Introduction:
All
activities are risky - they have costs and benefits.
The benefit of breathing is survival but the cost is
a risk of infection.
There is an economic cost of drug consumption for the
drug consumer and often, in the short- or long-term,
a health cost. The benefit may be enjoyment and
stress-relief. There is also a cost and benefit to
society. Drug consumers may risk harming others (e.g.
drug driving, passive smoking) or create health costs
met by the taxpayer. The benefits of stress-relief
may result in benefits to society in reduced health
costs.
There are costs and benefits of drug supply for drug
suppliers
There are costs and benefits of drug production for
drug producers.
There are costs and benefits of regulation for
Government. Regulation aims to maximise benefits
while minimising costs. Where costs are uncertain and
potentially great a Precautionary Principle of
prohibition may be justified. Prohibition of an
activity, both its costs and benefits. Citizens who
obey the prohibition reduce the activity's cost to
zero; citizens who do not comply become criminals,
with the enforcement costs that brings, and the costs
of the activity increase since they are not
regulated.
Stages
of Risk Assessment and Management:
from Strategy Unit's Risk: improving government's
capability to handle uncertainty
0. At
all stages below: Communicate and consult about risk
and response with stakeholders and experts
1. Identify the risks: to and from all stakeholders -
e.g. public, consumer, supplier, producer, regulator
2. Evaluate the risks: costs & benefits; impact
and likelihood; quantity (scale) and quality (e.g.
economic or health, voluntary or imposed);
distributional impact (i.e. do risks impact all
equally?)
3. Assess risk appetite (risk tolerance/acceptance):
of those affected by risk, the public and the
regulator
4. Identify response options, alternative methods of
regulating the risk
5. Evaluate cost-benefit of each response and choose
most cost-effective option (see also Regulation &
policy-making)
6. Implement cost-effective response
7. Review response effectiveness
8. Learn and improve response