Technical Report On Environmental Risk Management : The Interactions of Economic and Non-economic Factors

Sakai, Yasuhiro

(No. A-14)  , pp.1 - 21 , 2015-04 , Center for Risk Research (CRR), Shiga University
This paper aims to discuss environmental risk management from a newperspective. Although there is a growing literature dealing with the relation betweenthe economy and the environment in the absence of risk and uncertainty, it is quiteunfortunate that the effects of a variety of risk factors on such a relation have not beenintensively investigated by social scientists.Before 11 March 2011, most people believed in the myth of absolute safety. Sincethe Great East Japan Earthquake took place, however, their concept of risk for nuclearpower generation has been changed completely. What they once regarded as theunthinkable events is no longer beyond imagination. This clearly indicates thenecessity of studying environmental risk management in a new perspective.In this paper, we would like to show that simple applications of the conventionalexpected utility theory would possibly lead us to wrong conclusions. It is high time forus to combine both economic and non-economic (cultural and psychological) factorstowards a more synthetic theory of decision making under risk and uncertainty.

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