Screwing up the risk assessment: how best to protect our children?

This anecdote bought to mind the words of Nobel Prize Winner in Economics, Thomas Schelling "This idea that costly actions are unwarranted if the dangers are uncertain is almost unique to climate. In other areas of policy, such as terrorism, nuclear proliferation, inflation or vaccination, some 'insurance' principle seems to prevail: if there is sufficient likelihood of sufficient damage we take some measured anticipatory action."

What this all illustrates is our ability to understand the POSSIBILITY of what might happen but not the PROBABILITY that it will. No doubt that every over-protective paranoid parent and jobs-worth social worker will point to the absolute numbers of victims of child-abuse to support their concerns. What they will not tell you is that the probability of abuse under the above circumstances is too small to measure. Afterall, if you want photos of your kids and their friends invite them round to your house once a year. These events are called birthday parties. D'uh.

I recently renewed my home insurance and this story got me thinking. Maybe we should look at the risk of having our homes burn down through the distorted lens of excess "uncertainty" and ask - why bother? Afterall it isn't certain that our house will burn down.... It seemed to me that we have a system more obsessed with protecting our children against child-abuse than protecting them from Climate change and Peak Oil. The former is possible but improbable. The latter two are not only possible they are probable with a certainty of 95 to 100%. The difference is only our perception of the risk and this perception is partly based upon cost. Home insurance is cheap, not taking photos costs you nothing but post-carbon living is expected to cost us all dear (regardless of evidence to the contrary).

What is our risk assessment when it comes to the risk of our home burning down? Afterall, there are always other houses. Why bother? But then again - just look at the statistics for the number of Businesses who fail to start up after a fire destroys their premises. If you consider your "home" to be a house and property extending beyond the bottom of your garden, you can quickly see that maybe, just maybe, this is the only home we'll ever have.

A thought-experiment: look at it through the eyes of the fire-risk-denial community. They would tell you that there is no proof of fire actually existing. We have seen a lot of smoke but where is the proof of actual fire? How many of us know of anybody whose home actually burnt down? On that anecdotal evidence alone we wouldn't bother to insure our homes would we? In fact we would be better off sticking those insurance premiums in the bank and allowing the interest to accrue for several hundred years so that, just in case an actual fire happens, then we have something put by. Just in case. Afterall - insurance is just gambling isn't it?

Aaaah... But your mortgage provider requires you to have insurance to cover their investment. But, do you know what? If you petition and lobby hard enough then maybe the rules can be changed. Heh presto: fire isn't a risk and house insurance unnecessary. I am not sure the Insurance industry would take a lot of notice though. It doesn't matter how much "evidence" you show them of the non-existence of fire they will only point out the millions they pay out every year to unlucky home-owners whose homes burnt down. No doubt your mortgage provider would probably take this as pretty good evidence of fire being a non-trivial risk threatening their investment in your home.

Say you met a man down the pub and he says to you "fire doesn't exist" and "house insurance is a scam by the insurance industry" what would you say? In THIS reality you would move quietly to the other end of the bar and hope the loony leaves the room. In our actual reality of the Earth's biosphere & natural resources we buy the guy a drink and laugh at the ridiculous delusions of those guys that dress up as firemen. In the alternate reality of Global Warming & Peak Oil we would rid ourselves of fire men, fire engines and fire stations. Following this logic to its conclusion and we would probably close down the hospitals as we would all stop believing we would ever get sick.

This is nuts. You insure your home because it is the right thing to do. You fit the smoke alarms to protect your children's lives in the same way you protect them from strangers. And why wouldn't you? You don't need to babble incoherently about fire risk like it is some bizarre fixation. You just do it because it is natural to expect that a fire CAN happen and if it does happen it could destroy everything you hold dear.

The bottom-line is that we are all ill-equipped to assess risk. We overprotect our children against risks that are infinitesimal (and I write that as a parent). We think nothing of protecting our homes and we consider this protection to be perfectly rational - and it is. But when it comes to all the evidence of real risk to our children and our homes from Peak Oil and Climate Change... Well, we haven't got a clue. We simply are not armed to deal with this sort of threat. It is enough to keep you awake at night.

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