Environmental Decisions in the Face of Uncertainty (2013) / Chapter Skim
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5 Incorporating Uncertainty into Decision Making
5 Incorporating Uncertainty into Decision Making
Pages 147-180
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From page 147... ...
Both Science and Decisions and the framework it suggests emphasize the need to do a better job of linking the assessment of health risks to the particular problem that EPA is facing and also emphasize the importance of stakeholder involvement in each stage. In this chapter this committee begins by building on that three-phase framework, incorporating into that framework uncertainty in the three factors (health risk estimates, technology availability, and economics)
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From page 148... ...
• If existing conditions appear to necessary to characterize the human health risks, technology, and • Given the decision context, how should pose a threat to human health, what economics that should be assessed for the proposed regulatory options? the three factors (human health risk, options exist for altering those technological, and economic factors)
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From page 149... ...
framework, the report then discusses different approaches to handling un Figure 5-1b. certainty inConsiderations for each assessment during Phase 2factors and describes ways health, technological, and economic that stakeholder engagement may be encouraged.1 INCORPORATING UNCERTAINTY INTO A DECISION-MAKING FRAMEWORK Problem Formulation The need for EPA to make a regulatory decision might arise from concerns about a potential environmental hazard, a legal requirement to review an existing or potential environmental regulation, or concerns following a specific event, such as an oil spill or the siting of a new source of pollution.
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From page 150... ...
This committee agrees with the earlier report that planning for a risk assessment and anticipating issues in advance are key to conducting useful and high-quality assessments (such as assessments of human health risks, cost–benefit assessments, and assessments of technology availability) , and the committee further emphasizes the importance of identifying uncertainties that affect the decision and determining how those uncertainties should be assessed and considered in the decision-making process.
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. The planning of assessments should include not only assessments of health risks and benefits, but also assessments of the other factors that might be considered in a decision, in particular, technological and economic factors.
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When considering how to analyze uncertainties, the type and complexity of the uncertainty analyses that are appropriate will depend on, among other things, the context of the decision (for example, if it is made in an emergency situation, the level of controversy and scientific disagreement around the decision, and whether the decision would be easily reversible) , the nature of the risks and benefits (for example, if the human health risks involve minor adverse events, complex quantitative uncertainty analyses might not be warranted, whereas if they involve a fatal, nonreversible disease, such analyses might be warranted)
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; health risk analysis, including extreme value analysis; and scenario analysis, depending on the type or nature of the uncertainty. If technological availability -- such as the best available or best practicable technology -- can be considered (second column, Table 5-1)
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c The goal of assessing model and parameter uncertainty is to estimate (with uncertainty) the effect of model choice and parameter values on assessments of health risks, technological factors, and the cost–benefit tradeoffs of different regulatory options.
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, the goal or purpose of the assessment approach is fundamentally different; scenarios of various adverse outcomes should be described, and an assessment should be made as to whether a proposed solution can eliminate the risks of those outcomes occurring. When accounting for uncertainty in a regulatory decision, each analysis or approach is associated with a set of decision rules that identify the "best" regulatory decision if the decision maker were to follow the recommendations resulting from the analysis.
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From page 156... ...
and for one or more regulatory options. Human health risk assessment is the tool that decision makers use to predict the degree of health improvement or protection expected from a decrease in one
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From page 157... ...
For the assessment phase, most previous NRC reports and EPA risk assessments have focused only on the assessment of health risks and their associated uncertainties. This committee, however, believes that the assessment phase should also include examinations of a number of nonhealth factors and their associated uncertainties.
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The result of this state of affairs is that the assessments of both health risks and other factors are fraught with uncertainties. To help determine which assessments should explicitly include an uncertainty analysis, it is useful to first conduct a rudimentary, deterministic assessment using basecase values.
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Another important aspect of stakeholder engagement during the management phase is communication of the decision and the estimated health risks, cost, and other consequences of the decision along with the uncertainty in those estimates. Communication is discussed further in Chapter 6.
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The social factors that can affect health risk estimates should have been identified at the problem-formulation stage and been analyzed during the assessment stage, and they should be presented to and considered by decision makers during this management phase of the decision-making process. For example, a small number of individuals living near a petroleum refinery (the so-called maximally exposed individuals, or MEIs)
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Potential Consequences of the Decision Decisions that are made once and not reassessed are riskier than decisions that are revisited on a frequent, recurring basis. The ease with which a decision can be reversed or revisited at a later date or the degree to which a given decision precludes or enables additional choices at a later date will affect how uncertainty in risk estimates, cost–benefit analyses, technology assessments, and other factors are considered in the decision.
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It is also helpful to present this information in a form that can assist decision making, such as by presenting probability distributions for health effects, examining extreme cases and tail probabilities, and incorporating these inputs into a more formal cost–benefit or decision analysis. Ultimately, decision makers have to make the decision in the face of uncertainty, a difficult job that involves weighing probabilities against consequences, protecting the average person as well as the most sensitive and exposed ones, and providing assurance that the regulatory action will be protective, even in the face of unlikely scenarios, model assumptions, and parameters.
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The various possible regulatory options are then compared in terms of the risks for both cases. When model and parameter uncertainty come into play, there is additional uncertainty about health risks.
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That still leaves the decision makers with the difficult task of selecting regulatory options in the face of huge variations in scenarios. Decision makers should be informed by extensive sensitivity analyses and should examine the marginal decrease in risk reduction as the level of effort increases.
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In this section we will focus on direct economic costs. Uncertainty analyses about direct costs can be used by decision makers in connection with uncertainty analysis about health risks and benefits to compare costs and benefits.
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for a discussion of the field of decision analysis in general. 4 Value-of-information analysis is referred to as expected value of information (EVI)
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. Thus, the expected value of perfect information is $200,000 ($700,000, the profit with optimal decisions including the information, minus $500,000, the profit from the optimal decision without such information)
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the expected losses; the losses are least when acting optimally with perfect information and greatest when uncertainty is ignored. A number of different measures of the value of information can be calculated, including the expected value of perfect information (EVPI)
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The resultant figure provides an upper bound on the value of building uncertainty into the analysis in the first place. The expected value of perfect information (EVPI)
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If any decision is changed for the better after some result, than the value of information is positive. If the costs of obtaining the information (either data-gathering research costs or costs from delaying a decision, as might be the case with some regulatory options)
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OTHER CONSIDERATIONS As discussed in Chapter 1, other factors in addition to human health risks, economic factors, and technology availability play an important role in many of EPA's decisions. Although not thought of as traditional uncertainties that can be quantified, there is uncertainty in those factors that should be considered in making and communicating about with EPA's decisions.
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From page 172... ...
In particular, these factors can add to the variability and heterogeneity in estimates of health risks and economic factors. If the formal approaches described above are used in these contexts, they must be disaggregated so that the impacts they have on special populations can be examined as well as the aggregate effects.
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From page 173... ...
For example, Arvai and Gregory (2003) used multiattribute utility analysis to evaluate different approaches to stakeholder involvement in a decision related to the cleanup of a contaminated site; one approach involved the presentation of scientific information, while the other involved the presentation of scientific information and "values-oriented information that seeks to improve the ability of nonexpert participants to make difficult trade-offs across a variety of technical and nontechnical concerns" (p.
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EPA has issued much guidance on public and stakeholder involvement in its programs and activities (EPA, 1998, 2003, 2011a) , and there are several regulations that contain public involvement procedures for specific EPA programs and activities.11 The EPA also issued an agency-wide public involvement policy (reissued periodically with updates)
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. As part of the framework, the report also suggests that stakeholder involvement should have time limits so as not to delay decision making and that there should be incentives so that participation is more balanced and includes impacted communities and less advantaged stakeholders (NRC, 2008)
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The resources required for such an engagement of stakeholders, however, must be weighed against the need for such actions, given the context of the decision, including consideration of the potential health risks, the costs associated with the potential regulatory options, and the magnitude, sources, and nature or type of the uncertainty associated with the decision. KEY FINDINGS • Incorporating uncertainty analysis into a systematic framework, such as a modified version of the decision framework in Science and Decisions (NRC, 2009)
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From page 177... ...
Safety or default factors developed using expert judgments can also be helpful. o ormal expert elicitation to assess technology availability, as F well as technology choice and risk analysis using expert judg ment, can be helpful in assessing technology factors.
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2003. Public involvement policy of the U.S.
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From page 179... ...
2004. Risk communication: A handbook for commu nicating environmental, safety, and health risks.
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1996. Exercises in hedging against extreme consequences of global change and the expected value of information.
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