Report

The Emergence of Risks: Contributing Factors

international risk governance council P 2

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international risk governance council The Emergence of Risks: Contributing Factors P 3

Abbreviations 02 Contents Preface 04 Executive summary 05

I Introduction 08 II Definitions of terms 09 III The systems perspective 12 IV Recognising complexity 14 V Why risks emerge: contributing factors to fertile ground 16 VI Twelve generic contributing factors to fertile ground 18

Factor #1: Scientific unknowns 18 Factor #2: Loss of safety margins 22 Factor #3: Positive feedback 24 Factor #4: Varying susceptibilities to risk 26 Factor #5: Conflicts about interests, values and science 28 Factor #6: Social dynamics 30 Factor #7: Technological advances 33 Factor #8: Temporal complications 36 Factor #9: Communication 39 Factor #10: Information asymmetries 41 Factor #11: Perverse incentives 44 Factor #12: Malicious motives and acts 46

Conclusion and way forward 49 Glossary 53 References 54 Acknowledgements 58 About IRGC 59

The Emergence of Risks: Contributing Factors international risk governance council P 4

Preface

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international risk governance council The Emergence of Risks: Contributing Factors P 5

Executive summary

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The Emergence of Risks: Contributing Factors international risk governance council P 6

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international risk governance council The Emergence of Risks: Contributing Factors P 7

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The Emergence of Risks: Contributing Factors international risk governance council P 8

I Introduction

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international risk governance council The Emergence of Risks: Contributing Factors P 9

II Definitions of terms

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The Emergence of Risks: Contributing Factors international risk governance council P 10

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III The systems perspective

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international risk governance council The Emergence of Risks: Contributing Factors P 15

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The Emergence of Risks: Contributing Factors international risk governance council P 16

V Why risks emerge: contributing factors to fertile ground

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The Emergence of Risks: Contributing Factors international risk governance council P 18

VI Twelve generic contributing factors to fertile ground

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international risk governance council The Emergence of Risks: Contributing Factors P 23

Analysis of what can be done to increase system resilience can lead to improved Risk risk prevention.

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The Emergence of Risks: Contributing Factors international risk governance council P 24

Interconnectedness in Megacities

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international risk governance council The Emergence of Risks: Contributing Factors P 25

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The Emergence of Risks: Contributing Factors international risk governance council P 26

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international risk governance council The Emergence of Risks: Contributing Factors P 27

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The Emergence of Risks: Contributing Factors international risk governance council P 28

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international risk governance council The Emergence of Risks: Contributing Factors P 29

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The Emergence of Risks: Contributing Factors international risk governance council P 30

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international risk governance council The Emergence of Risks: Contributing Factors P 31

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Factor #11: Perverse incentives Since incentives for risk taking Summary: Perverse incentives are those that induce counterproductive or undesirable are largely within the control of behaviours, which lead to negative, unintended society (public and private sectors), consequences. Such incentives may lead to the misaligned incentives can be emergence of risks, either by fostering overly addressed through regulation and risk-prone behaviours or by discouraging risk other policy measures. prevention efforts.

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international risk governance council The Emergence of Risks: Contributing Factors P 49

Conclusion and way forward

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The Emergence of Risks: Contributing Factors international risk governance council P 50

A tolerable risk profile

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international risk governance council The Emergence of Risks: Contributing Factors P 51

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Glossary

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The Emergence of Risks: Contributing Factors international risk governance council P 54

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The Emergence of Risks: Contributing Factors international risk governance council international risk governance council

Chemin de Balexert 9 1219 Châtelaine Geneva Switzerland tel +41 (0)22 795 17 30 fax +41 (0)22 795 17 39 [email protected] www.irgc.org

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