Volume 9, Number 4
December 2000

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Centre for Studies in Risk and Regulation

In November 2000, The Fraser Institute launched a new Centre for Studies in Risk and Regulation. The Centre's goal is to research the science and economics behind risk controversies in order to inform Canadians about the costs of regulations intended to protect human health and the environment.

"The costs, economic and otherwise, of particular policies intended to reduce risks, are not given proper consideration in the policy-making process, resulting in the danger that these well-intentioned policies might actually reduce public well-being. The Centre for Studies in Risk and Regulation will attempt to redress this balance by focusing on sound science and considering the costs, as well as the benefits, of the policies intended to protect Canadians," says Laura Jones, director of the new Centre.

As income and living standards have increased, tolerance for the risks associated with everyday life has decreased. "Concern over smaller and smaller risks in society, both real and imagined, has led us to demand more regulation without taking into account its real impact" says Jones. "Regulations to address one threat often inadvertently introduce other, more serious threats."

In other cases, expenditure to reduce a risk could save more years of life if spent reducing other risks. For example, an increasing amount of government regulation in Canada is devoted to reducing risks associated with transportation. However, according to Statistics Canada, 40 women die in commercial air travel accidents annually. By contrast, 5,000 women die each year of breast cancer.

A one percent reduction in the deaths due to breast cancer will save more lives than a 100 percent reduction in deaths due to air travel. If some of the resources currently spent to reduce the risk of air travel were instead devoted to breast cancer reduction, we would likely save more lives. "Governments are not regulating risk rationally, in part because they are responding to the agendas of interest groups, which are reinforced by media coverage" explains Jones.

The Centre plans a series of publications on current risk controversies, including a guide to the science of global warming, a primer on the science and economics of genetically modified foods, and a booklet of environmental indicators. The Centre for Studies in Risk and Regulation will also publish a major study on the cost of regulatory compliance.

"Many Canadians are not aware that regulatory compliance inflates the prices of the goods and services that they buy. In fact, regulation is estimated to cost every family of four over $11,000 annually. This is only slightly lower than the income tax of $11,247 paid by a family of four with a $50,000 income," says Jones.

The Centre's first book, Safe Enough? Managing Risk and Regulation, argues that governments can save more lives by regulating smarter and that in some cases, regulations to address one threat can actually introduce other, more serious threats. The book, with contributions from noted public policy analysts and economists, focuses on the importance of basing decisions about risk regulation on sound science and economics.

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