Risk&Regulation Magazine of the ESRC Centre for Analysis of Risk and Regulation
Responses to Environmental Risk Risk-based regulation delivering for the environment Global Warming: Constructing Flood and Insurance Risks Talking point: Responses to Environmental Risk Environmental Crises and Disasters: Producing research that matters PLUS Meet the Regulator: Nuclear Safety Directorate Security and Regulation: Information, risk and financial crime Environmental risk from an industry perspective: Protecting the licence to operate
No 15 Summer 2008
Risk&Regulation, Summer 2008
Contents 3 CARREditorial Global threats and regulatory negotiations/solutions CARR Director Bridget Hutter discusses the challenge of identifying and negotiating regulatory sollutions in an age of global threats, contingencies and uncertainties
Meet the Regulator Nuclear Safety Directorate
We talk to Dr Mike Weightman about regulation of the nuclear industry in the UK by the Nuclear Directorate of the Health and Safety Executive
7 Risk&Regulation: CARR Review No 15 SUMMER 2008 Editor: Will Jennings Enquiries: Centre Administrator, ESRC Centre for Analysis of Risk and Regulation, The London School of Economics and Political Science, Houghton Street, London WC2A 2AE United Kingdom Tel: +44 (0)20 7955 6577 Fax: +44 (0)20 7955 6578 Website: www.lse.ac.uk/collections/CARR/ Email: firstname.lastname@example.org Published by: ESRC Centre for Analysis of Risk and Regulation, The London School of Economics and Political Science, Houghton Street, London WC2A 2AE Copyright in editorial matter and this collection as a whole: London School of Economics © 2007 Copyright in individual articles: p 4 © Health and Safety Executive, 2008 p 7 © Catherine Wright, 2008 p 9 © Mike Power, 2008 p 10 © Michael Huber, 2008 p 12 © Paul Johnson, Andy Gouldson, Merlin Hyman and Andy Stirling, 2008 p 15 © Neil Gunningham, 2008 p 16 © Arjen Boin, 2008 The Health and Safety Executive, Catherine Wright, Mike Power, Michael Huber, Paul Johnson, Andy Gouldson, Merlin Hyman, Andy Stirling, Neil Gunningham and Arjen Boin have asserted their moral rights. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, without the prior permission in writing of the publisher, nor be issued to the public or circulated in any form of binding or cover other than that in which it is published. The School seeks to ensure that people are treated equitably, regardless of age, disability, race, nationality, ethnic or national origin, gender, religion, sexual orientation or personal circumstances. The information in this magazine can be made available in alternative formats. Please contact the Communications and Publications Administrator Tel: +44 (0)20 7849 4635 Email: email@example.com
Risk-based regulation delivering for the environment
Catherine Wright, Head of Modern Regulation at the Environment Agency reflects upon its risk-based approach to environmental regulation
The latest news from CARR
9 CARREVENT Security and Regulation: Information, risk and financial crime Mike Power reviews the CARR panel debate on information security held as part of the ESRC Festival of Social Science
10 Global Warming: Constructing flood and insurance risks Michael Huber discusses the difficulties of conceptualizing and measuring flood and insurance risks
12 CARRFORUM Talking point: Responses to environmental risk
Paul Johnson, Andy Gouldson, Merlin Hyman and Andy Stirling discuss regulatory strategies for the reduction of carbon emissions as well as the risks of regulation, and the benefits or expected effects of target regimes
15 Environmental Risk from an Industry Perspective: Protecting the licence to operate Neil Gunningham considers how companies perceive and respond to environmental risk through the notion of a business’s ‘licence to operate’
16 Environmental Crises and Disasters: Producing research that matters Arjen Boinargues that failed responses to environmental risk have revealed the importance of understanding how states and societies manage catastrophic threats and events
18 CARRinprint and CARRBOOKS New publications by CARR members 19 CARRPeople CARR staff and their expertise
Design and Art Direction: LSE Design Unit Photography: CARR, LSE Photography, Corbis (p5), Reuters (p3) and FEMA (p17) Printed by: AquatintBSC Cover Image: Jocelyn Augustino/FEMA ISSN 1473-6004 Online ISSN: 1473-6012
Risk&Regulation is also published on CARR’s website. www.lse.ac.uk/resources/riskAndRegulationMagazine www.lse.ac.uk/collections/CARR/
Risk&Regulation, Summer 2008
and regulatory negotiations/solutions
CARR Director Bridget Hutter discusses the challenge of identifying and negotiating regulatory sollutions in an age of global threats, contingencies and uncertainties.
he global dimensions of risk figure large in this issue of Risk&Regulation, most particularly in relation to the management of environmental risks. There are contributions from academics, regulators and business and these demonstrate a striking level of agreement over many of the issues discussed. This may well be because environmental risks are one of the few topics where talk of regulation, even strict regulation, seems more acceptable than others, even amongst businesses. And the contributors to this issue give us interesting insights as to why this might be the case.
In Talking Point there is broad agreement about the need to regulate to reduce carbon emissions and also to maintain public support. The risks of not regulating are understood to be multiple. There are concerns that private businesses left to their own devices will only manage environmental risks where this contributes to the bottom-line. There are concerns about the detrimental impact of not regulating the environment and about public reaction if action is not taken. This latter point is crucially important. Many risk regulation studies have highlighted the critical role played by the social environment, within which businesses respond to risk management pressures. Where there is perceived to be strong public interest in the management of risks there is much more likely to be regulatory attention and a greater readiness on the part of businesses to comply or even go ‘beyond statutory compliance’. Indeed the power of social pressure often resides in non-governmental organizations and community groups. In the case of the environment these may be powerful at local, national and also transnational levels. Recognition that there are many complex reasons for business compliance with risk regulation demands is reflected in how the contributors believe environmental risk should be regulated. They advocate a mix of regulatory sources and methods, some state-based and some beyond the state; some incentive-based, others sanctions-based; some appealing to social responsibility and ethical arguments and some to self-interest and deterrence. While participants in the debate agree that environmental risks are global risks and that there is a division between developing and developed countries, there is not unanimity about whether there are global solutions. Whether or not the solutions to this global problem should be mandated across all countries is a point of controversy as are the bases upon which to make these decisions, and whether or not the specification of any targets should be fixed, incremental or differentiated. Risk-based approaches to regulating environmental and nuclear risks are one of the foundations upon which UK regulation is presently built. The Environment Agency sees this as a cornerstone of their modern approach to regulation. It may also be a means of satisfying the demands of the better regulation agenda upon them, as they can ‘reduce the burdens on business’ by decreasing the visits they make to low risk operators. Such an approach implicitly re-emphasizes that responsibility for risk
management lies with business and not regulators as it removes a major source of education for small businesses: much risk regulation research tells us about the reliance of this sector on regulatory guidance and advice and while they may not have the burden of an inspector visiting and demanding change they may need to seek out alternative, most probably commercial, sources of regulatory and risk management advice. Risk-based regulation carries its own risks and these are discussed by Michael Huber who analyses why some environmental problems may not be amenable to risk management approaches at all. There may, for example, be uncertainties about the cause of specific problems and the probability of risk events occurring. Moreover, the framing and definition of risk events is often shaped by managerial demands and practical and strategic decisions. The example used is a highly topical one, that of flooding. His discussion of the definition of floods with respect to insurance and also in different national contexts is a salutary account of the social and political shaping of risk anticipation and management in the public and private sectors. Prevention is of course a key aspect of environmental regulation but so is a preoccupation with how to respond when this fails. Arjen Boin discusses how the failures in the case of Hurricane Katrina underlined the urgent need for research upon which to design response systems in the wake of environmental disasters. The emphasis upon anticipating risk is also evident in the area of information security – a topic rendered especially topical by recent governmental data losses. Recently, a CARR event on this topic formed part of the ESRC Festival of Social Science and considered the new challenges governments and business face in achieving safety and security. The regulation of environmental risk is perhaps the foremost challenge of the twenty-first century and poses questions for regulators, business, publics and academics alike. With increasing social and political awareness of the implications of environmental change, and in the face of apocalyptic prophecies of disaster and catastrophe, the formulation and organization of risk regulation presents both state and society with a regulatory dilemma of a different scale and time frame.
Bridget Hutter CARR Director
Risk&Regulation, Summer 2008
Nuclear Safety Regulator Who regulates the UK nuclear industry?
We talk to Dr Mike Weightman about regulation of the nuclear industry in the UK by the Nuclear Directorate of the Health and Safety Executive.
he Health and Safety Executive (HSE)* is responsible for health and safety regulation in Great Britain, and enforces the relevant requirements in conjunction with local authorities.
HSE regulates the nuclear industry in the UK through its Nuclear Directorate (ND). ND’s mission is to ‘Protect People and Society from the Hazards of the Nuclear Industry. ND encompasses HM Nuclear Installations Inspectorate (NII), which is the nuclear safety regulator covering both civil and defence nuclear industries, and the Office for Civil Nuclear Security (OCNS), which is the nuclear security regulator for the UK’s civil nuclear industry. The move of OCNS and the UK Safeguards Office from the Department of Trade and Industry (now Department for Business Enterprise and Regulatory Reform, DBERR) to HSE in April 2007 gives a more integrated approach to nuclear safety and security regulation, and the oversight of accounting for nuclear material. ND works closely with the environment agencies – the Environment Agency covering England and Wales, and the Scottish Environment Protection Agency – which are responsible for regulating the emissions from sites and the disposal of radioactive waste. Additionally, ND works with the Dangerous Goods Division of the Department for Transport, which regulates the safe transport of radioactive materials. Why do we need the NII and how did it come about? In the 1950s, the UK started work on the design and construction of commercial nuclear power stations. The Queen opened the first of these, a Magnox reactor at Calder Hall in Cumbria, in October 1956. This was the world’s first nuclear reactor to produce electricity commercially. However, a year later, the nuclear industry met with a major setback when one of the military plutonium production piles at Windscale caught fire. The fire led to a significant offsite release of radioactivity and a consequent ban on milk consumption over a wide area This, together with pressure from the insurance industry to clarify responsibilities
following a nuclear accident, led directly to the 1959 Nuclear Installations Act. This Act paved the way for the formation of the Inspectorate of Nuclear Installations in 1960 (now the NII) as the independent licensing and enforcement authority. The 1959 Act was superseded by the 1965 Nuclear Installations Act to accommodate International third party insurance conventions and in 1974, those parts relevant to safety became a statutory provision of the Health and Safety at Work etc Act 1974 (HSWA). NII became part of HSE at the same time. (The insurance provisions are the responsibility of DBERR.) What is the scope of the activities that NII regulate? Our current areas of regulatory responsibility include operating civil nuclear power plants, nuclear fuel cycle facilities, decommissioning nuclear plant, radioactive waste management, nuclear research establishments, isotope manufacture, nuclear submarine maintenance facilities and the Atomic Weapons Research Establishment (AWE). How is the UK nuclear industry regulated? We use one of the most stringent and demanding systems of regulatory control, a nuclear site licensing process under the Nuclear Installations Act 1965. This reflects the unique aspects of the nuclear hazards that if realized could have major impacts not only on people but on various aspects of society such as the economy, international relations, use of land, etc., not only immediately but for many years after a major accident. And, of course, the public has substantial concerns about the safety of nuclear activities and radioactive waste. Other Health and Safety legislation is also used to regulate the industry specifically the Ionising Radiations Regulations 1999, to control routine exposure to ionising radiations, and the Radiation (Emergency Preparedness and Public Information) Regulations 2001, for, in particular, off site emergency arrangements. What are the NII’s powers? NII derives its licensing authority from the Nuclear Installations Act. This requires that all operators of nuclear installations must obtain a licence from HSE and allows HSE to attach such conditions, as it considers necessary in the interests of safety and radioactive waste management. These powers,
Risk&Regulation, Summer 2008
meet the regulator
to grant a licence or not and to attach conditions, are delegated to the holder of my post of HM Chief Inspector of Nuclear Installations. The conditions can be changed overnight if need be and have the force of law. Over the years, we have developed 36 standard conditions that together form a sound basis for good nuclear safety and radioactive waste management. They address, for example, issues such as operating rules and instructions, maintenance, safety justifications, periodic safety reviews, reporting and following up on events, training and qualification of staff, modification to plant and procedures, independent nuclear safety committees, emergency arrangements, organizational structures and quality assurance. Several are about the licensee having adequate arrangements to manage change which may have safety implications. The conditions set goals but do not prescribe how these goals are to be met. Therefore, each licensee can develop licence condition compliance arrangements that best suit its activities, whilst demonstrating that safety is being managed properly. Similarly, the arrangements may change as the facility progresses through its life from initial design to final decommissioning. Licensees’ compliance with the conditions and with its own compliance arrangements is mandatory. Whilst the system gives flexibility to licensees, it secures high standards in a wide spectrum of nuclear facilities without being prescriptive or requiring detailed rule making by the regulatory body. The conditions allow for interventions by NII, which can for example, approve arrangements or Consent to specific actions. Some conditions enable us to direct a licensee to carry out a specific action including shutting down a plant. Others require the licensee to obtain our permission before commencing an activity such as starting up a reactor after periodic maintenance. The licensing powers are supplemented by enforcement and investigation powers derived from the HSWA.
How do NII Inspectors set about their work? The licensing process largely determines the scope of NII inspectors’ work. This is broadly in four areas. The first is referred to as permissioning inspection and entails the assessment of licensees’ safety cases. A safety case is the totality of documented information and arguments developed by the licensee, which substantiates the safety of the facility, activity, operation or modification. It provides a written demonstration that relevant standards have been met and that risks have been reduced ‘so far as is reasonably practicable’ (SFAIRP). NII’s assessors, who are themselves inspectors and technical experts in specific fields, will sample the safety case to establish whether a licensee has demonstrated that it understands the hazards associated with its activities and how to control them adequately. The technical principles, which NII uses to judge safety cases, are set out in our Safety Assessment Principles for Nuclear Facilities (SAPs). The second area of work is compliance inspection and is mainly done on licensees’ premises. This entails inspection of licensees’ compliance with the licence conditions and their corresponding arrangements and, in particular, to ensure that operation remains within the boundaries of the safety case. Most of the routine site inspection is carried out by nominated inspectors who spend about 30 per cent of their time on site. Additionally, NII undertakes team inspections on particular topics, sometimes with specialists from other parts of HSE in order to share learning across high hazard sectors. These may be regular events, such as witnessing demonstration emergency exercizes, or special inspections on a selected aspect of safety. Third, we undertake the full spectrum of enforcement activity from giving advice to taking prosecutions and taking actions under the licence conditions. And fourth, we also seek to use our influence to further the improvement of nuclear safety and radioactive waste standards; this is particularly important for those areas, which are difficult to regulate, such as the safety culture of an organization and the leadership and vision provided by the Board of the licensee. Does the NII implement risk based regulation? Securing the reduction and appropriate management of risk is the cornerstone of our business. For many years, the NII has required nuclear licensees to carry out comprehensive risk analysis of their plants and operations. This has used both deterministic and,
more recently, probabilistic techniques. Since the late 1980s, a ‘probabilistic safety analysis’ (PSA) has been an integral part of safety cases for new plants. For older plants, NII required the licensees to submit PSAs as part of the first Periodic Safety Reviews (PSRs). NII does not itself carry out PSAs, but does have experts who assess the licensees’ work in this area. The outcome is used to assist in making regulatory decisions, determining intervention strategies and the focus of NIl’s work. Risk based (or more appropriately entitled ‘risk informed’) regulation does not necessarily just mean quantitative risk, qualitative assessment and inspectoral technical judgement are also important components for targeting work. But it doesn’t stop there. We have feedback loops – taking account of events at nuclear facilities in the UK and abroad, safety performance indicators, inspection and assessment findings etc., – into what we call a ‘regulatory review system’, to determine our intervention strategies, priorities and plans – where, when and how to best target our efforts. This system is strongly based on risk information. The government has recently announced its support for new nuclear power stations as part of the UK’s energy mix. How will this affect the work of the NII? As part of our input to the Energy Review, we proposed a new approach to licensing, undertaking a Generic Design Assessment (GDA) before considering granting a nuclear site licence for a specific site. Following the Energy Review, the government asked the UK’s Nuclear Regulators to implement this ‘pre-authorization’ system for reactor designs. NII, OCNS and the Environment Agency prepared joint guidance on how the regulation of new nuclear power plants could be dealt with using this system, and in particular, how GDA would be introduced, to allow design issues to be dealt with in advance of site-specific matters. Essentially, GDA follows a four-stage process, which enables a stepped approach to reducing regulatory uncertainty and resource build-up. It will take around three to four years to complete. Preliminary work is already underway on four possible candidate designs (look at our website to see the latest reports on this work). GDA would be followed by a formal site licence application that would centre on site-specific issues and those relating to the organization of the potential operator. How do you engage the public in NII’s work? Nuclear issues in the UK are becoming increasing high profile and transparency, openness and clear accountability are major aspects of earning public trust and building confidence in the nuclear regulatory system. As part of their work, NII inspectors participate regularly in Site Stakeholder Group / Local Liaison Committee meetings. Reports are issued to these
Risk&Regulation, Summer 2008
meet the regulator meetings as part of our commitment to making information about inspection and regulatory activities available to the public. Additionally, every quarter my report to the Nuclear Safety Advisory Committee, covering our regulation of the whole of the industry, is put into the public domain. We also produce public reports on major investigations and team inspections that we undertake. We have made enhanced public involvement a key feature of our new process of GDA. It facilitates public participation early on in the process by giving access to the vendors’ safety, security and environmental reports, without compromising commercial and security considerations. The public can view the designs via the vendors’ or HSE website or, for those with limited internet access, request a CD copy. To alert the public to this opportunity, advertizements were placed in national newspapers at the start of the process and all public libraries were sent information. We ensure that the designers of the new reactors answer any public comments or questions and we will take this dialogue into account in reporting our assessment conclusions. Of course we are not complacent and we recognize the need to do more, not least in making the information we put out much more reader-friendly, and to actively listen to feedback on the concerns people have. Does NII have international obligations? The Chernobyl accident in 1986 underlined the fact that nuclear safety can have international ramifications and countries must demonstrate that they are controlling their nuclear activities competently. Such demonstrations are helped by two international ‘incentive’ conventions: one on the safety of reactors and the second on the safety of Radioactive Waste and Spent Fuel Management. Both Conventions set out requirements and also subject ‘Contracting Countries’ to a peer review every three years. We oversee and lead the UK’s response to both conventions on behalf of the UK government.
The International Atomic Energy Agency (IAEA), a UN body, also carries out peer reviews on a country’s nuclear regulatory system. We have participated in and led such reviews which provide opportunities for learning about good practices, and in preparation for new build benefited from one ourselves. Additionally, for many years NII has been a major contributor to the work of the IAEA in setting worldwide nuclear safety standards, and that of the Organization for Economic Co-operation and Development (OECD) Nuclear Energy Agency (NEA), in developing good nuclear regulatory practice and undertaking joint nuclear safety research. More recently, the European Commission has been pressing for harmonizing of nuclear safety standards amongst member states and WENRA (Western European Nuclear Regulators Association), of which we are a member, has been carrying out a project among member states where each country’s standards were benchmarked against IAEA and each other’s standards. Lately, for nuclear new build, the regulators from major nuclear nations have been working together (under a Multi-national Design Evaluation Programme), to develop joint approaches to some of the issues in this area – for example, joint inspections of supply chains in other countries. What sort of measures do you have to ensure your independence from the industry and others? First, the way we are set up under the HSWA through the HSE as independent from government and industry. Second, through reporting on our work and decisions to the HSE in public meetings and in the reports we put into the public domain. Third, being transparent on the basis for our decisions, for example our Safety Assessment Principles, the Enforcement Management Model, and our business management system which requires each regulatory decision to be appropriately documented and well argued. (These are on our website.) Fourth, through responding to Parliamentary scrutiny under its various committees,
and through Ministers to Parliament. Lastly, and by no means least, by the values we aspire to work by, what we look for in the people we recruit, our training and development programmes, our peer review and management oversight procedures, and our core belief – that we serve the people of the UK in securing their protection and that of the wider society What are the major challenges confronting NII? A new build programme, an existing ageing fleet of existing reactors, a more active decommissioning programme together with its radioactive waste disposal issues, changes in the defence related sector, changes in society’s expectations, and the age profile of our inspectorate, all present a significant challenge to us and our capability. We are recruiting to replace those who retire as well as to carry out new areas of work. Achieving the resourcing we need, assimilation of new inspectors, moving the culture and the organization forward, all provide significant managerial challenges in a demanding but exciting environment. *As of 1 April 2008, the Health and Safety Commission (HSC) and HSE merged into a single unitary body now known as HSE. More information about the work of the Commission can be found on the HSE website, or via the Summer 2008 edition of Risk&Regulation. Dr Mike Weightman is the Director of ND and HM Chief Inspector of Nuclear Installations. Further information can be found at: www.hse.gov.uk/nuclear Enquiries can be emailed to: NDenquiries@hse.gsi.gov.uk
Risk&Regulation, Summer 2008
delivering for the environment
he world is becoming a more competitive place. As emerging economies stake their claims on the world’s natural resources and markets, the established economies need to remain competitive. Despite many successes in the UK, the future environmental challenge is huge.
Catherine Wright, Head of Modern Regulation at the Environment Agency reflects upon its riskbased approach to environmental regulation.
The EU has found that administrative burdens in the UK are the lowest in Europe and the Environment Agency is playing our part to keep it that way, while continuing to deliver for the environment. We want to achieve results for the environment and our modern, risk-based approach to regulation is key to encouraging the businesses we regulate to take a lead on their environmental performance. Few would argue that by the late 1990s, we were dealing with a complex raft of environmental legislation. The way that we regulate businesses has had to change and a risk-based perspective is at the heart of our Modern Regulation approach. We want to achieve results for the environment so we concentrate on the businesses that don’t perform well. We have cut the number of site visits to low-risk operators by 50 per cent in the last four years, representing around 60,000 visits. This allows to us spend time on the issues that matter to the public and the environment, like dealing with criminal activity. But the environment has not suffered. There are fewer releases of most air pollutants to the environment like sulphur dioxide, down by 50 per cent since 2000. Most of the sites we regulate are performing better, with over 50 per cent of companies regulated under Pollution Prevention and Control now achieving the highest performance rating under our Operator and Pollution Risk Appraisal scheme. Our risk-based approach is reducing the burden on business. By 2010, our actions will save businesses about £25 million per annum. We also plan to save £10 million a year through waste protocols for waste producers, £1 million a year for 23,000 low-risk water abstractors who no longer have to register with us and £2 million a year for businesses who get advice from our NetRegs website instead of consultants. We are cutting down on the paperwork that businesses need to fill in, making better use of online applications and reporting and processing permits more quickly. Waste permit holders are getting their permits in less than one-fifth of the time and with less than one-sixth of the paperwork compared to two years ago.
We have successfully introduced sector plans, which are drawn up in consultation with industry and set out the regulatory requirements for an entire industrial sector. They establish major objectives, performance indicators and improvement targets for environmental performance for the next five to fifteen years. Sector plans for the chemical, cement, nuclear, and waste sectors have already been published, helping the businesses within these sectors go beyond minimum levels of compliance. Modern regulation needs to help us tackle future environmental challenges. Measures to reduce greenhouse gases, adapt to climate change and using resources more wisely are economic opportunities. Between 2003 and 2006, 1.96 billion Euros (£1.33 billion) was invested in 300 clean energy companies and £3 billion of operating costs could be saved by UK business annually through waste minimization and water efficiency. The Stern Review of 2006 highlighted that action taken now to tackle climate change makes far more economic sense than action taken later. Our risk-based approach means we look for the best way to deliver results. As we deal with more complex environmental issues we are using a wide range of approaches to help manage environmental risk, from working with companies at Board level, EU Emissions Trading Schemes, partnership working to enable more waste to be re-used and re-cycled and working with water companies on the issues of water resource efficiency. In April 2008, the Regulators Compliance Code came into effect. The Code sets out standards for how regulators should work, based on the Hampton principles of better regulation. We welcome the Code and are fully committed to continuing our modernization programme to improve businesses’ experience of regulation. In the future, the environmental risks we face can only be managed by concerted effort from governments, business, regulators and consumers. Understanding the risks and how we manage them is key to ensuring the UK remains competitive in the face of the economic and environmental challenges of the future. Catherine Wright is Head of Modern Regulation at the Environment Agency, the leading public body for protecting and improving the environment in England and Wales.
Risk&Regulation, Summer Summer 2008 2008
CARRNEWS CARR IMPACT David Demortain gave a presentation in March at the Centre for Public Services Organizations at Royal Holloway on ‘Risk management and regulatory agencies: Demonstrating performance as a dimension of public organizations’. Jeanette Hofmann spoke on ’Politics in the Information Age’ at the Opening Panel of the BritishGerman Königswinter Conference, at New College, Oxford, in April. Bridget Hutter became a member of the Expert Panel for the National Consumer Council project ‘Rating Regulators’. She also gave a presentation at the Food Standards Agency in April on ‘world class regulation’. Will Jennings was quoted extensively in an article in Business Insurance, ‘Off-field risks top concern for Olympics’ in February. He presented a paper at the UK Political Studies Association Conference in Swansea, in April, entitled ‘Reconceiving political control of the bureaucracy in comparative perspective’.
NEW RESEARCH PROJECT Andrea Mennicken from CARR and Linda Soneryd from Stockholm Centre of Organizational Research (SCORE) were awarded a grant by the STINT foundation in Sweden for a three year joint project starting in October 2008 on ‘Risk Regulation, Markets and Democracy: Reorganizing Economy and Society in the 21st Century’.
Andrea Mennicken has taken over the editorship of the European Economic Sociology Newsletter. Michael Power was invited to be a member of the referees network for the newly formed Institute for Advanced Studies, Nantes, France. He also gave the San-Ei Gen Lecture at the University of Edinburgh in May.
ACADEMICS ABROAD David Demortain gave a talk at an international conference on expertise in Rennes, France, entitled ‘Are scientific experts a political elite? Elements drawn from the study of food and drug safety specialists’. Jeanette Hofmann presented a paper with Sebastian Botzem on ‘Transnational self-regulation in the shadow of hierarchy – A comparison between internet governance and standard setting in international accounting’ at the 2nd Annual Symposium of GigaNet (Global Internet Governance Network) in Rio de Janeiro, in November. She also participated in the Internet Governance Forum in Rio de Janeiro as member of the Advisory Group for the UN Secretary General. Bridget Hutter particpated in a Social Science Conference co-hosted by the British Academy as part of CO-REACH (Co-ordination of Research between the EU and China) and the Chinese Academy of Social Sciences held in Beijing in May. Martin Lodge spoke on ‘The OMC as a policy tool’ at the German Federal Ministry of Health Conference in Potsdam, in March. Andrea Mennicken presented a paper on ‘From inspection to auditing: Neo-liberalism, market creation and professionalization in Post-Soviet Russia’ in a research seminar at the Institute of Sociology, University of Bamberg, Germany, in November.
STAFF NEWS John Downer has been appointed as an ESRC Research Officer. John was educated at the universities of Edinburgh and Cambridge and recently received his doctorate from Cornell University, for a thesis entitled ‘The Burden of Proof: Regulating Ultra-High Reliability in Civil Aviation’. He is currently reworking this research for publication as a book about the theory and practice of establishing the risks of highly complex and potentially dangerous technologies. Carl Macrae has left CARR to pursue a career as a risk manager in the finance and banking industry. Nadia Mirza has joined CARR as Events and Office Administrator.
Michael Power delivered a plenary address ‘Organized uncertainty: designing a world of risk management’ at the Gothenburg Public Management Seminar 2007 on Risk and Leadership in November.
CARR VISITORS Michela Arnaboldi visited CARR between January and March. She is Associate Professor at Politecnico di Milano, Department of Management, Economics and Industrial Engineering and currently studying the relation between risk management and control systems, and its impact on processes and power within organizations. Neil Gunningham began a six month visit in April. Professor Gunningham is an interdisciplinary social scientist and lawyer who specializes in safety, health and environmental regulation and governance. He currently holds Professorial Research appointments in the Regulatory Institutions Network, Research School of Social Sciences, and in the School of Resources, Environment and Society, at the ANU. Nick Sitter visited CARR in November. Professor Sitter is Professor of Political Economy in the Department of Public Governance at the Norwegian School of Management in Oslo. His research areas include comparative European party politics, public policy and regulation and competition in the European Union.
Have you moved or changed jobs recently? Please keep us informed of any changes in your contact details so you can continue receiving Risk&Regulation. Email: firstname.lastname@example.org or Tel: +44 (0)20 7955 6577
Risk&Regulation, Summer 2008
Security and Regulation
Information, risk and financial crime
Mike Power reviews the CARR panel debate on information security held as part of the ESRC Festival of Social Science.
ublic concsciousness and concern in the UK about information security and financial crime seems to be at an all time high. Each new media disclosure of data loss by a government agency fuels a new sense of vulnerability focused on indentity theft and the risks to citizens of having their confidential details stored in portable databases. Add to this both the ongoing debate about identity cards and a central DNA database – intensified by high profile murder trials in 2008 – and the capacity of television drama to provide fictional realizations of a security dystopia, then the UK contemporary focus on information security resembles something akin to ‘moral panic’. At CARR we view these specific issues via a broad and generic concern with the ways in which they are registered and processed in regulatory systems and how, in turn, these systems are designed to use private sources of control and self-regulation in complex networks of mutual dependency and reliance. Perhaps nowhere is this public-private regulatory partnership more developed than in the field of financial regulation and, specifically, in the operational risk agenda established by Basel 2, which has created a new kind of gateway of exchange between the internal control and risk management systems of financial organizations and public regulatory objectives. Information security and financial crime issues have been progressively drawn into that operational risk management, both directly in terms of responsibilities for reporting on potential moneylaundering and also indirectly via management responsibility for systems and controls. In this way, internal control and risk management systems are being re-scripted around national security objectives. Accordingly, compliance officers and legal specialists now operate at a new ‘front line’ in the fight against crime. Yet despite the intense focus on information security, it remains a complex and fragmented field which presents considerable challenges for regulatory and security agencies. Today, seemingly mundane and routine matters, such as corporate policies over laptop use by employees, have acquired far reaching implications for public perceptions of risk and vulnerability.
In March 2008 CARR hosted a panel debate to discuss these issues as part of the ESRC Festival of Social Science held at the Royal United Services Institute for Defence and Security Studies . Elizabeth Robertson, a partner with Addleshaw Goddard, opened the discussion by outlining how organized crime was a risk concentration for the financial sector and described the implications of this for information management and sharing across agencies. Jim Backhouse from the Systems and Innovation group at LSE , drew attention to the evolution of practice from ‘computer security’ to ‘data security’ to information assurance. This shift is not well understood by citizens who associate security with zero-risk. He also argued for a stronger focus on citizen-based, rather than organization-based, risk management options in relation to identity theft. However, stronger forms of authentication brought their own risks, not least by incentivising more sophisticated forms of criminality. Mike Levi from the Crime and Justice Research group at Cardiff University made a similar point about how some security successes, such as chip and pin, have only served to displace criminal activity into other areas – something which complicates any cost-benefit analysis. He supported risk assessment initiatives in the field of security but argued for more sensitivity to the specificity of different security issues. For example, data loss as such was not assessable as a risk without greater knowledge of the take-up and exploitation of such data. The final speaker was JP Rangaswami, Managing Director of Service Design, BT Design, who reminded the audience of the increased atomization, as we
have moved from backend databases in mainframes to laptops, and virtualization of information systems. These developments provide significant challenges to how we think about regulation. The unit of action and intervention is now of necessity the individual rather than the firm. He argued that we must accept the reality that employee laptops mix private and corporate uses and that virtual social networking has become normalized. Instead of imposing strict controls and bans in these areas, organizations need to increase capacities for transparency in usage with the development of greater self-responsibility. Experiments in this direction have proved to be very successful. Rangaswami also challenged the audience to explore the identity theft issue in a new, perhaps non-western, way by thinking of identity in a more ‘disposable’ and flexible ways. The challenges for any sensible and costeffective regulation in this field are considerable and it is clear that the innovative thinking about information security will come from below at the organizational level. Practices which work with the grain of contemporary trends in personal habits are likely to be much more successful than outright prohibitions and elaborate corporate policies which only increase the legalization and bureaucratization of organizational life. Mike Power, Research Theme Director, CARR.
10 Risk&Regulation, Summer 2008
Constructing flood and insurance risks Michael Huber discusses the difficulties of conceptualizing and measuring flood and insurance risks.
arious facets of global warming can be described in terms of risk. The media claim global warming puts penguins and polar bears at risk, that it causes flood or storm risks and challenges firms that might risk climate-related law suits. Nonetheless, it is debatable if risk provides a feasible concept for the management of global warming. The applicability of the risk concept is restricted by global warming being not a single event, but a bundle of partially unknown and unknowable effects that only through considerable efforts, eg complex simulation models, can be linked to the actual cause, rising carbon dioxide emissions. Even if comparing IPCC-scenarios over time unveils a steep learning curve, the difficulties remain in attributing accurate probabilities to events and damage costs. Apart from the unknowable effects challenging the attribution of probabilities, the fact that global warming undeniably causes disruption and damage is also a source of uncertainty. The same disruptive event may be beneficial for some and disadvantageous for others – and so reveal itself as a major source of irresolvable conflicts. Bjorn Lomborg’s praised book about the state of the world’s environment, The Sceptical Environmentalist, was fiercely criticized and challenged in court as it failed to recognize that the attribution of current costs and benefits defines a political battleground about future distributions rather than establishing a long-term consensus. These conflicts are amplified by the impossibility of tracing the effects back to individual decisions and therefore it is equally impossible to hold people, organizations or countries liable for their climate-related decisions. Although responding to environmental risk has never been a straightforward affair, managing global warming brings extraordinary difficulties to the forefront of risk management. From the 1970s to early 1990s, environmental problems were judged a preventable burden to the economy. As a result, efforts at curbing environmental effects were considered a luxury and restricted in scope. The emergence of global warming altered this narrow view in at least three ways. First, environmentally friendly solutions
could be perceived as economically advantageous. Second, since the late 1980s environmental problems have been conceptualized as risks. Third and most importantly, the political toolbox of command-andcontrol regulations seemed too limited to ensure long-term success. For example, in the search for environmentally and economically sustainable solutions insurance was identified as a solution i.e. environmental problems were cast as insurance risks. The political advantage was that insurance could price unwanted effects and thus send a clear message to organizations and individuals about the ranking of risks. This would take the political heat out of the issue. However, there are two limitations to this approach. First, relying on insurance gives an adaptive solution while political communication by and large favours preventive strategies. Second, just as in skiing insurance one can only insure against injury and medical costs but not against skiing itself, similarly one cannot buy insurance coverage against global warming but only for compensation for some of the devastating and unknown effects it might have on properties, lives or other valuable activities. Although insurance firms have been active in the context of natural hazards for decades, their solutions cover only a limited area of environmental risk management. Thus, insurance does not substitute for politics, but provides an additional policy tool. Global warming, however, is doubly problematic for insurance. With the rising frequency of natural hazards, risk predictions tend to become less accurate and consequently, assessments of insurability less reliable. Costs are thus difficult to assess and the growing fear of adverse selection impedes coverage. Insurance firms are therefore inclined to exclude the coverage of natural hazards just as the need for insurance is growing with the urgency of environmental risks. Hence, the pressure on insurance firms for coverage is growing at a time when political actors are inexperienced about the economic and social demands to better contain the disastrous effects of natural hazards.
‘Our understanding of floods depends largely on what happens after the event. In the legal context, floods are defined by three compensation indicators that vary greatly’
Insurance risk management is not only problematic where insurance firms can manage only some features of global warming, but it where it has been used to define the actual subject, global warming. Insurance will shape the risk of global warming in a particular way, a hypothesis I described below in the example of flooding. When actors refer to floods, it is assumed that the event is well defined. But is it? Historically, floods were perceived as divine punishment. In Noah and the Ark, God flooded the entire globe as punishment for wickedness. Modern science neutralized this divine model and conceived flood as natural events without immediate significance, intent, meaning or plan. Floods are now considered to be caused by natural cycles of rainfall patterns, tides or random events. The scientific narrative decoupled the event from intentional interventions which make floods somewhat pointless as such a definition lacks usability in a political or economic context. The common ground of all flood definitions is best explained by the Concise Oxford Dictionary as ‘an overflowing or influx of water beyond the normal confines esp. over land’. Floods therefore mean ‘too much water’. But for insurance purposes, floods are significant events only when they can be linked to unintended and measurable, mainly negative, effects. The yearly flood of the Nile is a flood, but not for insurance because its effects are generally benign. For insurance purposes relevant floods are usually damaging, unwanted with an uncertain, irregular frequency. To manage floods, insurance policies transform the natural event of ‘too much water’ into a man-made disaster. The definition of floods is then qualified through institutional constraints, legal obligations and liabilities, references to political frameworks and to indicators of societal vulnerability. These criteria vary over time and across space. Let me demonstrate a few of them. As flooding triggers emergency aid, compensation and liability claims, it has not only to be defined unequivocally but also in such a way that organizations and institutions are able to decide when they should intervene and when they should restrain themselves. For example, the US Federal Emergency Management Agency (FEMA) specified ‘floods’ with the example of the worst controllable accident that needs to be avoided:
Risk&Regulation, Summer 2008 11
‘A dam failure is usually the result of neglect, poor design, or structural damage caused by a major event such as an earthquake. When a dam fails, a gigantic quantity of water is suddenly let loose downstream, destroying anything in its path.’ ‘Too much water’ is connected with a technical breakdown and a flood can therefore be blamed on maintenance or regulations and end up in court or in the political arena. Then the main risk is not flooding, but the failure to prepare against dam failure. Similarly, the UK Environment Agency defined flooding as ‘inundation by river or sea water whether caused by inadequate or slow drainage or by breaches or overtopping of banks and defences’. The insufficient protective measures burdened regulatory actors with the responsibility of managing flood, not as a natural hazard but as a socio-technical event. Controlling protective measures such as the construction of dams, landuse and the required robustness of assets become the focus of flood-risk management. If it is not private firms, as in the British example, but public actors that predominantly manage flood risks; they have similar strategies, but develop a different set of criteria. In a summary report of a Franco-German action-plan for flood protection from the mid-1990s, floods were linked to the growing urbanization, settlements on flood plains and interferences with the watercourse and water balance. Flood was qualified by the vulnerability of social systems and by protective measures, not by the exposure of individual assets and adaptation. The influence of insurance on flood definitions does not stop here. Our understanding of floods depends largely on what happens after the event. In the legal context, floods are defined by three compensation indicators that vary greatly. For example, the Belgium government defined a flood as causing at least £930,000 of damage which implies that the average amount per family must be at least £4,000 and by the affirmation that a similar disaster will occur only every 20 years. Quite differently in the US, a flood is defined as water damage to two or more neighbouring properties. Compared to the British definition where floods ought to happen only once every 70 years or to the Netherlands where flood protection allows for such events to occur only once every 200 years, the Belgian flood frequency sets a low standard for flood protection and a low threshold for compensation.
H o w e v e r, not only is a flood shaped according to managerial needs, but also the concept of risk itself is up for practical adaptations. Commonly, risk comprises two elements, the probability of the occurrence of an event and the damage inflicted by this same event. In a publication of the Association of British Insurers, risk is substituted by a risk triangle linking hazard, a combination of the frequency and severity of an event, with vulnerability, indicating the extent to which an asset is affected by the hazard, and exposure as measure of the extent to which an singular asset is exposed to hazard. These two supplementary notions of vulnerability and exposure transform floods into an insurable risk as they focus on insurable property. However, they do so only in an institutional setting dominated by private insurers. The Franco-German report did not define flood risk in terms of individual assets but rather as a collective problem within a limited geographical or political constituency. The threat is now specified by ecological functionality and original land-use as policy makers aimed at setting acceptable risk levels applicable to all residents in a certain area. Global warming is a risk that consists of several risk events. Focusing on one of them, I showed how the risk concept is adapted to managerial needs and how practical solutions shape this risk and its management. Applying the experiences from flooding, we can hypothesize that the choice of managerial strategies to curb the effects of global warming will define the political weight of events, of who ought to be protected and within what time horizon the problem may be conceived as hazardous. For example, choosing insurance
implied that disastrous effects on property are ranked higher on the political agenda than for example, losses in biodiversity or economic consequences for poorer groups in society. Public policies will usually transform global warming into a collective good problem and focus on social inequalities, while insurance focuses on private coverage. This generates not only different weights and ambiguous rankings, but the need to equilibrate those differences. Risk becomes not only a regulatory, but also (or even mainly) a communicative tool. Due to the variations of definitions sketched above, we hardly know what we mean when we talk about flood except for ‘too much water’. The flood example taught us how the path dependency chosen at an early stage shapes the political and managerial manoeuvrability of risk management for a long period. Against the general impression that risk unifies and from a critical perspective normalizes the management of a certain group of events as it provides a common managerial language, my brief analysis show that it rather veils the managerial intent and sets an opaque path dependency that once established is difficult to disclose and challenge. Thus responding to global warming in terms of risks may add to confusion and uncertainties rather that contribute to feasible solutions. Michael Huber, Institute of Science and Technology Studies and Faculty of Sociology at the University of Bielefeld (Germany) and CARR Research Associate email@example.com
12 Risk&Regulation, Summer Summer 2008 2008
Talking point Responses to Environmental Risk
Paul Johnson, Andy Gouldson, Merlin Hyman and Andy Stirling discuss regulatory strategies for the reduction of carbon emissions as well as the potential risks of regulation, and the benefits or expected effects of target regimes. Are reductions in carbon emissions best achieved through direct regulation or through competition and innovation? Paul Johnson (PJ): The answer is, rather boringly, that you need to use the whole range of instruments to achieve carbon reductions. It is obviously important to use the price mechanism, as we do to some extent through the EU Emissions Trading Scheme, so that users are internalizing the external cost created by emissions. But that need not of itself have the required effect. And we know that in two important senses it won’t. First, there is likely to be a need for support of technology which the market of its own volition, even with price incentives, won’t necessarily bring forth. By far the most important technology here is Carbon Capture and Storage. Second, for a range of reasons, consumers are not terribly price sensitive when it comes to using energy and simply raising the price by the external cost of carbon will not reduce emissions to acceptable levels. In this case regulation, for example of product standards or design standards for new homes, is likely actually to be the most efficient instrument available. Andy Gouldson (AG): Most evaluations tend to show that changes in behaviour are best secured when the range of imperatives, incentives and capacities that stem from governments and markets coincide and become self-reinforcing. Certainly, climate policy involves much more than just direct regulation – in the UK for example the climate change levy interacts with sectoral climate change agreements, and these exist alongside emissions trading and all sorts of awareness raising and capacity building measures. However, these instruments are far from being fully coordinated and
there is much to be done to introduce innovation friendly combinations of policy instruments. Merlin Hyman (MH): In a market economy innovation and technological development take place in order to exploit market demand. As Professor Stern sets out in great detail the market fails to capture the huge costs of pollution and it therefore takes action by governments – acting as society’s representatives – to create a demand for reduction in emissions. That can be achieved by a number of tools of which direct regulation in one and the use of fiscal measures to create a carbon price is another. The idea of a global carbon price sending signals through all purchasing decisions is every environmental economists dream and the EU Emissions Trading Scheme is the most ambitious attempt to move towards this approach. However, there are many areas where a more traditional regulatory approach will be required. For example, any realistic carbon price is likely to have little impact on energy efficiency in new homes – however, the government mandate for zero carbon homes has had a dramatic impact on the house-building and construction industry. So regulation and innovation are not alternatives, competition to produce solutions to carbon emissions will only take place once a demand has been created by government regulation/fiscal policy. Andy Stirling (AS): An obvious initial observation is that these are not mutually exclusive. Innovation can be driven by challenges exerted by regulation as much as those from competition. This doesn’t deny that there are tensions. Rather than a general choice between regulation or competition, though, the real potential for positive (or negative) outcomes
Risk&Regulation, Risk&Regulation, Summer Summer 2008 2008 13 13
CARRFORUM rests in very specific features of interactions between the two. These concern particular instruments, technologies and practices in specific contexts. There is no escaping ‘devils in details’. A further problem with this simple dichotomy is that it is incomplete. Innovation achieved through conventional competition or regulation alone, is typically too path-dependent and incremental for global challenges like climate change, inequality, insecurity and environmental degradation. As a complement, then, we need a third governance strategy – focusing on deliberate initiatives for radical system-level change. This includes more ‘joined up’ policy for ‘technological transitions’ (building entirely new trajectories from selected successful niches). It also involves concerted action in domains like public investment, taxation, infrastructure design, government procurement, education, popular culture and civil society. This means moving away from set-piece technical debates over regulation, to more pervasive, visionary and overtly political discourses over possible futures. What are the risks of environmental regulation? What are the risks of not regulating? PJ: The biggest risks here are about getting regulations, or other policies, wrong in the sense that they impose greater costs than are necessary or than consumers are willing to bear. Professor Nick Stern showed in his review [the Stern Report] that carbon emissions can be reduced at modest cost to the global economy if something approaching an optimal policy is followed. If not the costs can rise rather fast and public support for action will dissipate. Not regulating, even with price incentives, is likely to leave economically efficient abatement possibilities not being taken advantage of. AG: Most debates tend to focus on the risks of restricting growth or undermining competitiveness, but there is also an argument that if designed and delivered in the right way innovation friendly regulations can enhance competitiveness. The competitive implications of regulation can be reduced if most of a country’s competitors adopt similar standards – which is a major benefit of the EU, and a major impetus for global agreements on climate change. Classically, the risks of not regulating are that public goods are underprovided and that common property resources are over-exploited. Leaving it to the market with no protection against free riding means that only those changes that have private rather than social benefits are likely to be explored. MH: After decades of environmental regulation, each one introduced in the teeth of scaremongering on the costs by vested interests, I have yet to see
a single piece of research that shows that any environmental regulation has had a significant impact on economic competitiveness. The reality is that (1) the costs are imposed by such regulation are small (2) environmental regulation stimulates efficiency savings, waste reduction and innovation and therefore has positive economic impacts and (3) environmental regulations stimulate the development of an environmental technology and services sector – one of the great economic opportunities of the twenty-first century. Clearly, that regulation should be designed to have maximum impact at least in cost in red tape and be outcome focused to give companies the opportunity to respond as best suits their business. The risks of not regulating are spelt out in numerous scientific reports – devastation of vulnerable communities and a threat to the viability of human life on earth. AS: All markets are inevitably structured by vested interests and institutional attitudes and by existing distributions of resources, property and information. The idea that ‘not regulating’ somehow yields transcendently optimal outcomes is therefore misguided. The risk here is ‘business as usual’. Yet – though markets are poor masters – they can be powerful servants. If regulation reduces to monolithic central planning then it also risks reinforcing incumbents and lock-in. Working with the grain of market dynamics can inject vital diversity, vigour and rigour. Questions over regulatory risks thus concern not whether, but how, markets are shaped by society. The key lies in recognizing that technology – and innovation more generally – are not as homogenous as conventional undifferentiated policy language suggests. Both hold the crucial quality of direction. This encompasses many contending orientations for carbon reductions (including emissions capture, atmospheric fixing, nuclear power, centralized renewables, distributed energy, transforming infrastructures or reorganizing energy services). Limited resources, time and political attention mean that we cannot equally pursue all strategies. Ironically, ‘no alternatives’ or ‘do everything’ rhetorics on climate change both risk (in different ways) simply reproducing existing industrial prejudices. The real risks are therefore not just over how much to regulate, but that different kinds of regulation foster alternative directions of innovation. The biggest risk of all is that we forget the role of democracy in choosing which direction. What are the benefits to business of reducing carbon emissions? PJ: Businesses are unsurprisingly focused on profit though some are increasingly seeing reducing emissions as part of their marketing and corporate social responsibility strategies. The
latter is only possible because of the high public salience attached to the issue and is one of the important by-products of keeping the issue in the public eye and gaining public support for policies to counteract climate change. Public support can be lost if policy is not well designed. In addition, reducing carbon emissions is in many cases the same thing as reducing energy use which itself saves money. It is interesting that there does seem to be a need to for some external stimulus to persuade business to do that, but that is not to say that regulation to force business to do it will be costless. AG: Obviously there could be massive benefits relating to reducing the risks and impacts of climate change. But there may also be some private benefits – for example through improvements in energy efficiency and improvements in levels of social acceptance of and trust in business. MH: Carbon emissions result from the use of energy. Energy has a cost which is rapidly rising. Reducing emissions bring rapid improvements direct to the bottom line. As regulation/fiscal policy tackles carbon emissions this cost is odds on to continue rising. More broadly, customer-facing businesses, such as the retail sector, can gain market share by being in tune with their customers and reducing emissions. These companies will increasingly pass on their requirements to their supply chain creating an incentive for further companies to reduce their emissions. AS: This is a curious question. Business interests cannot be detached from – still less opposed to – those of wider society. Despite insulating institutions like property rights, limited liability and insurance, business is still a part of the world. Averting potentially catastrophic climate change is therefore also a business agenda. This aside, experience across different industries shows repeatedly how environmental drivers can serve to promote efficiency and competitiveness. In the event that global markets evolve on a low-carbon path, then early experience and leadership can yield additional commercial benefits. Do mandates to reduce emissions stimulate innovation? What are the consequences of leaving this to unregulated competition? PJ: Forcing industries to find ways to reduce emissions can stimulate some innovation. This has been seen in the motor manufacturing sector and in some areas of renewables. Because some important innovation has high up front costs and uncertain returns, and learning curves especially in energy can be quite long, unregulated competition even with price incentives will not always do the
14 Risk&Regulation, Summer 2008
CARRFORUM trick. But note, mandating incorrectly – and there is at least debate over, for example, the value of mandating use of a certain amount of biofuels or indeed over the EU renewables obligation – can be very expensive indeed. We should not be looking for innovation at all costs. AG: Under some conditions they can do – but the conditions are not always met by any means. The better regulation debate is very much focused on finding ways to secure social objectives whilst minimizing business burdens – and this is leading to more and more thinking on innovation friendly forms of policy. Also, the emergence of debates on non-state governance suggests that market or civic actors can also play a role in regulating production and consumption and in enhancing the prospects for technological and behavioural change. There is a growing range of voluntary initiatives designed to promote more climate friendly forms of production and consumption. Many of these are in their infancy though and it’s not yet possible to tell whether or how much and for how long and under what conditions they might work. MH: As set out above government regulation/fiscal policy is required to create market demand for emissions reduction that will stimulate innovation. However, the way that action is taken is key to stimulating innovation. A key feature of ‘innovation friendly’ policy is to focus on outcomes rather than prescribing the path to get there – allowing the market to find the best solutions. Policy also needs to be ambitious to create sufficient market demand and long term to provide an attractive proposition to investors. The phrase ‘loud, long and legal’ is sometimes used to set out the key characteristics of a successful policy framework to stimulate environmental innovation. Another concept increasingly being promoted is that of government action to create ‘lead markets’ where businesses can use niche markets to scale up environmental technologies and gain economies of scale to compete in mass markets. An example of this was the Californian mandate for a certain percentage of vehicle fleets to be zero emission. AS: I argue above that emission reduction can stimulate many different kinds of innovation. Without regulation in the widest sense, there is little prospect of achieving any radical shifts in direction. Should all countries be mandated? What different factors should emission targets take into account? PJ: As a global problem one clearly needs as a global a solution as possible to climate change. Greenhouse gases emitted in the UK do exactly the same damage as gases emitted in India or Australia. But there is not likely ever to be a mechanism which mandates all countries. We are likely to need a mixture of global agreements and trading systems and, importantly, significant flows of money to the developing world.
Targets for different countries should be very different. We in the UK will need at least 60 per cent reductions in emissions by 2050 as part of a global effort. Developing countries need targets that allow some increase over that period taking account of their space for growth and catch up. For the UK itself we will need a flexible system of targets which allows some adjustment for what others are doing. What is clear is that there is no value in having aggressive targets if no other country does. AG: Not necessarily – there is an argument that a global agreement would be much easier to reach, and would perhaps be much fairer, if obligations to reduce emissions were focused on the relatively small number of countries that have long been industrialized. Also, if obligations were based on consumption rather than production, it is likely that countries like the UK would have a much bigger carbon footprint while countries like China or India would have a much smaller one. Attributing climate impacts in this way might suggest a different allocation of the burdens for emissions reductions. MH: It is unarguable that the developed world is largely responsible for climate change and, therefore, has responsibility for leading the fight to reduce emissions. It is equally clear that a global deal that does not restrict emissions from China and India will be meaningless. The developed world must, therefore, take on the lion’s share of emission reduction, but all countries will have to accept limits. Furthermore, to help developing nations improve the living standards of their populations whilst limiting emissions the developed world must help by providing efficient low-polluting technologies. AS: There is no country where properly implemented carbon abatement measures in particular areas cannot realize wider benefits. Target-driven policies are thus applicable everywhere in some form. The qualifications lie in priorities, capacities, resources and opportunity costs – and the availability of international co-ordination, verification and support. Mandates should therefore take into account present capabilities. Since these are partly built on past economic activity, associated historic emissions are also relevant. Responsibilities should be established on a per capita basis – to avoid unfairly penalizing large poor countries. National targets should also include carbon consumption embodied in imported goods and services. Without this, powerful rich countries will simply export their responsibilities. The driving aim should be one of global equity in cumulative carbon emissions. This is not just about justice, but also practical efficacy. Building new trajectories is highly uncertain, with a need for potentially costly experiments and failures. This way, burdens are concentrated on those economies most deserving and able to bear them.
What are the expected global effects of local emission targets? PJ: Local targets will, individually, have almost no global effect as a result of locally reduced emissions. The UK is responsible for only 2 per cent of emissions and even if we meet the most stringent of targets can have only infinitesimal effects of global warming. Targets are valuable both as a way of signalling to others that we are doing something, and therefore encouraging wider action, and to provide some certainty to domestic investors and consumers. But we should never lose sight of the fact that this is a global problem and anything we do needs to be seen in that context. AG: They’re not yet clear – it seems plausible that in many contexts emissions reductions of say 20 per cent can be reached through incremental changes and through the adoption of technologies that already exist. But it really isn’t clear yet whether targets for emissions reductions of 60 per cent or more can be accommodated within existing systems and structures or whether more radical changes will be needed. Many people would suggest the latter is more likely. MH: If the question is whether it is worth setting targets without a global agreement then the answer is someone needs to take a lead and show what can be done – without economic damage – to encourage others. If the question is, what will be the effects of tackling climate change across the globe, then it’s clear that a rapid re-engineering of our economy will be required. Within that there will be winners and losers. Those who can predict which are advized to visit their stockbroker. AS: Finding new pathways for human progress is not a mechanical matter, governed by additive arithmetic. It is about nurturing exponential shifts in cultural discourse, social networks, market structures and technological trajectories. Because these are all fundamentally non-linear processes, apparently minor interventions at critical junctures can be disproportionate in their dynamic effects. This is why there remains a crucial global role for national policy and community initiatives and for behavioural change and political engagement by individual citizens. Participants: Paul Johnson, Research Fellow, Institute of Fiscal Studies and Associate, Frontier Economics. Professor Andy Gouldson, Director of the Sustainability Research Institute at the University of Leeds. Merlin Hyman, Director of the Environmental Industries Commission. Professor Andy Stirling, Director of Science for the Science Policy Research Unit (SPRU) at Sussex University.
Risk&Regulation, Summer 2008 15
Environmental Risk from an Industry Perspective: Protecting the licence to operate Neil Gunningham considers how companies perceive and respond to environmental risk through the notion of a business’s ‘licence to operate’.
nvironmental risk can be approached from many angles. For present purposes, I want to focus on risk from the perspective of business enterprises. In particular I want to ask: how do companies perceive environmental risk, how to they respond to it and why? In our book, Shades of Green, Bob Kagan, Dorothy Thornton and I argue that to explain how companies respond to environmental risk, it is useful to view business enterprises as simultaneously motivated and constrained by a multifaceted ‘licence to operate’. Traditionally, the notion of a business’s ‘licence to operate’ referred only to the company’s legal obligations. For example, in order to operate legally, a pulp mill manufacturer had to obtain a land-use and a construction permit before building a new facility, introduce particular pollution control technology, and once operating the facility, it had to maintain certain process and performance standards (for example, concerning hazardous waste disposal and workplace safety). Together, these regulatory obligations and permits might be referred to as a facility’s legal or regulatory licence. Today, however, the concept of ‘licence to operate’ must include ‘economic reality’ requirements such as the need to maximize shareholder return on investment (or at least to provide a reasonable rate of return). Of course, the terms of this economic licence of what is an adequate rate of return on investment or level of profitability are not written down in detail like a regulatory permit. Moreover, they may vary over time, ‘tightening’ and ‘loosening’ with market conditions and each firm’s economic performance. In addition, the ‘licence to operate’ concept has been extended to include the demands of social actors. Neighbours may complain about odour, local and international environmental groups may demand the use of less hazardous bleaching chemicals, and both groups may threaten a variety of informal sanctions if industry fails to respond. An extremely serious violation of community expectations such as a death-dealing explosion in a mill or a chlorine leak that results in severe threats to human health or to severe ecological damage can trigger political demands to close the plant down. The regulatory, economic and social licences are monitored and enforced by a variety of stakeholders, who commonly seek leverage by exploiting a variety of licence terms. Environmental
groups not only enforce the terms of the social licence directly (eg, through shaming and adverse publicity) but also seek to influence the terms of the economic licence (eg, generating consumer boycotts of environmentally damaging products) and of the regulatory licence (eg, through citizen suits or political pressure for regulatory initiatives). Thus the interaction of the different types of licence provisions extend the reach and impact of the social licence by directly empowering social activists or by giving them access to information that they can use to pressure target enterprises. Conversely, a company that fails to respond appropriately to social licence obligations risks a tightening of its regulatory licence when frustrated community activists turn for help to politicians and regulators. In terms of how firms interpret their environmental risk, our in-depth study of 14 pulp manufacturing mills in the US, Canada, Australia, and New Zealand, reveals that tightening regulatory and social licences have dramatically improved environmental performance in all the enterprises we studied, pushing most ‘beyond compliance’ in varying degrees. Yet firms’ ‘economic licences’ have limited the extent of ‘beyond compliance’ measures. We conclude that regulatory risk – intensifying regulatory standards, are still very important in driving large and rapid improvements in environmental performance – and most companies either build in a ‘margin of safety’ or go substantially beyond compliance in order to minimize the risk of an adverse regulatory reaction. And community and environmental activists can sometimes push companies to take further environmental action, even when it is not required by regulation, because of their capacity to threaten ‘reputation risk’. Moreover, skilful corporate officials not infrequently reduce risk by reshaping some licence terms. They can, for example, provide information to and negotiate with regulators or environmental activists, engage in community outreach and education, and/ or by scanning for technologies and procedures that simultaneously cut costs and improve the firm’s environmental performance. But we also found that terms of each strand of the ‘licence to operate,’ are often are unclear. Different corporate managers may interpret similar regulatory, economic, or social demands differently. But how far should an enterprise go in reducing environmental risk,
particularly when risk reducing measures are costly and seemingly unprofitable? This we found, depends very much on how an enterprise perceives those risks and on ‘environmental management style’. Those whom we termed ‘true believers’ saw considerable ‘win-win’ opportunities in environmental investment. As one of our respondents put it: ‘We feel if we are vigilant, push for continuous improvement we can stay competitive … [We ask] how can we reduce chemical usage, minimize energy use, and improve things like housekeeping efficiencies?’ And for them, minimizing environmental risk meant building good community relations. As the environment manager told us: ‘It’s very important how the community sees the plant – how they are thinking is our licence to operate.’ In contrast, those we termed ‘reluctant compliers’ saw little virtue in environmental spending, or in building positive relationships with the local community. Any such spending was viewed as ‘money down the rat hole’ and best avoided unless the regulator was threatening strong and imminent enforcement action. Even firms confronting very similar external pressures, interpreted those pressures very differently. Overall then, environmental risk involves multiple and interacting licence terms. Differences in social licence demands often appeared to be particularly powerful in influencing different environmental outcomes and this, coupled with the risk of regulatory enforcement most commonly drove environmental behaviour. But how a company responded to environmental risks also depended on management’s varying perceptions of the scope for ‘win-win outcomes’ and their perception of the importance of mitigating risk to their reputation. The latter, in particular, suggests that from a public policy perspective, empowering the social licence (for example by providing the community with access to information or the right to bring legal action) may be a particularly powerful point of leverage. For large, highly visible corporations, ‘reputation risk’ is becoming increasingly difficult to ignore. Neil Gunningham, Director of National Research Centre for Occupational Health and Safety Regulation, Australian National University.
16 Risk&Regulation, Summer Summer 2008 2008
Environmental Crises and Disasters Producing research that matters
The challenges of crisis management In times of crisis, the public expects government officials (local, state, and federal) to protect the wellbeing of citizens and livestock, to minimize damage, and to restore a sense of normalcy. Yet, these officials face hard challenges, as they have to act under conditions of deep uncertainty and extreme urgency. Everybody looks at them to ‘do something’, but it is far from clear what that ‘something’ is or whether it is possible to achieve without causing additional harm. To prevent a crisis from developing into a disaster, political and administrative leaders must carry out a set of complex tasks. They must figure out what is going on, implement command and control procedures, coordinate and deploy resources, make life-or-death decisions, and communicate with government agencies, private companies, NGOs, neighbouring countries and a fear-stricken public. They must manage the response, but they must also worry about restoring legitimacy.
Arjen Boin argues that failed responses to environmental risk have revealed the importance of understanding how states and societies manage catastrophic threats and events.
n the summer of 2005, Hurricane Katrina assaulted the coastal areas of three southern US states (Louisiana, Mississippi and Alabama) and flooded New Orleans. The disjointed response to this unfolding disaster demonstrated that the systems in place were no match for catastrophic events. In response to the observed shortcomings, Louisiana State University created the Stephenson Disaster Management Institute (SDMI). Through research and education, SDMI aims to improve response systems that can deal with all sorts of catastrophic threats and events.
Such research is needed for two reasons. First, it appears that the nature, scope and effects of crises and disasters will change quite dramatically in the not so distant future. Second, it has become abundantly clear that traditional ways of organizing response systems will be inadequate in the face of these future crises and disasters.
Society under threat: Crises and disasters The world is replete with crises and disasters. Recent examples of unprecedented adversity include the 9/11 attacks, the Madrid and London bombings, the Asian Tsunami, SARS and Avian Flu, Hurricanes Katrina and Rita, and the California wildfires. Crises and disasters are risks that come true. They tax our imagination and shake our sense of safety and security. They put societies and their leaders to the test. When a social system comes under threat, its leaders will have to engineer and implement remedial action that protects citizens and their possessions from (further) harm. For research purposes, it is crucial to draw a sharp distinction between crises and disasters. We define a crisis in terms of a threat to core values or life-sustaining systems, which requires an urgent response under conditions of deep uncertainty. We define a disaster in terms of the outcome or consequences for a society: a disaster is a ‘crisis with a bad ending’. When a crisis is perceived to have really bad consequences, we speak of a catastrophe. An effective response system separates a crisis from an environmental catastrophe. Sound organization and leadership in the response phase make the difference between a mere threat and a disastrous outcome.
Recent disasters have shown just how hard this set of tasks can be. A crisis creates unique circumstances that demand flexibility, improvization, coordination and speed – not exactly strengths of public bureaucracies operating across multi levels of government. Time pressure, overwhelming emotions, public outcries, political scrutiny, media spotlights and the breakdown of critical infrastructures all conspire against the effectiveness of a government’s response. Government officials will face even harder challenges as the nature, scope and effects of future crises and disasters will change. Future crises and disasters will be increasingly transboundary, crossing geographic and functional boundaries, jumping from one system to another. Future threats will create new, unforeseen and unimaginable challenges. The increased complexity of tightly coupled systems will lead to more cascading crises. The development of new technologies, the continuing threat of modern terrorism, and the changing climate will likely bring disasters of an entire new category. Meanwhile, the governmental capacity to deal with these threats is undermined by the inherent difficulties of crisis and disaster management, misguided ideas about the design of response structures, and the political and media context in which these threats must be managed.
Risk&Regulation, Risk&Regulation, Summer Summer 2008 2008 17 17
GUESTCOLUMN Improving practice through research and education: A research agenda SDMI aims to identify causes of success and failure in disaster response through high-quality research projects. In addition, SDMI will develop and deliver educational means through which the research findings can be disseminated directly to the senior levels of government organizations, NGOs and private enterprise. The following items feature prominently on the SDMI research agenda: • The information problem. During a crisis or disaster, it is crucially important to get an accurate picture of the evolving situation. In reality, it has proven extremely difficult to effectively organize and analyse information streams. SDMI will identify those factors that enhance a more comprehensive and accurate situational assessment. • T he communication problem. It has proven frustratingly difficult during many disaster response operations to organize lines of communication between all those involved. Communication means often break down (in spite of continuing technological fixes that promise to resolve this problem). Rumours infiltrate and pollute raw data. More importantly, however, is the problem of miscommunication: relaying the wrong information to partners, citizens, media, and other stakeholders. SDMI will extract the lessons from the extensive field of communication studies and probe their validity in the context of crisis and disaster management. SDMI will pay special attention to the role of the media during crises and disasters. • D esigning a highly reliable response system. A response organization is called upon to perform only sporadically. When it does, the network has to meet (preferably surpass) design specifications. It must, in other words, be highly reliable under extreme circumstances that are hard to simulate. Two problems coincide here. One is the problem of high reliability: we do not know what exactly makes a network of organizations reliable. Another is the problem of institutional design: even if we do know the success factors, it is not always clear how to build these into public networks. SDMI will bring together the two research fields that work these questions. The result will be a clearly formulated vision on the design of response networks. • Nurturing effective leadership. In any disaster response operation, a select number of tasks fall within the exclusive domain of executive leadership. For instance, it is the task of formal leaders to facilitate improvization on the ground, make certain critical decisions and communicate to the stricken population what is going on and what is being done to mediate the damage. In practice, most leaders (many of whom deal with a disaster only once in their lifetime), have no proper conception of their role. SDMI will identify the critical tasks of effective leaders and validate the importance of these tasks by studying a large set of disaster cases.
on crisis and disaster management issues is the absence of a shared model of expectations. What can we reasonably expect from a response system after the sudden onset of a mega disaster? SDMI will explore existing models and map expectations among the public, politicians and the disaster management community. SDMI will formulate a normative model and put it up for public and academic scrutiny. • O rganizing the logistics of disaster response. After a society is struck by massive disruption of critical infrastructures, paralysis and breakdown of routine processes follow quickly. As a result, elementary goods and service are no longer available. This, in turn, makes it hard to repair critical infrastructures. Public bureaucracies find it painfully difficult to shift massive resources effectively and rapidly to a stricken area. Much can be learned from best practices developed in the private sector (notable examples include Wal-Mart and FedEx). SDMI will study largescale logistical chains in the private sector and translate these lessons to the context of public disaster management. • Saving animal lives. In modern society, people increasingly attach value to the lives of animals (pets, livetock, and wild animals). The practice of crisis and disaster response has not adapted to this new reality. As a result, response operations are hampered by the unwillingness of citizens to be evacuated without their pets and livestock. The structure and practices of crisis and disaster response operations must be adapted in light of this new reality. SDMI will explore how this can be done. • Facilitating coordination. A response network typically consists of multiple organizations, many of which have never worked with each other before. Coordination is both crucially important and impossibly hard to achieve on the fly. In fact, it is no exaggeration to label the search for effective coordination the Holy Grail of effective crisis and disaster response. SDMI will explore why some response operations perform well whereas many fall apart. • The politics of crisis and disaster management. One would expect public authorities to cooperate during a disaster in order to save lives and avert the threat at hand. This often is not the case, however. During crises and disasters, political fault lines do not disappear. The prospect of future gains and losses motivates to a significant degree the actions of actors in the disaster response network. It is crucial to understand the political dynamics of crisis and disaster management, which will help to
increase the effectiveness of the response. SDMI will work with experienced practitioners to test and validate theoretically derived insights, and to develop additional insights. • International cooperation. The mega disasters of the future will increasingly require sustained international cooperation, both in the immediate response phase and in the aftermath. As critical infrastructures become ever more complex and integrated across borders, nation states will not be able to deal with major disturbances by themselves. This poses major challenges, as countries cooperate hesitatingly at best when it comes to international disaster assistance. Much of the international response is facilitated by, and channelled through, NGOs such as the International Red Cross, Doctors without Borders etc. SDMI will work towards the formulation of a new disaster response paradigm that can enhance transatlantic cooperation in the face of transboundary crises and disasters. • Building societal resilience. Recent disasters have demonstrated the limited capacity of existing response systems. One way to provide increased safety and security is to enhance this capacity (much of our research agenda serves exactly that purpose). A complementary approach is to build resilience into first line responders (which typically include officials, volunteers, and citizens). A resilient society is characterized by the ability to rapidly and innovatively reconfigure available capacities in response to the sudden paralysis of critical infrastructures. SDMI will investigate what leaders can do to enhance resilience and how they can exploit its potential during disasters. Crises and disasters have always been hard to manage, as they create ‘impossible’ challenges. But leaders and their response operations often fail because they are not properly or fully prepared to deal with these challenges. Political and administrative elites must learn to avoid the pitfalls and pathologies that have hampered many crisis response operations, while implementing the lessons that were learned the hard way. SDMI will help develop insights and strategies that will enhance the effectiveness of crisis and disaster response. In light of the threats that face us, SDMI will cooperate with practitioners and academics to deliver research that can help make the crucial difference between environmental threats and environmental catastrophes. Arjen Boin Stephenson Disaster Management Institute, Louisiana State University. For more information, visit www.sdmi.lsu.edu
• Formulate a normative model of disaster management performance. One of the persistent pathologies underlying public, political and academic discourse Photo: FEMA/Ed Edahl
18 Risk&Regulation, Summer 2008
Internationalisation and Economic Institutions
Changing paradigms of governance and regulation of quality of healthcare in England
Mark Thatcher Oxford University Press 2007
Gwyn Bevan. 2008. Health, Risk and Society, 10 (1), 85-101.
From drug crises to regulatory change: The mediation of expertise David Demortain. 2008. Health, Risk and Society, 10 (1), 37-51.
La lĂŠgitimation par les normes. Experts et Commission David Demortain. 2008. Sociologie du Travail, 50 (1), 1-14.
Risk regulation and health care Bridget M Hutter. 2008. Health, Risk and Society, 10 (1), 1-7.
In defence of politicking: Private, personal and public interests Robert Kaye. 2008. In L Huberts, J Maesschalck and C Jurkiewicz (eds.). Ethics and Integrity in Governance, Cheltenham, Edward Elgar Publishing.
Counting the costs: The risks of regulating and accounting for health care provision Liisa KurunmĂ¤ki and Peter Miller. 2008. Health, Risk and Society, 10 (1), 9-21.
Reforming regulation of the medical profession: The risks of risk-based approaches Sally M Lloyd-Bostock and Bridget M Hutter. 2008. Health, Risk and Society, 10 (1), 69-83.
Learning from patient safety incidents: Creating participative risk regulation in healthcare Carl Macrae. 2008. Health, Risk and Society, 10 (1), 53-67.
Calculating economic life Peter Miller. 2008. Journal of Cultural Economy, 1 (1).
Recent CARR Discussion Papers
www.lse.ac.uk/collections/CARR/ documents/discussionPapers.htm DP50 Institutional Polymorphism: The Designing of the European Food Safety Authority with regard to the European Medicines Agency David Demortain, April 2008
DP49 Gammelfleisch Everywhere? Public Debate, Variety of Worldviews and Regulatory Change
Organized Uncertainty: designing a world of risk management Michael Power Oxford University Press 2007
The Politics of Public Service Bargains Christopher Hood and Martin Lodge Oxford University Press 2006
Innovation: a comparative analysis
Julia Black, Martin Lodge and Mark Thatcher (eds) dward Elgar 2005 E
Organizational Encounters with Risk Bridget Hutter and Michael Power (eds) Cambridge University Press 2005
Regulating Law Christine Parker, John Braithwaite, Nicola Lacey and Colin Scott Oxford University Press 2004
On Different Tracks: designing railway regulation in Britain and Germany Martin Lodge Greenwood Press 2002
The Government of Risk: understanding risk regulation regimes hristopher Hood, Henry Rothstein and Robert Baldwin C Oxford University Press 2001
Martin Lodge, Kai Wegrich and Gail McElroy, January 2008
DP48 Building a Boundary Object: The Evolution of Financial Risk Management Yuval Millo and Donald Mackenzie, December 2007
DP47 Analyzing Near-Miss Events: Risk Management in Incident Reporting and Investigation Systems Carl Macrae, December 2007
Regulation and Risk: occupational health and safety on the railways ridget Hutter B Oxford University Press 2001
Risk&Regulation, Summer 2008 19
CARRpeople CARR research staff
CARR research associates
Bridget Hutter CARR Director Professor of Risk Regulation
Michael Barzelay Professor of Public Management, LSE
Yuval Millo Lecturer in Accounting, LSE
Ulrich Beck Professor, Institute for Sociology, Munich
Edward Page Professor of Public Policy, LSE
Gwyn Bevan Professor of Management Science, LSE
Nick Pidgeon Professor of Applied Psychology, Cardiff University
Sociology of regulation and risk management; regulation of economic life; corporate responses to state and non-state forms of regulation. David Demortain ESRC Research Officer
Julia Black Professor of Law, LSE
Sociology of regulation and risk management; sociology of expertise and scientific advice.
Damian Chalmers Professor in European Union Law, LSE
John Downer ESRC Research Officer Sociology of knowledge; epistemology of technological risk assessment; regulation of complex and dangerous technologies. Jeanette Hofmann ESRC Research Officer Internet regulation and the development of intellectual property rights.
Will Jennings British Academy Postdoctoral Fellow
Simon Deakin Professor of Corporate Governance, University of Cambridge Anneliese Dodds Lecturer in Public Policy, King’s College London George Gaskell Professor of Social Psychology, LSE Maitreesh Ghatak Professor of Economics, LSE
Regulation of government by public opinion; blame avoidance; policy implementation.
Sharon Gilad Lecturer, Social Science and Public Policy, King’s College London
Martin Lodge CARR Research Theme Director: Reputation, Security and Trust. Reader in Political Science and Public Policy
Andrew Gouldson Director, Sustainability Research Institute, University of Leeds
Comparative regulation and public administration; government and politics of the EU and of Germany; railway regulation in Britain and Germany; regulatory reform in the Caribbean.
Terence Gourvish Director, Business History Unit, LSE
Sally Lloyd-Bostock Professorial Research Fellow
Christopher Hood Professor of Government and Fellow, All Souls College, University of Oxford
Medical regulation by the GMC. The psychology of routine decision making, blaming and accountability and the construction and use of information about risk. Regulation and compensation culture. Peter Miller Deputy Director and CARR Research Theme Director: Performance, Accountability and Information; Professor of Management Accounting Accounting and advanced manufacturing systems; investment appraisal and capital budgeting; accounting and the public sector; social and institutional aspects of accounting. Michael Power CARR Research Theme Director: Knowledge, Technology and Expertise; Professor of Accounting Internal and external auditing; risk management and corporate governance; financial accounting and auditing regulation.
Carol Harlow Professor Emeritus of Public Law, LSE
Michael Huber Professor for Higher Education Research, Institute for Science and Technology Studies, Bielefeld University Professor Roger King Visiting Professor, Centre for Higher Education Research and Information, Open University Liisa Kurunmäki Reader in Accounting, LSE Javier Lezaun Lecturer in Science and Technology Governance, James Martin Institute, Saïd Business School, University of Oxford. Donald MacKenzie Professor of Sociology, University of Edinburgh Andrea Mennicken Lecturer in Accounting, LSE
Tony Prosser Professor of Public Law, Bristol University Judith Rees Professor of Environmental and Resources Management, LSE Henry Rothstein Lecturer, Centre for Risk Management, King’s College London Colin Scott Professor of EU Regulation and Governance, University College Dublin Susan Scott Lecturer, Information Systems, LSE Jon Stern Honorary Senior Visiting Fellow, City University Lindsay Stirton Lecturer in Medical Law and Ethics, University of Manchester Peter Taylor-Gooby Professor of Social Policy, University of Kent at Canterbury Mark Thatcher Reader in Public Administration and Public Policy, LSE Kai Wegrich Professor of Public Management, Hertie School of Governance, Berlin Paul Willman Professor in Employment Relations and Organizational Behaviour, LSE Brian Wynne Professor of Science Studies, Lancaster University
CARR visiting professors Keith Hawkins Emeritus Professor of Law and Society, University of Oxford
CARR administrative team Nadia Mirza Events and Office Administrator Phil Lomas Centre Administrator
ESRC Centre for Analysis of Risk and Regulation The London School of Economics and Political Science Houghton Street London WC2A 2AE United Kingdom
Tel: +44 (0)20 7955 6577 Fax: +44 (0)20 7955 6578 Website: www.lse.ac.uk/collections/CARR/ Email: firstname.lastname@example.org