Risk vs. Consequence vs. Cost vs. Benefit

Take a moment to consider a decision.  Doesn’t matter what decision, just think about a recent decision.  It could be as simple as whether to grab lunch from the deli or eat your leftovers.  It could be as complex as deciding whether to support a particular politician.

Everyone, everyday makes decisions and many of us go through a complex thought process regarding which option to choose.  I’ll note that some criminals lack this system, which prevents them from considering consequence or risk in their decision making process.

Risk – exposure to the chance of injury or loss; a hazard or dangerous chance

Consequence – the effect, result, or outcome of something occurring earlier

Cost – the price paid to acquire, produce, accomplish, or maintain anything

Benefit – something that is advantageous or good; an advantage

You can explore the other definitions as you will, but these definitions will do.  Now, these are all concepts that should need no definition, but I often find that the most common concepts are the ones hardest to pin down.

Risk is the chance of something happening.  We buy insurance against the risk of an accident.  If one doesn’t purchase insurance, then one must accept the consequence of not having it in the case of an accident.

Cost in an economic sense also includes such ideas as the things we didn’t purchase because we purchased something else or the gain we would have made had we invested the money instead of buying something.  These are called opportunity costs.  A quick example: If I choose to go to a movie, then that $20 is not available to buy a video game (which might give me the same pleasure for a longer period), food (which won’t last as long, but be needed for survival), auto fuel (it’ll last a while, but may be required to get to work or the store), or saving it (which will earn a stunning .25% interest).  Those are the costs of choosing to go to a movie.

Benefit is what you get out of it.  If it’s a really good movie, then I may feel my $20 was well spent. 

Here’s a great example.  With gas prices hitting $4 a gallon, my company has said that we can all work one day a week from home.  That will save me about 2 gallons of gas a week.  But is that worth the cost?  If I stay at home, I’ll have to have the entire house cooled to something reasonable.  Right now the daytime setting is 82F, I’d need it to drop to 78F to really be comfortable and not sweat all day long.  So, would it be cheaper to go to work or stay home one day a week?  It’s something I’ll have to investigate.

Some people that are willing to accept consequences can get away with more risk, which may mean more benefit for the same (or lower) cost.  That’s fine for investing or deciding which movies to see or whether cable TV is worth the money (in many cases, it’s not). 

But when we’re talking about global effects, it’s not such an easy decision.  Of course, now we’re talking about global warming and the like.  We’re already in serious trouble.  It can easily get worse.  So, what’s the solution?  That’s where there is lots of debate. 

Is the risk and cost of nuclear worth the benefit?  Or is the lower cost and lower risk of renewables worth their potential consequences (no wind and no sun)?

Consider the above factors.

The risk of a nuclear accident is low.  But if it happens (as we have recently seen), it is a disaster, including the complete loss for a decade of the power that plant produced.  Is that risk worth the benefit (which is minimal in my opinion and basically boils down to can renewables supply base-load power or not)?

Renewables are faster, simpler, easier, cheaper (see here) with no risk.  OK, a wind tower might fall over.  I’d much rather have that risk than the much lower risk of a nuclear meltdown.  That’s one I’m not willing to accept.

I have made my decision.  It’s subject to change, but so far, no one has presented sufficient evidence to change my mind.  Nuclear beats all fossil fuels.  Renewables (including hydro and geothermal) beat nuclear.

Nothing beats global warming.  It’s happening, it will continue to happen.  The only way to mitigate the damage is to stop using fossil fuels as quickly as possible.  Renewables allow this, nuclear does not.  It’s that simple.

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