inactivity. We can find examples in both the medical and the geophysical or climate arenas.

Characterization

• probability of occurrence tends to be high

• certainty of assessment of probability of occurrence tends to be low

• extent of damage tends to be high

• certainty of assessment of extent of damage tends to be high

• long delay of consequences
Examples

• Gradual human-induced climate change

• Destabilization of terrestrial ecosystems

Strategies and tools
Strengthening long-term responsibility

• Voluntary commitments, codes of conduct of global actors

• Coupling participation, empowerment and the institutional bolstering of long-term strategies

• Remedying state failure

• Fund models

• International coordination
Steady reduction through substitutes and quantitative restrictions, through to outright bans

• Incentive schemes (certificates and levies)

• Strict liability, where appropriate

• Quantitative restrictions through environmental standards (also international)

• Improving and extending retention/containment technologies

• Human-resource and institutional capacity building (technological know-how, technology transfer, training)

• Joint Implementation
Contingency management

• Human-resource and institutional capacity building (ecosystem restoration, emergency prevention)

• Technological protective measures, including containment strategies

• Education, training, empowerment

Risk class Medusa

In classical mythology, Medusa was one of three cruel Gorgon sisters whose sight alone made people turn into stone. Some novel phenomena have an effect on modern people in a way similar to that in which the Gorgons, as purely imaginary figures of fable, aroused fear and terror. Some innovations are rejected even if scientists scarcely view them as dangerous. Such phenomena have a high potential for public mobilization, as did once the fear of the actually nonexistent Gorgon sisters. According to the best knowledge of the risk experts, risks of this type are located within the normal area, but, due to certain characteristics of the risk source, are a particular source of dread that leads to massive rejection (a criterion for mobilization). A good example of such mobilization is given by the concern over the carcinogenic effect of electromagnetic radiation in low concentrations.

Characterization

• probability of occurrence tends to be low

• certainty of assessment of probability of occurrence tends to be low

• extent of damage tends to be low (exposure high)

• certainty of assessment of extent of damage tends to be high

• mobilization potential is high
Examples

• Electromagnetic fields

Strategies and tools
Building confidence

• Establishing independent institutions for information and public education

• Improving opportunities for individuals to participate in decisions

• Promotion of social science research on mobilization potentials

• Model function: licensing procedures with participation rights of affected parties

• International controls

• International liability commitments
Improving knowledge

• Research aimed at improving the certainty of risk assessments

• State-sponsored (basic) research
Communicating risks

• Clear presentation of the cause-effect relationships between triggers and consequences

• Intensified environmental education in schools and in adult education

• Direct feedback of measured data to the public

IMPRESSUM

German Advisory Council on Global Change - WBGU
Secretariat
Reichpietschufer 60-62, 8. OG
D-10785 Berlin
phone: 030 263948 0
fax: 030 263948 50
Email: wbgu@wbgu.de
Website: http://www.wbgu.de

Translation: Christopher Hay, Darmstadt

Cover design Erich Kirchner, Heidelberg using the following illustrations: Satellite image of storm clouds, source: Pure Vision Photo Disc Deutschland GmbH; House destroyed by a hurricane, source: Pure Vision Photo Disc Deutschland GmbH; Woman with child, South Africa, source: Meinhard Schulz-Baldes; Storm surge, Bremerhaven, source: Meinhard Schulz-Baldes; Road sign in water, source: Meinhard Schulz-Baldes; Seedling, source: BMBF

The summary can be downloaded though the Internet from the website
http://www.wbgu.de/wbgu_jg1998_ultra_engl.html.

© 2001, WBGU (Reprint)