short paper

Science of the Total Environment 407 (2009) 5283–5288

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Science of the Total Environment

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Better environmental regulation — contributions from risk-based decision-making

A. Gouldson a, A. Morton b, S.J.T Pollard c,⁎ a University of Leeds, Sustainability Research Institute, School of Earth and Environment, Yorkshire, LS2 9JT, UK b London School of Economics, Operational Research Group, Houghton Street, London, WC2A 2AE, UK c Cranfield University, Collaborative Centre of Excellence in Understanding and Managing Natural and Environmental Risks, Cranfield, MK43 0AL, UK

⁎ Corresponding author. Tel.: +44 0 1234 754101; fax E-mail address: [email protected] (S.J.T. Polla

0048-9697/$ – see front matter. Crown Copyright © 20 doi:10.1016/j.scitotenv.2009.06.013

a b s t r a c t

a r t i c l e i n f o

Article history: Received 25 October 2008 Received in revised form 9 June 2009 Accepted 17 June 2009 Available online 23 July 2009

Keywords: Risk Modern Better Regulation Policy Environment Agency

Internationally, pressure is being exerted on governments and regulators to develop modern forms of regulation that deliver more for less, and in better ways. We discuss the ways in which one large regulator, the Environment Agency for England and Wales, has responded to such pressures by implementing risk- based approaches to regulation. After exploring the context for key elements of risk-based environmental regulation, we consider the evolving influence of such approaches. We discuss the impacts against the UK Government's principles for better regulation and the key criteria for policy evaluation, before considering some of the challenges: the need to i) understand the best practice and promote consistency in risk-based regulation; ii) develop reliable, responsive forms of risk assessment and monitoring; iii) build capacities for responsive risk regulation; iv) evaluate the influence of different regulatory styles; and v) better understand the potential role of the private sector.

Crown Copyright © 2009 Published by Elsevier B.V. All rights reserved.

1. Introduction

Driven by concerns about public sector expenditure and private sector competitiveness, many commentators have been critical of the role that regulation plays in modern economies. Gunningham and Grabosky (1999) encapsulate these criticisms suggesting that regula- tions ‘are not effective in delivering their purported goals; or efficient in doing so at least cost; nor do they perform well in terms of other criteria such as equity, administrative viability or political accept- ability’. However, command and control regulation remains an important policy instrument, and broader forms of regulation are emerging, centred, for example, around market-based or information- based instruments. As a consequence, pressure is being put on governments and regulators to develop better (or more modern) forms of regulation that deliver more for less and in better ways. Risk- based, or more perhaps accurately, risk-informed regulation is one contributor to this debate (e.g. Rothstein et al., 2006).

Internationally, there has been considerable emphasis on the need to develop better regulation in recent years. The OECD, for example, first issued its influential recommendations for regulatory reform in 1997. These evolved into the OECD Guiding Principles for Regulatory Quality and Performance in 2005 (OECD, 2005). At a European level, the European Union initiated a drive towards better regulation in 2002, and has published three strategic reviews of better regulation since 2006 (European Commission, 2009). The UK has been an active

: +44 0 1234 751671. rd).

09 Published by Elsevier B.V. All ri

participant in these international debates and domestically, the UK government's Better Regulation Task Force has been an influential voice within the government since its creation in 1997.1 It has called for regulators to adhere to its principles of better regulation by ensuring that regulations are targeted, proportionate, consistent, transparent and accountable.

As a regulator that employs ca. 12,000 people and has an annual budget of N£1 billion, the Environment Agency has been developing its response to the better regulation agenda for many years. It has done this most notably through the adoption of risk-based approaches to regulation in its broadest sense, that seek to focus scarce regulatory resources on the highest risks and worst performers, thereby, it is hoped, securing sustainable environmental outcomes, delivering public sector efficiency gains and reducing business burdens.

After examining recent experiences with risk-based regulation in the Environment Agency, this commentary highlights some key gaps in the knowledge base and some of the future challenges. We conclude by considering the extent to which risk-based approaches have enabled, or could in the near future allow the Environment Agency to continue to improve the implementation of the principles of better regulation and the performance (i.e. the efficacy, efficiency, equitability, administrative viability and political acceptability) of environmental regulation.

1 Its growing influence is reflected in the adoption of the Legislative and Regulatory Reform Act of 2006 and creation of the Department for Business, Enterprise and Regulatory Reform in 2007.

ghts reserved.

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2. Risk-based environmental regulation

Reflecting the broader international agenda on better regulation, risk-based environmental regulation has been explicitly promoted in the UK for over tenyears (Her Majesty's Inspectorate of Pollution,1995; Parliamentary Office of Science and Technology, POST (1996; Half- acree, 1998). As well as being driven by the better regulation debate above, it also gained momentum through the calls for better risk governance in Government departments (Interdepartmental Liaison Group on Risk Assessment, 1998; OXERA, 2000; Hampton, 2005; Strategy Unit, 2002) and agencies following events such as the BSE (House of Lords, 2000) and foot and mouth crises, and the associated concerns about public trust in Government decisions on risk (House of Lords, 2000; ESRC Global Environmental Change Programme, 2000; Green Alliance, 2000; House of Lords, 2006). Given that it has evolved rapidly since its adoption, it is our view that there is now sufficient operational experience among regulators (Her Majesty's Inspectorate of Pollution, 1995; Environment Agency, 1997; European Commission, 1998; Department of Environment, Transport and the Regions, 1999, 2000) to reflect on the contributions that risk-based environmental decision making (Department of the Environment,1995; DETR and the Environment Agency, 2000) is making towards modern or better environmental regulation.

The Environment Agency has wide-ranging regulatory responsibil- ities for flood risk management and environmental protection. It adopts environmental risk assessment to inform its decisions at the strategic and operational levels. Strategically, the Agency leads Government on the application of environmental risk assessment, with the government Department for Environment, Food and Rural Affairs (Defra) setting the policy context and direction (Defra, 2002). At the operational level, the EnvironmentAgency requires environmentalriskassessments to inform its decision making and, by virtue of its generalised powers, may request a risk assessment of any operation it considers that may have a detrimental impact on human health and the environment. Guidance on environmental risk assessment and management is in place and implemented (Pollard, 2001; Pollard et al., 2002); several Agency- administered regimes are noted as being risk-based (e.g., contaminated land, waste management, flood risk management, process industry regulation, and river basin management); and risk-informed regulatory processes are in place for targeting proportionate regulation, securing efficiency gains and informing workforce (resource) planning.

Many of the risk-informed regulatory processes are based on the application of what is known as ‘operator and pollution risk appraisal’ (OPRA) (Her Majesty's Inspectorate of Pollution, 1995; Environment Agency,1997; Environment Agency,1997). OPRA seeks to assign a relative rankingtoregulatedsites accordingtotheirinnate hazardandthecapacity of the operator to manage the likelihood of these hazards being realised — the operator's demonstrable performance (competency, maturity) in risk management. OPRA thus assumes that environmental risk management is, by a large part, determined by the competency of an organisation to manage the hazards associated with its' operations. OPRA is designed to enable the Agency to focus its attentions on higher risks and worse performers, for example by informing the choices that managers make over how often front-line regulators should visit premises and what the focus of an inspection should be. It may, in some circumstances help its officers to decide how much discretion theyshould apply during visits and how to balance their regulatory effort between issues (events occurring now) and risks (potential future issues). The Environment Agency's initial work on OPRA provided valuable insights into the role of risk-based regulation, the choice of regulatory styles and tools, and the influence these can have on driving business behaviours.

3. The influence of risk-based environmental regulation

Regulated businesses have largely welcomed approaches that are risk-based — these are seen to make sound business sense (Confedera-

tion of British Industry, 1998; Confederation of British Industry, 1999). For good operators, these initiatives are likely to result in investments that would be made anyway on the grounds of responsible corporate governance, and are thus supportable in scientific and business terms. The Agency's current operator performance assessment seeks to rank the maturity of an operator's environmental performance by reference to key attributes. Many regulated sectors (e.g. United Kingdom Offshore Operators Association,1999) have similar risk-based approaches inplace to guide operations, reduce business exposures and lessen business interruption losses. ‘Best-in-class’ organisations are better at managing risks wisely, learning from failure, and they exhibit resilience (robust- ness to shock) and agility (adaptive management and forward-looking) in response to an evolving business climate. Specifically, they balance business risk and opportunity in a mature fashion to ensure that exposures are minimised and strategic competitive advantage is secured. Organisations competent in risk management recognise that this maturity of capability is not secured solely through having risk frameworks, risk assessment manuals, audit trails, risk champions and risk registers in place. They assess their risk management maturity (MacGillivray and Pollard, S.J.T. What can water utilities do to improve risk managementwithin their business functions? An improved tool and application of process benchmarking, 2008; IACCM, 2003) because it: (i) helps formalise their appetite for risk; (ii) makes more explicit the role of the group risk manager; (iii) provides opportunity for evaluating the implementation of risk management on the ground — that is, a reality check against high-level, corporate statements on risk; and (iv) it builds sustained corporate value. The risk management benchmarking tools now applied within high reliability sectors have value in the context of self-regulation for high performing sectors.

Securing evidence (Pollard et al., 2008) for the environmental outcomes mediated by modern regulation requires that causal links can established between regulatory styles and the environmental improvements they deliver (National Audit Office and Better Regula- tion Executive, 2007). Among the issues and observations raised by the Hampton implementation review of the Environment Agency's progress (Better Regulation Executive and National Audit Office, 2008)are that:

(i) the Environment Agency has made encouraging progress in implementing the Hampton principles;

(ii) better regulation is certainly in the language of the organisa- tion, but not yet embedded throughout its culture;

(iii) there appears to be a scope for OPRA to be used more effectively to incentivise compliance and inform risk-based interventions;

(iv) the Agency is currently unable to demonstrate a causal link between day-to-day regulatory activities and outcomes;

(v) it is not clear whether it is prioritising its resources on those sectors, emissions or activities which are most damaging to the environment (para 95);

(vi) the quality and impact of inspections seem to depend on the competence and confidence of individual inspectors — some inexperienced staff appear to lack the confidence to exercise balanced risk-based judgements;

Establishing causality in this sense (iv, above) is by no means straightfor- ward given the confounding factors influencing environmental change and the multiple actors with this common interest.

The relationship between evidence and the assessments of risk that such evidence informs is well established in certain fields, but less formalised in the environmental sciences. It is of growing interest to environmental risk analysts. Weighted lines of evidence may support (or otherwise) the relationship between regulatory style and outcome (McPherson et al., 2008). Weight-of-evidence approaches (Krimsky, 2005) use influence diagrams, evidential support logic, and Bayesian belief nets (Pourret et al., 2008; Schum,1994) as visual aids to support the presentation of cause and effect. There is an established literature for weight-of-evidence assessments in the fields of public health

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medicine (Hrudey and Leiss, 2003), forensic science and radioactive waste management, with some applications to environmental risk and a history of using Bayesian methods. Individual environmental risk assessments frequently make use of data, concepts and assump- tions for which a range of evidence of varying quality exists. In using assumptions to support risk assessments, risk analysts frequently need to select between competing theories (e.g., low dose extrapolation), between a range of individual baseline studies (e.g., arsenic in drinking water) or from a palette of future environmental scenarios (e.g., climate change). Such analyses involve evaluating complementary and potentially conflicting lines of reasoning, the direction and strength of which must be assessed and weighed in aggregate, in support of a specific qualitative or quantitative line of argument. Assembling such evidence within a framework of precaution, whilst also guided by requirements for proportionate levels of intervention, has long been a requirement of the safety cases prepared for radioactive waste disposal. Equally the approach has recent application to the manage- ment of exposures from engineering nanomaterials.

Alongside tools to integrate evidence, effective environmental decision making needs to face up squarely to key value trade-offs. Value trade-offs are ubiquitous in regulation. Examples include those between efficacy, efficiency and equity, or public good and private profit, or in cases where regulatees face complex choices between visible and reassuring remediation strategies versus invisible but possibly more effective ones (for example, monitored natural attenuation for contaminated groundwaters; harbour sediment dredging and remediation). For these types of decision, the Environ- ment Agency has been a sponsor of systematic multicriteria (or multiattribute) decision analysis (MCDA; Belton and Stewart, 2002; Dodgson et al., 2000) which provides a framework for making trade- offs explicit. Agency guidance on best practicable option appraisal for radioactive waste disposal at nuclear sites (Environment Agency and Scottish Environment Protection Agency, 2004; Egan et al., 2002), for example, recommends nuclear operators undertake a participatory multicriteria appraisal exercise as part of the choice of disposal technology. The rationale offered is that this not only ensures the regulatee takes into account the views of local stakeholders in the disposal options, but that it also provides a framework for a discussion between regulator and regulatee. This is in line with experience in other countries, where multicriteria approaches have been used in heavily regulated environments as a device to make explicit and balance competing demands from a range of stakeholders, for example by the energy companies BC Gas and BC Hydro in Canada (Keeney and McDaniels, 1992, 1999; Hobbs and Horn 1997). However, there are a range of different philosophies of how MCDA (broadly conceived) should be applied, particularly for environmental applica- tions (Renn et al., 1993; Gregory et al., 1992) and the question of what works best in a regulatory setting seems to be an open one.

Finally, as to the application of different regulatory styles, the adoption of a risk-based approach has enabled the Agency to engage with firms in a more responsive way. Although regulators have been using discretionary powers for many years, OPRA has given the Agency a more robust way of generating evidence on risk that can be used to support the adoption of different styles in a relatively clear, consistent and transparent way. When coupled with a transparent enforcement policy, this has enabled the Agency to adopt a sanctions- based style for higher risks and worse performers (called for by central government through the Hampton and Macrory Reports; Hampton, 2005; Macrory, 2006), and a more cooperative compli- ance-based approach for the lower risk and better performers (Gouldson, Gouldson, 2004a,b). In theory (Ayres and Braithwaite, 1994), such an approach can deliver targeted and proportionate regulation in a more consistent, transparent and accountable way, satisfying the Government's principles for better regulation. It also delivers efficiency gains for regulators, who are able to focus their resources more effectively, and for the more compliant operators

who may be regulated less intensively. As long as the basis for risk- based decision making is communicated effectively, it can also enhance stakeholder trust in, and therefore the political accept- ability of, environmental regulation. This interactive aspect of regulation is one of the critical aspects of regulatory decision making. Understanding this relationship requires drawing on a range of insights from a number of academic disciplines. In public administration, for example, the idea of ‘relational distance’ has been helpful: the argument is made, where inspectors are drawn from a different background from inspectees, that they are more likely to take a tough sanctions-based approach, and where they are drawn from a similar background, they are more likely to take a gentler compliance-based approach (Hood et al., 1999; Bevan and Cornwell, 2006). Formal approaches to examining this interaction, particularly in the area of monitoring and enforcement, have attracted attention from environmental economists in the UK and US (see the extensive collection of readings in Russell 2003). Despite the volume of work on this issue, and attempts by such analysts in countries such as Germany (Avenhaus 1994) and Denmark (Hansen et al., 2006) to develop usable tools based around available practice and data, we are not aware of similar tools having been passed into routine operational use in day-to-day management in the UK.

4. Challenges with risk-based regulation

There is, therefore, an accumulation of experience in the design and application of risk-based regulation in the Environment Agency and an ongoing programme of policy-oriented research that supports the Agency's initiatives in this field (Table 1). Although the outcomes of risk-based approaches have yet to be subjected to rigorous evaluation, there is a general belief that risk-based approaches lead to better regulatory outcomes.

When considered against the UK government's principles for better regulation, risk-based approaches are seen as the main way of moving beyond a ‘one size fits all’ approach, and as delivering more targeted forms of intervention. However, it is not explicitly clear that risk-based approaches are applied by reference to the same set of overarching principles across different domains (i.e. the regulation of the different risks associated with climate change, flooding, radio- active waste, toxic pollution etc.), at different levels (i.e. senior managers taking strategic decisions, front-line managers taking operational decisions, front-line regulators taking ‘street level’ decisions) or in different sectoral (i.e. commercial, industrial, agricultural) or geographical areas of Agency operation. Furthermore, while schemes such as OPRA make the basis for regulatory decisions more transparent and accountable to regulatees, it is not yet clear that risk-based approaches have made regulatory activities more trans- parent and accountable to the public, despite considerable efforts to develop new forms of engagement and communication (Irving et al., 2007).

When considered against the standard criteria for policy evalua- tion, it is assumed that risk-based approaches lead to more efficient regulation, for the public sector as scarce regulatory resources can be applied in a more targeted way, and for the private sector as business burdens for the better performing firms and sites are reduced through lighter touch regulation. It is hoped that it leads to more effective regulation as it increases the incentives for compliance through the prospect of lighter touch regulation, and the disin- centives for non-compliance through the prospect of more intensive regulation and the imposition of higher sanctions. Because of these assumed incentives, risk-based approaches are popular with politi- cians and businesses, but there has been concern amongst broader stakeholder groups that better regulation actually means less regulation and that the distributional impacts of risk-based approaches are not yet clear.

Table 1 Recent agency-funded research on risk-based regulation.

Research question Addressed by Report number Date

How should we manage conflicts in expert opinion on risk? Understanding risk cultures. Supporting consistency in environmental risk assessment. CEH workshop report.

E2-064 2002

What opportunities exist to align risk-based regulation with corporate initiatives on business risk management?

Dames and Moore review of current initiatives in corporate risk management.

E2-056 2002

How should we compare environmental risks of strategic importance?

Reviews and methodology for strategic and comparative risk assessment. National Centre for Risk Analysis and Options Appraisal-Galson Sciences case studies. Review of comparative risk assessment tools.

E2-041 SC050030 2002 2007

How operator environmental performance and environmental risk are recognised in the regulatory.

Article 10 of the revised Eco-management and Audit Scheme regulation requires member states to take steps to ensure that the work of EMAS verifiers and the regulators is not duplicated. This report indicates what work has been undertaken in other member states in this regard.

P6-005 2002

How sound are the Agency's environmental / business risk criteria in order to ensure its practicality, robustness and credibility.

Tenaco Limited report. E2-055 2003

Does societal concern lead policy makers to develop more stringent risk management objectives and standards?

Report of a one-day workshop. SC030032 2004

How do the characteristics, functions and approaches to influencing used by special interest groups impact the Agency's work?

University of Surrey. Study aims to assist staff, particularly at the local level, to engage effectively with them as a part of their regular activities and around contentious issues.

SC020067 2004

How should we involve stakeholders in risk assessment–risk management decisions?

National Centre for Risk Analysis and Options Appraisal — University of Birmingham study.

SC000009 2004

What does internal Agency staff understand by risk-based regulation?

Environmental Policy, Risk and Forecasting internal questionnaire. Internal audience only

2007

Does risk-based compliance assessment support the principles of modern regulation?

RMC study and case study report. SC040042 2007

What futures might the Agency utilise to evaluate its own business risks against?

A set of four (updateable and risk-based) scenarios (for the 2050 s) for the Environment Agency to improve the robustness of its future planning by providing a credible, consistent tool to aid decision making processes that will be supported by a set of robust indicators.

SC050002 2007

Can we secure better, more effective risk-based decision making?

Cranfield University and Environmental Policy study. Methodology developed for assessing flagship risk-based decisions in Agency in response to Hampton Implementation Review.

SC070055 Ongoing

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A fuller and more rigorous evaluation of the extent to which risk- based approaches secure positive outcomes, as measured against the criteria above, would test these assumptions and strengthen the evidence base for their application. It could provide important feedback to enable institutional learning within the Agency and further enhance the transparency and accountability of, and therefore trust in, risk-based regulation. Research to this effect is now underway within the Agency. There are a number of more specific challenges facing those implementing these approaches:

i) Understanding best practice and promoting consistency in risk- based regulation

The Environment Agency is not alone in adopting risk-based approaches. Private sector organisations engaged in activities such as insurance, auditing and certification, technology supply and business development clearly have significant levels of expertise and experi- ence. Regulators in other countries and in other domains also have relevant insights that could inform the development of a best practice model of risk regulation, perhaps most notably from the Health and Safety Executive. Potentially, both public and private sector bodies in the UK have data sets that could be combined to develop a more integrated risk regulation framework. The Environment Agency could benefit from reviewing other models of risk management and risk- based regulation in such private and public organisations. Finally, there is a diversity of experience within the Agency that could be evaluated to develop a best practice model of risk-based regulation that could be applied more consistently across the Agency. Initiatives in all of these areas would help to convince the Agency's key constituencies and stakeholders that it understood and was consis- tently applying best practice in risk-based regulation. A valuable initiative is the ongoing Agency research into monitoring the effectiveness of risk-based decisions, and the collation of Agency projects where risk-based decision making has been at the heart of the decision process.

ii) Developing reliable, responsive forms of risk assessment and monitoring

Clearly risk-based approaches rely on risk assessments and ongoing monitoring. Some measures of risk are routinely assessed and monitored in formalised processes that provide a transparent and defensible basis for risk-based decision making. However, other more subjective or experiential measures of risk are harder to measure in a formal way, and there are ill-defined issues about how different stakeholders might meaningfully participate, and how different forms of risk perception or tolerance should be taken into account. Equally unclear is the extent to which risk data is time and context specific, and whether existing forms of monitoring are sensitive enough to detect subtle but ultimately extremely important changes in risk management capacities or cultures in regulated firms. By developing new risk assessment and monitoring techniques that respond to these challenges, the Agency may be able to enhance the efficacy, efficiency and equitability of risk-based approaches. A critical step forward has been the Agency's work on strategic risk assessment (Pollard et al., 2004) and its attempts to better characterize environmental harm through comparative risk assessment (Environment Agency, 2005). This ongoing risk policy research is likely to continue to inform the Agency's strategy and form the basis for assessments of efficacy and efficiency.

iii) Building capacities for responsive risk regulation

As well as requiring appropriate forms of monitoring, the Agency needs to build on its existing capacities for risk-based decision making. Given the nature of the available evidence, the significance of uncertainty and the range of competing risk perceptions, stronger and possibly more open, inclusive and accountable frameworks for multicriteria or multiattribute decision making are needed. One of the key challenges is to resolve the tensions between the pragmatic need for rapid, responsive and evidence based decision making

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alongside call for more open, inclusive and deliberative decisions. Trade-offs between the speed or efficiency, the quality or efficacy and the fairness or equitability of risk-based decision making need to be better understood and addressed. Finally, the Agency will be continually challenged to ensure that it has resources that can be rapidly redeployed, and the agility to switch between regulatory styles in response to changing levels of risk. By building its capacities to act in these ways, the Agency would be able to respond to the competing pressures that it commonly encounters in a well informed and balanced way.

iv) Evaluating the influence of different regulatory styles

While a limited body of research has considered the influence of national styles of regulation (Vogel, 1986; Gouldson, 2004a,b) there is little published insight into the influence that different regulatory styles can have when applied in combination. For example, one might argue that intensive regulatory scrutiny is the main driver of compliance in better performing firms, and may under some circumstances prevent worse performing firms from developing the capacities and cultures needed to manage risk and improve performance. More research is needed on the extent to which different styles in combination can build capacities, strengthen cultures and change behaviours among operators and business sectors. This could enable more targeted and tailored approaches to regulation to emerge that improve environmental outcomes and reduce business burdens.

v) Understanding the role of the private sector

Increasingly, it is acknowledged that regulatory agencies do not have all of the powers, resources and information needed to regulate risks effectively. Indeed, some have suggested that we are witnessing a shift from state-centred regulation to decentralised forms of govern- ance, where powers are dispersed in broader networks of public, private and civic actors (Black, 2001; Gouldson and Bebbington, 2007). However, the range of roles that private actors such as insurers, consultants, trade associations, business development agencies, standards agencies and regulated firms can play in achieving public interest goals has yet to be fully investigated. A key issue is whether, and under what conditions, regulators might transfer its responsi- bilities to the private sector. An obvious example relates to the role of private regulations such as environmental management systems standards, where the Agency has considered giving ISO14001 certified sites a lighter touch. However, research has questioned the extent to which ISO14001 guarantees improvements in environmental perfor- mance (Dahlström et al., 2003), and there are major concerns about the accountability of private sector organisations and their capacity to regulate firms they have a commercial relationship with. Even where these can be addressed, there remain concerns about transaction costs and risk as it is not clear that basing aspects of the regulatory process on complex relationships between regulators and a potentially wide range of private actors would be any cheaper or more reliable than continuing to rely on the Agency to deliver risk-based approaches. Being clear on this would enable the Agency to better understand when and under what conditions it may be appropriate to delegate some of its powers to private actors.

5. Conclusions

Risk-based approaches are widely employed within the better regulation agenda (OECD, 2006). They can be used to shape regulatory interventions and prioritise preventative controls (Department for Communities and Local Government, 2007), hopefully generating better (and in particular more effective and efficient) outcomes. Within this paper, we have reviewed existing experiences with risk- based approaches and highlighted some of the challenges that need to be addressed if risk-based approaches are to contribute fully to the

realisation of modern or better regulation, together with improved environmental outcomes.

We adopt preventative risk management because we seek to avoid the unwarranted incidents that could lead to environmental harm. Though advocates of the benefits of risk-based regulation, we sound in closing a note of caution on what we perceive to be a creeping economic rationalism within regulation. When designed well, piloted and implemented with feedback, risk-based regulation can provide a sound basis for distinguishing greater risks from lesser ones, and for investing resources in risk management proportionate to the risks posed. However, these regulatory processes may also incur risk, unless the consequences of resource trade-offs are fully understood and, for certain consequences, guarded against. In other words, whilst risk- based approaches promise better regulation, if they prioritise efficiency over efficacy they also risk contributing to regulatory failure with potentially significant impacts on human health and the environment. We therefore suggest that risk-based approaches should be explored, but in a precautionary way where reductions in the efficacy or reliability of regulation are not risked in the pursuit of efficiency gains.

Acknowledgements

This contribution was funded by the Environment Agency's Modernising Regulation Science Programme. The authors thank Chris Booth, Mark White and Phil Irving for the discussions that have informed this manuscript. The views expressed are the authors' alone.

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