Quantitative Risk Assessment

Identifying, understanding, and managing risks is an imperative tool in preventing accidents during the course of business operations. Engaging in emergency preparedness and preventing harm to human health and the environment can be significantly informed by undertaking a risk assessment.

Risk assessment is a scientific process that defines, identifies, and analyzes the nature and magnitude of risks, uncertainties of the risk, and its impacts. It can involve either quantitative or qualitative analysis. Risk assessment is used to establish priorities in which the decision maker is able to target the allocation of resources according to the immediacy and acuteness of the threats in order to make unwanted events less likely to happen, according to the U.S. Department of Health and Human Services. In this way, it contributes toward decision making through proactive risk management and mitigation of potentially detrimental impacts.

Probability should be understood as the likelihood that a particular hazard will result in damage at a particular location. Hazards are defined as any situation that has the potential to cause damage: for example, chemicals, electricity, or working while standing on a ladder. Allocating probabilities to specific outcomes or risks is a way of assessing the likelihood of particular negative eventualities and is a means of informing risk management decisions.

Quantitative Risk Assessment (QRA), also referred to as Probabilistic Risk Assessment, is a systematic scientific process that identifies the possible causes of harm (hazards) and their effects. It then attributes probabilities to each scenario based on the likelihood, magnitude, and severity of the occurrence. The emphasis in QRA is on formalized, quantifiable data, which inform an organization's regulatory systems and risk management operations and allow preventative action to be taken. QRA requires calculations of two components of risk (R): the magnitude of the potential loss (L), and the probability that the loss will occur (p). In essence, QRA seeks to answer three questions. What can go wrong? What is the likelihood of X going wrong? What are the consequences of X going wrong?

Broadly, the QRA procedure is to

• 1.
  identify and define undesirable end states;
• 2.
  develop a set of disturbances to the normal state for each end state (initiating events);
[Page 406]
• 3.
  identify sequences of events using event or fault trees are (this generates accident scenarios);
• 4.
  evaluate probabilities of these scenarios using all available evidence, past experience, and expert judgment; and
• 5.
  rank scenarios according to their expected frequency of occurrence.

The resulting hierarchical probability scale from a QRA can be useful in evaluating risk for decision making. This enables a more informed and precautionary decision to be reached. QRA has emerged in environmental toxicology as the predominant tool for describing the public health consequences of human exposure to environmental contaminants. Existing situations are measured and compared according to a measure of population health risk. Proposed preventative measures are then compared according to the reduction in population health risk in order to determine the best course of action to mitigate potential detrimental environmental consequences. It is this modeling of quantitative relationships between cause and effects and action and consequence that characterizes QRA.

...