Risk and Risk Science

terje aven Risk and Risk Science Stories and Reflections

terje aven is a professor in risk science at the University of Stavanger (UiS). He has been central in developing UiS as an international leading center for research and education within risk and safety subjects. Aven has written a large number of scientific articles and books in this area, with a special emphasis over the last 20 years on building a strong foundation for risk science. Aven has had important international positions in the professional environment, for example as leader of the Society for Risk Analysis (SRA) and the European Safety and Reliability Association (ESRA). He is the editor of two international journals in the field of risk, for one of which he is editor-in-chief.

Risk and Risk Science

Terje Aven

Risk and Risk Science

Stories and Reflections

scandinavian university press

© Scandinavian University Press 2022

ISBN 978-82-15-06657-8

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, electronic, mechanical or photocopying, recording, or otherwise, without the prior permission of Universitetsforlaget.

Enquiries should be sent to the Rights Department, Universitetsforlaget, Oslo, at the address below: Universitetsforlaget AS P.O. Box 508 Sentrum NO-0105 Oslo Norway This is a translation of the book Risiko og risikovitenskap: Fortellinger og refleksjoner, published by Universitetsforlaget February 2022 www.universitetsforlaget.no

Cover design: Sissel Tjernstad / Universitetsforlaget Prepress: ottaBOK Typeset: Palatino LT Std 10/14 pkt. Printed in Norway by Aksell

CONTENTS

Preface .................................................. 9

Chapter 1 Introduction ............................................. 13

PART I

THE WORLD OF RISK – SOME ILLUSTRATIVE ISSUES AND EXAMPLES . . . . . . 19

Chapter 2 Is risk something good or attractive? ........................ 21

Chapter 3 Space exploration ........................................ 27

Chapter 4 Is the terrorism threat fictitious? ............................ 31

Chapter 5 Climate change risk ...................................... 35

Chapter 6

The origin of the coronavirus .............................. 38

Chapter 7 Vaccines ................................................ 42

Chapter 8

The Fedje submarine ...................................... 46

Chapter 9 Black swans ............................................. 51

Chapter 10 Perfect storms ........................................... 56

PART II RISK SCIENCE AND SCIENCE IN GENERAL .......................... 59

Chapter 11

What is risk? ............................................. 61

Chapter 12

In short, what is risk science about? ......................... 65

Chapter 13

What is the scientific method? ............................. 68

Chapter 14 Idol and science .......................................... 74

Chapter 15

What does the precautionary principle mean? ................ 77

Chapter 16

Is the handling of COVID-19 about science or politics? ........ 81

Chapter 17

The importance of robustness and resilience ................. 85

Chapter 18

What is safe enough? ..................................... 89

Chapter 19

Are people’s risk perceptions irrational? ..................... 94

Chapter 20

The search for a formula for making good decisions under risk and uncertainty ...................................... 99

Chapter 21 Do all events have a cause? ................................ 103

PART III

RISK ASSESSMENTS AND PROBABILITIES .......................... 107

Chapter 22

What is the chance of Yatzy? ............................... 109

Chapter 23

Jacob Bernoulli and the specification of probabilities .......... 113

Chapter 24

More about probabilities, what they mean, and why they are important ........................................ 116

Chapter 25

The Athenians conducted risk assessments, but they lacked the probabilities .......................................... 121

Chapter 26

The use of probabilities in legal matters ..................... 125

Chapter 27

Good risk characterizations: Traditional risk matrices must be rejected ............................................... 128

Chapter 28

The need to build the risk assessments on a solid scientific basis ........................................... 132

Chapter 29

Final reflections: Risk science should be taught in schools ...... 134

PREFACE

All human activity involves risk. Think about it. You drive a car to work, you play football or handball, you jump with a parachute, you ask a person out on a date, you invest money in shares, you work in a company that produces an explosive product, you are part of a society that provides electricity and water for its inhabitants, etc. If you look ahead in time, you do not know the outcomes with certainty. The date can go well, but it can also end in failure. You count on, believe in, or hope for certain outcomes, for example, that the date will be a success. Otherwise, you would not have invited the person out. When you invest in stocks, it is to make money. But you can be unlucky and lose. Because there is risk present.

The world we are a part of and which the examples above illustrate – the world of risk, as we can call it – is characterized by both failures and opportunities. The date can be a fiasco, but the result over time can be that you learn more about yourself and develop as a person. We do not want accidents to happen, but we also do not want to hinder development and growth. If we start an industrial activity, it can lead to loss of life and injuries. We know that, but we accept the risk because the payoff is so high. The activity offers opportunities for great earnings.

In our society, we introduce a number of measures to address the risks, such as insurance, legislation, and regulatory supervision. We ban dangerous substances, we monitor potential terrorists, and we implement emergency and crisis management systems to be prepared

should an accident or terrorist attack occur. The measures do not come by themselves, and the path is often convoluted. As a rule, professional, managerial, and political processes are needed to make the decisions. And often there is discussion about what direction to follow. Consider, for example, the question of how to best meet the climate change risk.

To understand this world and be able to describe and manage the risks, we need suitable concepts, principles, and methods. We need a science of risk. And such a science is now emerging. This science is also part of the risk world. It is based on many ideas and thoughts that go far back in time. If we follow history, we will see that this part of the risk world is also full of mistakes and opportunities. Professionals have launched and continue to launch various concepts, principles, and methods, but it is difficult to agree on which are the most appropriate. This book will also give you knowledge about this part of the risk world.

This is not a traditional textbook on risk and risk science. The book is a collection of stories and reflections about risk and risk science. I want to give you, the reader, insight into what this subject and this science is about – and why it is important – by presenting illustrative examples and stories. In these times (2021 and 2022), we are particularly concerned with risks related to COVID-19, vaccination, and climate change. I have not heard many media people, bureaucrats, and politicians explaining to us what risk means in this context. It is not obvious. What is good communication about these risks? Do the authorities deal with them in a good way? Reference is made to the precautionary principle, but do we understand what it means in this context? Is it a meaningful principle to apply here? The politicians would like to be science-based, but what does that mean? After all, science does not always provide clear answers, at least not when the uncertainties are large.

The book does not provide a complete review of all subjects of risk science – that is not possible; the world of risk cannot be fully explained

in one book. Nor is it objective. Nevertheless, I believe that the book covers important topics of risk science. The ambition has been to shed light on some selected issues, linked to themes as indicated above. Many of these are related to events and happenings that have occurred in recent years, while others go back a bit in time. However, all the examples are relevant to our lives today and to the challenges we face in the future.

You do not need to have a background in probability and statistics or other subjects to be able to read this book. What is required is that you have an interest in and some training in abstract thinking and philosophy. If someone asks you what risk is and how risk intervenes in our lives, does it arouse your curiosity and interest? If it does, I am sure you will enjoy the book.

I hope the book will inspire pupils and students to delve into risk science. They do not learn about this subject at school, so there is a need for knowledge of what it is about, without going into too much detail and becoming too comprehensive and technical. The book can be seen as a first introduction to studies in risk-related subjects. But it is also intended to be able to provide an interesting and exciting introduction to the subject for people who work with issues related to risk in society, such as engineers, economists, health personnel, and managers, in both the public and private sectors.

I have received many useful inputs for the book during the writing process. A special thank you goes to my colleagues Professors Eirik B. Abrahamsen and Roger Flage for their constructive comments and suggestions for improvements. Some of the chapters (Chapters 2, 4, 9, 14, 16, 18, and 28) are based on articles in newspapers (Aftenbladet and DN). However, the text has been significantly changed for most of the articles. For the text in Chapter 16, I would like to thank my co-author and colleague Professor Ole Andreas Engen.

Preface

I would also like to thank Eli Valheim, Universitetsforlaget, for very good cooperation throughout the development of this book.

For a more in-depth presentation of risk science and risk science topics, I refer to the textbook Risk Science: An Introduction.1 Stavanger February 2022

Terje Aven

1 Aven, T. & Thekdi, S. (2022) Risk Science: An Introduction. Routledge.

INTRODUCTION

The author’s meeting with risk science

I started studying mathematics at the University of Bergen. It was mostly about theorems and lemmas – and their proofs. These theorems and lemmas were derived from definitions and axioms (principles that are accepted without proof). Once the proof was established, the theorems and lemmas could be accepted. Stone upon stone was laid in this way. A building was erected in which all elements were precisely described and put together in a way that followed the principles of logic. It was very satisfying to know that I could somehow participate in the creation of this structure; I could understand all its components and how they were put together. For me, this was a beautiful world of thought, characterized by elegance and harmony.

But something was missing, namely, relevance to the world we live in. And it was a good fit that in order to get a master’s degree – cand. real., as it was then called – I had to choose another subject to also include in my studies. I examined the study catalog carefully, and it did not take long before I was convinced that the choice for me had to be probability and statistics, often referred to collectively as mathematical statistics. This was largely a mathematical subject, but it also had interesting applications. Today, students learn about this subject early in school, but I actually first met it at university. I was thrilled – especially for the probability calculus.

However, the really great commitment to, and enthusiasm for, the study came when I met Professor Bent Natvig from the University of Oslo. He was passionately interested in how to analyze the reliability and risk associated with technological systems. It was not as easy to calculate probabilities for these systems as for games. Nevertheless, one could assess reliability and risk. The key was to create mathematical models of the systems and their components. By expressing the probabilities of the failure of the individual system components, one was able to compute the reliability of the entire system. Natvig led me into the research world. He was concerned with developing new theory and new methods that could improve the understanding and calculations of the reliability of these systems. Previously, the models had been based on the assumption that the system and its components either worked or did not work. Natvig’s research involved expanding the analyses to also cover situations where the system and its components could have more than two states, for example reflecting partial functioning. It was extremely exciting to participate in this work.

I was barely 25 years old, and I did not ask questions about the assumptions for the calculations and analyses. I was not concerned that the models used could be based on incorrect assumptions or that the component probabilities were based on more or less relevant data. Although the analyses dealt with reliability and risk, the subject area of the work was in reality strictly within mathematical statistics.

It was not until the 1990s that I became seriously concerned with questions that challenged the assumptions and frameworks for the analyses. By then, I had worked for a few years with practical problems in industry. I discovered that, in the real world, the mathematics and the calculus of probability did not quite make it. The calculations could be comprehensive and elegant, but what if they overlooked important risk sources?

In a way, this realization – that it was necessary to look beyond the numbers – was sad; my subject and discipline was not sufficient to be able to answer the central questions related to the understanding, communication, and handling of risk. On the other hand, it opened up new and interesting perspectives. If I were to be able to say something wise and useful about understanding, communicating, and managing risk related to practical issues, I had to expand my thinking and approach to risk.

I became interested in finding out what other professionals had thought and done. I quickly realized that my thoughts and concerns were not unique and original. Many other professionals and experts had pointed out the limitations of mathematics in this context. In particular, I noticed that there were many professionals with social science and psychological backgrounds who were critical of the technical-mathematical approach to risk. They pointed to the models’ weaknesses and the need to more strongly emphasize human and organizational aspects. Research was conducted which showed that people perceived many risks quite differently than the experts did.

I understood much of the criticism leveled against the technical-mathematical approach, but should we just throw this approach overboard? Was it not better to try to develop it further, improve it, and face the criticism? Yes, and many professionals and researchers have been concerned with just that: to combine technical-mathematical methods with ideas and perspectives from social science studies and psychology.

Central to this work is so-called integrative thinking. A good example of such thinking can be found in the understanding of what risk really is. The technical-mathematical approach gave the concept of risk a numerical interpretation that was unable to capture important risk aspects. On the other hand, the perspectives from the social sciences and psychology emphasized uncertainty and the perception of risk. The

differences in thinking between these areas gave rise to tensions and discussion. However, unifying, integrating solutions have been found: Risk must not generally be seen as a number. Accident numbers and probabilities give a measure of the risk, but these measures can be more or less good at describing the risk. Uncertainty about what will happen is a more fundamental aspect of risk than probability. This recognition provides opportunities for a new understanding of risk, which unites the different perspectives. People’s perceptions of risk may have their origin in this uncertainty and may explain why, in many cases, they do not share the experts’ understanding of risk, which is based on the probabilities derived in the risk assessments.

With such an expanded understanding of risk, where uncertainty is a central aspect, surprises and the unforeseen will also find their place. This was a subject area that I never addressed during my studies. Nor was it an issue we discussed when I worked with risk assessments in the 1990s in industry. Within safety research and the quality profession, however, there were many who were concerned with the challenges that surprises and the unforeseen represented when it came to avoiding accidents and losses. I became familiar with this literature only after Nassim Taleb published his book on black swans in 2007.2 This book was very inspiring. The metaphor ‘black swan’ explained in an easy-to-understand way what the topic of surprises and the unforeseen means. The risk analysts and researchers have provided some answers on how to meet this challenge. One is to emphasize robustness and resilience. Events happen that surprise us. We can plan, based on what has happened in the past, and do our analyses, but they are not perfect. We must acknowledge this and develop ourselves, our systems, and our

2 Taleb, N.N. (2012) Anti Fragile. Penguin.

organizations, so that we are able to continue to function well when such events occur.

Another answer to the challenge related to possible surprises is to improve the risk assessments. This is necessary and possible to achieve. It is not enough to focus on probabilities. The knowledge on which these analyses are based can be more or less strong, even wrong. Surprises arise relative to this knowledge. This aspect of risk has not been given enough weight in the risk assessments. It is now a central topic in risk research, and new and improved approaches and methods are being developed.

The world of risk – some illustrative issues and examples

IS RISK SOMETHING GOOD OR ATTRACTIVE?

No one would say that accidents and injuries are good. When you drive a car, you try to avoid a collision. But you take risks. When driving, things can happen that result in people being injured and even killed. Before the trip starts, you do not know what will happen, but your experience and a quick risk assessment tell you that the trip will go well and you will arrive at the cottage as planned. You accept the risk without blinking, as it is small and the benefit from using the car is large.

Think about it. What things are you proud of having achieved in your life? Do they involve risk? “Yes,” I am sure you answer. It could have gone wrong, but you succeeded and had an amazing experience. Perhaps you thought of the first time you dared to give a speech for a large audience or you became the father or mother of a child. You remember being extremely nervous before the talk – there were no limits to what could go wrong in your mind before you started. You know that a birth can involve many complications, and the consequences can be very serious.

Fortunately, most people do not let the risks stop them; they carry on. The driving force is what one wants to achieve: to have children and to convey a message. But for some, the risks and uncertainties related to how things will go can seem so large that they are stopped from doing what they really want. The potential negative outcomes are frightening.

Part I The world of risk – some illustrative issues and examples

We all have our areas where we say no. But we know very well that if there are too many of them, our quality of life deteriorates, our activities are constrained, and we achieve little.

The other extreme is probably not much better; we take such high risks that the catastrophic outcome is almost given. If you drive extremely aggressively in traffic or engage in certain forms of extreme sports, you know that you are gambling with your life.

For most of us, the problem is not too much risk but too little. We dare not take the risk; the possible failures scare us. There is no definitive answer to what the right balance is between taking risks and protecting oneself. We are different as people. And we have different starting points. But if we are to develop as people, we must invest and take risks. The outcomes will not always be as desired, but over time we will most likely benefit from them – we create desirable outcomes and results. The negativities and difficulties we experience when the outcome of the risk we took turned out to be bad can be hard to bear, but they are part of life. Who has not experienced mistakes that became turning points? Look at sports. A football team that loses big one week will often play fantastically the next week. A golfer who messes up in a tournament in the last few strokes often comes back in the next tournament and wins. I have seen it happen over and over again. There is enormous energy in the loss and disappointment.

What would society look like without people taking risks? Business depends on people taking risks, such as investors who throw money into projects and shares where they do not know the outcome. They are driven by the belief that the investments will pay off. The state also takes risks – in fact, huge risks in many contexts. In Norway, it is the state that has invested in the oil and gas industry. Large amounts are invested. The Norwegians have been lucky; the outcome has been enormous in terms of income. However, a number of accidents and

Other titles by Terje Aven available from Scandinavian University Press:

Risiko og risikovitenskap. Fortellinger og refleksjoner 2022

Risikoanalyse

2.ed., 2017 (with Willy Røed and Hermann S. Wiencke)

Risikostyring 2.ed., 2015

Pålitelighets- og risikoanalyse 4.ed., 2006

Today, risk is on the agenda in most contexts: in connection with climate change, medicine and health, technology, economics, and much more.

We often refer to the precautionary principle, but do we really understand this term? And when is it a meaningful principle to use? When accidents occur, we often complain about the preparedness being poor. But how good should the preparedness and safety be?

It is rare for media people, bureaucrats, or politicians to explain to us what risk really means. The politicians would like to follow the science, but the science does not always give clear answers, particularly when the uncertainties are large. Metaphors like black swans and perfect storms are popular, but giving them precise interpretations is not so easy.

This book is a collection of stories and reflections on risk and risk science. The aim is to give you, the reader, knowledge about how risk intervenes in our lives and society, and how risk science can help us understand, analyse, communicate, and handle risk. The author guides you through these topics without going into too much detail, and without becoming too technical.

The book is aimed at pupils and students and will work excellently as a first introduction to studies in risk-related subjects. It also provides an interesting and exciting introduction to the subject for those who work with problems related to risk in society – for example if you are an engineer, economist, healthcare worker or manager – in both the public and private sectors.