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The implication of extreme events on policy responses

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DOI: 10.1080/13669877.2013.794151

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The implication of extreme events on

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Urs Steiner Brandt
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University of Southern Denmark , Esbjerg , Denmark
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 Journal of Risk Research, 2013
http://dx.doi.org/10.1080/13669877.2013.794151

The implication of extreme events on policy responses

Urs Steiner Brandt*

Department of Business and Environmental Economics, University of Southern Denmark,

Esbjerg, Denmark
(Received 26 March 2012; final version received 3 April 2013)
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This paper considers a situation where a real risk exists that requires
precautions, but the public mostly experiences the risk through infrequently
occurring extreme events; this type of risk includes risk from climate change,
international terrorism, natural calamities or financial crises. The analysis shows
that if a risk-mitigating policy is based on the perceived riskiness of that risk, it
will call for disproportionate responses (compared to what the ‘real’ risk sug-
gests) by either under- or over-investing in risk-reducing policies, depending on
the characteristics of the problem, implying significant volatility in the policy
response. This type of response provides at least three challenges to society:
policy cycles where implementation lags behind the actual change in risk, a
lock-in to inefficient technologies and additional costs. Finally, this paper
addresses the question of how the above-mentioned challenges can be managed
through proper risk communication.
Keywords: risk perception; climate change adaptation; comparative risk

1. Introduction
In the wake of the incident at the Fukushima nuclear power plant in 2011, a nuclear
power security expert concluded that the incident effectively showed how secure
nuclear energy actually is. The incident involved a major earthquake and an unprec-
edentedly high tsunami, and yet it was not severe.1 For a nuclear sceptic, however,
this incident provides additional proof that nuclear power is dangerous. Many indi-
viduals, regardless of the expert testimony, feel increasingly uncomfortable with
nuclear power. In several countries, the incident affected decisions on the future of
nuclear power policy (e.g. in Germany and Switzerland, where the latter reacted to
the Japanese disaster by suspending plans to build and replace nuclear plants).2 This
event is, however, not a unique example of an extreme event having real policy
implications: the 9/11 incident triggered major changes in US foreign policy and
increased the public fear of terrorism in many areas of the world. In the aftermath
of 9/11, tremendous amounts of additional precautions and resources were devoted
to mitigate the threat of terrorism (Enders and Sandler 2006a; Sunstein 2006).
The present work focuses on concerns where the riskiness of the underlying
problem is visible to the public because of the occurrence of extreme events.3 For
such problems, this paper seeks to discover the consequences of allowing the public

*Email: usb@sam.sdu.dk

Ó 2013 Taylor & Francis

 2 U.S. Brandt

perception of a risk to influence decisions about the resource allocation for reducing
that risk.
An extreme event is a low-probability, high-impact event. Extreme events can,
more generally, be defined by maxima/minima, magnitude, rarity and/or impact/
losses. E.g. for climate change, IPCC (2012) defines an extreme climate event as
‘the occurrence of a value of a weather or climate variable above (or below) a
threshold value near the upper (or lower) ends of the range of observed values of
the variable’ (IPCC 2012, 3). For most types of events, the likelihood and the size/
impact are negatively correlated (e.g. of the 100 terror attacks with highest number
of fatalities, only 17 had a death toll of over 200, 8 of over 300 and 1 of over 510,
which is the 9/11 attack with 2993 death, see Johnson 2013). For the purpose of
this paper, an extreme event is defined as one that significantly changes public per-
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ception over a period of time.

A central theme of the present research is that the level of resources spent to
reduce a specific risk is at least partially shaped by the public’s perception of the
current risk. According to Salanié and Treich (2009) and Wagner and Zenkhauser
(2012), the risk regulators typically respond to the citizens’ beliefs. More generally,
for many political issues, it is essential that the (affected) public support the pro-
posed project, which Heaney (1993) calls the socio-political feasibility test. Coenen
(2010) identifies several perspectives through which a policy-maker can incorporate
the information possessed by the relevant groups, thereby making competent deci-
sions (and, for the purposes of this paper, the policy-maker can decide if and how
to include citizens’ beliefs). According to the above-mentioned author, the pluralist
approach appears to be the most appropriate for describing risk management poli-
cies on the governmental/state level.
The idea of the current paper is related to Salanié and Treich (2009), who ana-
lyse two polar cases of how a policy-maker could respond to citizens’ beliefs: the
populist approach to risk regulation, where all citizens’ beliefs are important, and a
paternalistic approach, where the decision-maker is assumed to know what is good
for the citizens better than they do (analogous to the managerial perspective). The
approach adopted in this work is more general, in that it considers the policies to
be determined by both the publicly perceived risk and a scientific, evidence-based
estimate of the risk.
The second observation that is employed in the analysis is that the public’s per-
ceived risk is very sensitive to the occurrence of extreme events that can be related
to a specific risk. The psychological mechanism known as the availability heuristic
states that if an extreme event occurs, the availability bias leads individuals to tem-
porarily overvalue the threat from the risk and thereby take temporarily excessive
precautions (Tversky and Kahneman 1973). Recent disasters or heavy media cover-
age are likely to ‘distort’ perceptions of risk (Siegrist, Gutscher, and Earle 2005).
However, if relevant events are not available, the unavailability bias will predomi-
nate, leading to inaction in taking the necessary precautions.4 Burns, Peters, and
Slovac (2012) conducted a time series study on how public risk perception responds
to the current economic crisis. These authors detected a dynamic pattern where risk
perception first responds very quickly but then peaks and decreases, despite an
ongoing crisis. According to the psychometric paradigm (e.g. see Slovic, Fischhoff,
and Lichtenstein 1982), not all events will create the same ‘availability.5 Multivari-
ate factor analysis techniques reveal that two factors dominate: dread and
uncertainty (Slovic 1987). In the application section of this paper, these results are
 Journal of Risk Research 3

used to argue that for climate change, society is likely to be underprotecting itself
due to the lack of availability of the extreme events that trigger the above factors,
while for terror, there will be a tendency toward overprotection. For both problems,
because risk-reducing policy measures are assumed to depend on both public per-
ceptions and scientific estimates of the prevailing risk, if the citizens’ perceptions
are affected by extreme events, resource allocation will tend to be volatile.
The final observation for the analysis in this paper is a significant divergence
between objective (scientifically based) risk analysis and subjective (emotionally
and affect based) risk perception (Slovic and Weber 2002; Slovic et al. 2004).6 Spe-
cifically, the emotionally based system provides an explanation for the large fears
and emotional reactions that we have towards media-transmitted pictures of terror-
ism and how this reaction affects both our revised assessment of present risk
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(threat) and our demand for immediate action in the face of the perceived increase
in the threat.
Combining the above observations, it can be concluded that a policy aimed at
controlling risks to society is likely to be affected by perceived risk. Perceived risk,
in turn, is affected not solely by an analytical estimation of the risk but also to a
varying degree by its availability, which is determined by the occurrence of extreme
events that can be related to that risk. Because the perceived risk does not necessar-
ily match the true risk faced by the public, the consequence will be an investment
in risk-reducing measures that do not reflect the optimal investment given the actual
risk.
The analysis reveals three areas where these types of policy procedures imply
challenges. For policies that are easily adjustable, risk-reducing measures (might)
exhibit cycles where the policy implementation lags behind the changes in risk (e.g.
in counterterrorism policies, see Feichtinger and Novak 2008; Faria 2003). For
polices that are not easily adjustable, e.g. due to high sunk costs, hysteresis and
path dependencies might result in a lock-in to inefficient technologies (Acemoglu
et al. 2012) or in periods with high vulnerability if the polices cannot be adjusted
rapidly enough. Finally, the high volatility in public risk perceptions relative to
more evidence-based risk estimates produces additional costs, e.g. if large invest-
ments in one period are more expensive than the same investment divided over two
or more periods.
The paper is organised as follows. Following this introduction, a model is pre-
sented that formalises how extreme events affect public policy. In Section 3, the
model is applied to terrorism and climate change and the conditions under which
these effects appear in counterterrorism measures and climate policy are discussed.
Section 4 builds on the preceding sections to propose the appropriate risk communi-
cation strategies. The last section concludes the paper.

2. The model
Consider a society (e.g. a country) that is vulnerable to a risk-generating natural or
human-induced problem (climate change, terrorism, a financial crisis, etc.). The coun-
try has the means to reduce its vulnerability to the given problem j by invoking/
employing a risk-reducing policy. The level of this policy is measured by q j. This
policy variable is treated as a one-dimensional policy measure, although risk-reducing
policies consist of a variety of possible policy initiatives. q j is here interpreted as the
increase in the policy measures necessary to reduce the vulnerability (the risk from
 4 U.S. Brandt

the problem) by q j units. Moreover, it is assumed that a country always uses the pol-
icy that is most effective first, effectiveness being measured by the most effect per unit
cost. It is assumed that costs are convex increasing in q j.
The population is negatively affected by the expected damage that the problem
in question might cause. The population in this country has preferences between the
expected damage from the problem and the costs of implementing the risk-reducing
policies.
Let the (identical) individuals be equipped with the following utility function:

u ¼ uðEDðq j Þ; C ðq j ÞÞ ð1Þ

Assume further that u′ED < 0, u′′ = 0 and u′c < 0, u′′c = 0. (The linearity assump-
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tion is only for simplicity.) Let the preferences be unaffected by the changes in per-
ceived damages.
If the policy-maker’s goal is to implement the policy to maximise the citizens’
utility (as described by (1)), he or she should select the level of q j that maximises
(1). The solution implicitly defines q j ¼ qPj , the optimal level of risk-reducing pol-
icy, for a given level of risk perceived by the public regarding the risk generating
issue, only taking the citizens’ preferences into account.
The first-order condition for utility maximisation by maximising (1) with respect
to q j yields the following:

u0 C ED0 q j
qpj : ¼  ð2Þ
u0 ED Cq0 j

Given (2), it is possible to derive the optimal level of protection (risk-reducing

policies). The implication of higher marginal damage (an increase in ED0q j ) is that
q j needs to be increased to restore the optimality condition. Intuitively, when the
marginal expected damage increases (and when the perceived risk increases), then it
is optimal (from the perspective of maximising public utility) to employ more q j.
Essentially, the public is willing to pay more (in terms of reduced consumption) to
have the risk reduced.
The model presented here is intended to incorporate both the difference in risk
perception between the (relevant) scientists and the public and the changes in per-
ceived risk as described above. Consider that the scientists produce the best esti-
mate of the current risk that a given problem presents, based on the best
information available. Such an estimate is denoted EtBG (The exact nature of such
an estimate is not considered here.) Now, at time t, the best estimate is normalised
BG PR
to zero, Et j ¼ 0, and let Et j 2 ½1; 1 be the public perceived risk such that a
PR
higher Et j implies a greater perceived risk (the scientific and public perceptions of
BG PR PR
the risk align when Et j ¼ Et j ¼ 0). An example of how Et j develops after a
single extreme event (EE j ) is depicted in Figure 1.
BG
The notion here is that while Et j is unaffected by the occurrence of an extreme
event (or affected to the extent that it contains information that will alter the best
estimate by, e.g. applying a Bayesian approach), the public perception of the risk of
the problem underlying the extreme event (or perceived to be underlying) is
affected. Formally, allow
 Journal of Risk Research 5

Figure 1. A possible evolution of the perceived risk after extreme events.

PRj PR
Et ¼ Et j ðItj ; It1
j
;    ; Itk
j
Þ ð3Þ
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Itj is an index of the number and strength of the extreme events related to (or
considered to be related to) problem j in period t. If no events occur in period t,
then Itj ¼ 0 . As noted in the literature, public perception reacts to extreme events
to a greater extent than evidence-based, scientific estimates; in this model, this
implies the following:
   
dE PRj  dE BGj 
 t   t 
 j [ j  ð4Þ
 dIt   dIt 

After an extreme event related to problem j (EE j), people tend to ‘over-react’,
while after periods with no experiences of the risk generating issue, people tend to
underestimate the probability, as indicated in Figure 1.7 The perceived risk is trans-
lated into expected damage according to
PR
EDtj ¼ EDtj ðEt j Þ ð5Þ
@EDtj
with PRJ [0.
@Et
PR
Combining (5) with (2), it follows that changes in Et j translate into
BR PR
(monotonic) changes in qt j . In other words, the variation in Et j is reflected in a
BR
(monotonic transformed) variation in qt j .
The pluralist approach is used here to integrate the perspectives of both the
public and the scientists. Therefore, the decision-maker selects the level of risk
mitigation according to the following:
BGj PR
qtj ¼ qtj ðEt ; Et j Þ ð6Þ
@qtj @qtj
with @RPtj
[0 and @BGtj
[0.

The policy-maker still maximises (1) but is assumed to consider both the input
of the scientific community and the risk perceived by the population; in particular,
the scientific and public judgments of the expected risk presented by problem j.
The relative importance of the risk perceived by the public and the best estimate of
the scientific community depends on many factors, e.g. the political position of the
 6 U.S. Brandt

government. Different governments might assign different weights to these two

types of policy influences. Finally, (4–6) result in
p
dqt j
[0 ð7Þ
dItj

When an extreme event occurs, the decision-maker responds by increasing the

BG
intensity of the risk-reducing policy, even in situations where Et j is unaffected by
the occurrence of the extreme event.
A linear version of (6), the politically optimal level of risk regulation for issue j,
can be described as
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PRj BGj
qtj ¼ c j qt þ ð1  c j Þqt ð8Þ
BG
Here, 0 6 γ j 6 1 measures the relative weight of the public perceptions, and qt j
PR BG
is the chosen policy if Et j ¼ Et j . The implication of this policy is depicted in
Figure 2. Here, it is shown that given (2), in cases where the decision-makers base
their risk estimate on a lower value that the scientific evidence suggests, the society
is undersecured; if they conversely base their estimate on a higher value, then the
society is oversecured.
The final analysis in this paper is to determine how an extreme event related to
problem j at time t (EEtj ) affects the selection of a risk-reducing policy. As the liter-
ature reports, the public’s perception is much more volatile than the scientific, evi-
dence-based estimates. This tendency is captured in the model by the following
expression (which follows directly from (4)):8
   
dqPRj  dqBGj 
 t   t 
 j [ j  ð9Þ
 dIt   dIt 

Although our model is mostly static, dynamics are introduced through (3). The
dynamics described in (3) and their influence on policy decisions is best presented
in figures. Consider that, on average, the scientists’ best estimate and the public’s
perception are the same but, as specified in (9), the public’s perception is affected
by individual events to a greater extent than the scientists’. Given (8), the chosen
BG PR
policy lies somewhere between qt j and qt j , depending on γj. The temporary
overreaction followed by an underreaction to the perceived risk relative to the best

Figure 2. How the level of security relates to the risk perception of the public.
 Journal of Risk Research 7

Figure 3. Dynamics of risk policy decisions around extreme events.

estimates translates into a similar temporary overallocation followed by an underal-

location of resources to be applied to risk-reducing policies.
This relationship is the basis for the analysis that underlies Figure 3: when citi-
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zens experience an extreme event that triggers an increase in the perceived risk of
the problem that generated the extreme event, the citizens’ estimates of the expected
damage increase. As a consequence, the effect of the risk-reducing policies
increases (on the margin), which can be observed from (6). An interpretation of (6)
is that when an extreme event occurs, the threat of this problem becomes available
(through the availability heuristic) and is translated into perceived fear, thus creating
a willingness to sacrifice economic well-being (or in regard to terror, civil liberties,
Enders and Sandler 2006a).
The consequences of basing risk-regulation policy in part on the public percep-
tion of risk are the cyclic nature of investments in risk-reducing policies shown in
Figure 3: periods with overprotection are followed by periods with underprotection.
As noted in Salanié and Treich (2009), this populist policy increases well-being but
offers non-optimal protection against the underlying risk from the problem at hand.
In the next section, two case studies will highlight the shortcomings/problematic
nature of these policies compared to a situation where less emphasis is placed on
public perceptions (or at least the volatile component of the public’s perception).
Generally, when policies regarding risk-reducing investments are based on both
public perceptions and scientific evidence, the policy might be more costly, result in
short-term decisions that have unintended long-term effects or result in underprotec-
tion precisely when protection is most needed. The next section provides examples
of these situations.

3. Applying the model: case studies

This section is devoted to applying the model from Section 2 to analyse the policy
response on two major risk-generating problems: climate change and terrorism.
Although the two problems are very dissimilar, a common feature is that the poten-
tial threats stem from the extreme events that these two problems generate, either
extreme weather events or terror attacks.
The polls on climate change and terror in both Europe and the USA show that
the public on average finds these problems to be serious. Gallup – US (2010) finds
that in 2010, 79% of respondents find terrorism to be a serious threat to the US
future well-being, thereby being the most worrying threat. For the environment,
including global warming, 51% of respondents perceived it to be a threat to future
well-being, being number 8 on the list. For Europe, the EU conducted a large sur-
vey on the public perception of risks in the EU (2009). To the question asked about
‘which of the following do you consider to be the most serious problem currently
 8 U.S. Brandt

facing the world as a whole’, 62% of the respondents identified climate change
(second on the list) while 53% found international terrorism to be a serious problem
(third on the list).
Terror and climate change also have, however, different characteristics, which in
particular affect the public perception of the risk stemming from these problems.
The comparison of the problems will be based on the characteristics of the prob-
lems and the way that extreme events are understood to be signals about the true
‘riskiness’ of the problem.

3.1. Climate change

Climate change is a global environmental problem caused primarily by the burning
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of fossil fuels, driven by human needs for energy; however, it is also caused by
land use changes; in particular, deforestation.
An increase in the global average temperature is expected, and as a conse-
quence, the magnitude and likelihood of extreme events is likely to increase.
According to IPCC (2012), a changing climate leads to likely changes in the fre-
quency, intensity, spatial extent, duration and timing of extreme weather and climate
events and can result in unprecedented extreme weather and climate events. Such
extreme events include intensification in droughts, flooding and the frequency of
heavy precipitation. Due to an increase in the mean sea level, an upward trend in
extreme coastal high water is very likely.9 As a direct consequence, extreme events
will have a greater impact on sectors with closer links to the climate, such as water,
agriculture and food security, forestry, health and tourism.
The difficulty in attributing a single extreme event to climate change is that
climatic extreme events are a natural phenomenon. IPCC (2012) argues that the
signals from projected changes in extreme climate events are relatively small for
the coming two to three decades compared to the natural climate variability over
this time frame. Although statistical methods exist that argue about the probabil-
ity that a single events is ‘caused’ by climate change (Peterson, Stott, and Her-
ring 2012), it is a well-observed phenomenon that people have difficulty in
understanding low probabilities (Keller, Siegrist, and Gutscher 2006) and often
predict the frequency of an event based on the availability of the event (accord-
ing to the availability heuristics, see, e.g. Sunstein and Zeckhauser 2011). More
specifically, over time, the signals are assessed to become clearer indicators of a
changing climate.10
Climate change is a so-called stock pollution problem. Greenhouse gases slowly
accumulate in the atmosphere due to human-caused releases of primarily CO2 and
methane. Due to the slow warming of oceans, there is a considerable delay from
the time that emissions accrue until the effect on the climate can be observed (IPCC
2007).
This delay has serious implications for the public perception of climate change.
As a natural consequence, basing the estimates of riskiness on extreme events sys-
tematically underestimates the threat of climate change (see also Weber 2010).
Given the characteristics of the climate change problem, the public’s perception of
the risks of climate change is low because, as discussed in the introduction, the lack
of availability implies inaction (Weber 2010). As forcefully noted by Sunstein
(2006), thus far, no salient event has heighted public concern. In fact, most people
lack personal experiences that would make the relevant risks appear immediate or
 Journal of Risk Research 9

Figure 4. A possible dynamic of policy decisions for controlling risks related to climate
change.

real as opposed to speculative and hypothetical; hence, climate change does not cur-
rently trigger strong emotions.
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PCAP (2012) presents the result of polls performed by seven poll institutes over
the period 2006–2012 regarding the question: is global warming occurring? By sim-
ple visual inspections, up to 2010 all polls uniformly show a decreasing trend in
the percentage of those who believe that global warming is happening, while from
2010 on the trend is reversed and all polls show an increasing trend. Moreover,
over the period 2006–2012, there was no overall increase in the percentage and
finally, in 2012 50–80% believed that global warming is occurring. Several impor-
tant lessons can be drawn from these percentages. First, public perception has been
volatile even though no event or new knowledge from a scientific point of view
supports the trends in the public perception. Secondly, according to Anderegg et al.
(2010), the percentage of climate experts that support the hypothesis that climate
change is anthropocentrically induced is significantly higher than the percentage of
the public that believes that global warming is occurring.11
How would a climate policy based only on scientific knowledge develop over
time? This question has been investigated by Nordhaus (2010, 2011). For three rele-
vant policy scenarios, Nordhaus calculates the optimal trajectory of a carbon price
over time (a uniform tax equal to the carbon price would then be an appropriate
choice of climate policy). For all scenarios, the carbon price is (continuously)
increasing up to 2085.12
As a consequence, it can be expected that EDCC t is very low; extreme events
related to climate change are generally local and very temporary at present. When
this information is placed in the model described in Section 2, the resources that a
society spends to combat the risks associated with climate change can be repre-
sented graphically as in Figure 4. This figure depicts how the average awareness
(publically perceived risk) is lower than the best estimates except after extreme
events. On average, this trend in awareness results in a sub-optimal level of invest-
ment in climate-related polices, but a temporary large change might be expected.13
What is the possible consequence of a situation such as that depicted in
Figure 4? One means of limiting climate change is to reduce emissions, primarily
CO2 (countries have national reduction plans, despite the fact that the problem
needs to be addressed globally), by reducing the CO2 content in energy consump-
tion and from traffic.14 Such policies can include transitioning from coal-fired
power plants to renewable energy production. A distinctive feature of investments
in energy systems is the large up-front investment costs and the long lives of the
investments (Stern 2006). These investments are, moreover, often to a large extent
‘sunk’. The expansion of coal-fired power plants or the construction of a power
plant or large off-shore wind farm will exhibit economic, if not technological, path
 10 U.S. Brandt

dependence, being either extremely expensive or technologically complex to adjust

significantly within several years or even decades.
This tendency is reinforced by the presence of technological ‘lock-in’. Acemoglu
et al. (2012) analyse the presence of path-dependence in the area of technological
development. The article demonstrates that if a company produces an innovation in
a relatively dirty technology, it will also find it more profitable to do so in the subse-
quent periods and will respond less to price effects (e.g. taxes or quota regulations
aimed at providing a price signal for more innovation in clean technologies). The
conclusion is that this technological lock-in leads to technological path-dependence,
which complicates the possibilities for correcting a temporary, non-optimal climate
policy.
Although the climate problem needs to be addressed globally on a country level,
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security can be increased by investing in adaptation measures such as increasing the

height of dams. It can be expected that investment over a series of periods is less
costly than the same amount of investment in a single period. The implication is
that if a policy based solely on the scientific evidence suggests that climate change
will materialise slowly but at an accelerating pace, the optimal investment path over
time will be one of smoothly increasing adaptation levels over time.15 However,
investments that follow this optimal path are distorted by the risk perceptions of the
public. In periods when there is a series of extreme events, public preferences shift
towards increased protection despite the lack of scientific evidence to suggest the
need for an increase in adaptations. These increased costs can be considered to be
the costs of risk management (Brandt 2012).

3.2. Terror
A uniformly agreed-upon definition of terror does not exist. The UN defines terror
as ‘criminal acts, including against civilians, committed with the intent to cause
death or serious bodily injury, or taking of hostages, with the purpose to provoke a
state of terror in the general public or in a group of persons or particular persons,
intimidate a population or compel a government or an international organisation to
do or to abstain from doing any act’ (UN 2004).16 Major recent terror attacks in
New York, London, Madrid and Mumbai fall into this category.17 Terror attacks are
infrequent and mostly unpredictable events, and they quite naturally fall into the
category of extreme events.
What is the likely impact of terror attacks on risk perception? First of all, terror
is intentional because its most frequent main characteristic is to deliberately and
intentionally create fear. According to the psychometric paradigm, intentionally is
the main driving force in perceiving the risk as a dread risk.18 Moreover, terror
attacks are easily understood signals because terror by its very nature is intentional
and generally designed to spread and maximise fear among a much larger group
than that directly affected by the attack. Finally, the signals are often carried by
forceful images that are repeatedly shown in the mass media (e.g. the smoking twin
towers in Manhattan), which, therefore, according to the availability heuristics
hypothesis, elevates the immediate fear and prolongs the state of fear.
These suggestions are supported by observations. A time series study conducted
by Gallup (presented in Block-Elkon 2011) includes both major terror events and
mediated threats, for example, after 9/11,after the invasion of Iraq (beginning in
March 2003), the London terror attack (July 2005) and the 10 year ‘anniversary’ of
 Journal of Risk Research 11

9/11. On all of these occasions, the perceived risk of terror increased significantly.
Not surprisingly, terrorism possesses most of the characteristics that increase percep-
tions of fear. Therefore, although we may not directly experience suffering from a
terror attack, the underlying fear (often mediated though the press) is pervasive.19
The second consequence of being intentional is that terror is unpredictable and
difficult to prevent. The terror prevention measures that are employed create what is
known as a ‘weakest link public good’; that is, the terrorist organisation can exam-
ine a country’s defence strategy and evaluate the most effective way to successfully
launch a terror attack (Sandler 1997; Arce, Kovenock, and Roberson 2012, and ref-
erences herein). These measures presume that every segment of society can be pro-
tected equally, which appears to be unrealistic particularly because the risk a
country faces is unknown (Beck 2006). Another characteristic of terror prevention
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is, as noted by Arce, Kovenock, and Roberson (2012), that ‘For the target govern-
ment, success is defined in terms of security against all possible attacks; whereas
for terrorists one success is often enough to alter the political landscape, airways,
etc.’
Is it possible to describe (predict) how experts will judge the threat of terror
after a major terror attack? For various reasons, the information that a terror attack
carries and its consequences for future attacks is not straightforward. The insights
of the above-mentioned papers suggest the following:

• Major terror attacks might provide new information about threats unknown
beforehand or the capabilities of known groups that were underestimated.
• A terror organisation also exposes itself, and anti-terror measures and intelli-
gence can be directed against that group.
• By its very nature, a terror attack costs many resources to launch. It also takes
time to recruit, train and plan terror attacks, and the terror organisation
requires time to find the weakest link in the defences.
• A rational terrorist organisation will not find it optimal to invest in another
terror attack in the short term. After periods with no terror activities, terrorism
preparedness weakens, while the terror organisation requires time to find the
weakest link in the defences.

Because of the complex interaction between the above factors, it is not possible
to provide a uniform formula for how the experts are likely to re-evaluate the threat
of terrorism after an attack, nor how experts are likely to assess the risk of terror in
subsequent years. However, Figure 5 intends to show two likely possibilities. The
first extreme event (EE1) implies that both experts and the public perceive the risk
from terror to be more imminent. For the expert, the attack can change the estimates
of the capabilities of a specific terror organisation or movement (a situation not

Figure 5. Possible dynamics of policy decisions for controlling the risks related to terror.
 12 U.S. Brandt

unlike 9/11).20 Over time, public perception falls, as explained by the availability
heuristics. For the experts, as new measures are put in place and a new understand-
ing of the threats develops, the perceived risk might fall, but as already discussed,
rational terror originations could regroup and consider new targets.
However, the figure indicates that the overall resources spent to combat terror are
falling over time, while the threat is increasing. The logic of this, which is denoted
as a terror cycle, has been described in several papers. Enders and Sandler (2006a)
argue that after a terrorist attack, public pressure results in more safeguards, implying
that there is less terror followed by less pressure and fewer safeguards and, therefore,
a higher probability of another terror attack. Feichtinger et al. (2001) analyse a
model of terror cycles in the context of the tourism industry. As a country invests in
tourism, it attracts an increasing number of tourists, making the industry a more
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likely target for terrorism, which scares away tourists, which then reduces the interest
of terrorists. As terrorist incidents decline, the government again begins to invest in
tourism, and the cycle continues. Feichtinger and Novak (2008) observe cyclical
behaviour in the sense that when counterterrorism policies continue to increase, the
costs of launching terror attacks also increase so that terror attacks decline; con-
versely, when counterterrorism policies are reduced again (due to their limited bene-
fits), terror activity increases due to the now decreased cost of this activity. There is
a lag in the response through the counterterrorism policies, which the authors attri-
bute to the government’s reaction to terrorist activities.21
In the model presented in the current paper, these effects are reinforced by the
way in which public risk perception enters the policy decision-making process, cre-
ating even longer lags between terror activity and the proper investments in risk-
reducing policies. In Figure 6, this type of situation is shown.
In the model presented in the current paper, these effects are reinforced by the
way in which public risk perception enters the policy decision-making process, cre-
ating even longer lags between terror activity and the proper investments in risk-
reducing policies. In Figure 6, this type of situation is shown. After the second
extreme event, the experts perceive that the risk is falling because they know that
the terror organisation has exhausted its resources or that the organisation has been
exposed and even neutralised. Still, the public perceived risk can be expected to
increase due to the renewed availability of the terror threat.
The main conclusion of this analysis of the perceived threat of terror is that if
policy is focused too heavily on public perceptions and public perceptions are pri-
marily based on experience as described in Section 2, then the unfortunate situation
occurs that when security is most needed, it is the most difficult to implement. This
situation is portrayed in Figures 5 and 6.

Figure 6. An example of a ‘terror cycle’.

 Journal of Risk Research 13

4. Risk communication
A natural means of aligning the risk assessments of the public and the scientific
community is through risk communication. As noted by Smillie and Blissett (2010),
communicating risk is complex and involves different types of communicators, from
scientists, the media, government agencies, industry and consumer groups, each of
which has its own agendas to pursue. Traditionally, risk communication focuses on
providing information to the public. In Figure 7, the possible information exchange
channels in risk communication are presented.
The solid line reflects that the primary communication is between the risk com-
municator and the public, with the potential for feedback from the public. This view
of risk communication is expressed by the WHO (2009), for example, where risk
communication is defined as an interactive process of the exchange of information
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and opinions between those who assess risk (the relevant scientists), risk managers
(politicians and businesses) and other interested parties. It is a process that will cre-
ate a mutual understanding between the governing and the regulated to align inter-
ests and goals.
However, the flow of information is complex. Macnaghten and Jacobs (1997)
(in the context of sustainability) state that a widely used method of information pro-
vision uses indicators as tools for communication.22 Not all indicators communicate
equally well, however. These authors identify two types of indicators: cold indica-
tors, which serve the managerial purpose of technological accuracy, and hot indica-
tors, which resonate with the public because they strike an emotive chord in terms
of recognition and concern. However, using hot indicators will only be useful if the
risk perception does not sufficiently reflect the ‘real’ risk. Here, the scientific com-
munity is the primary information provider (and also the risk communicator).
We adhere to the notion that, in essence, the government is the risk communica-
tor but might receive information from various sources. The main lesson from
Macnaghten and Jacobs (1997) in this context is that risk communication should be
intelligent, in that all information (identified by the arrow pointing to the risk
communicator) should be taken into account. This requirement will be discussed for
the two cases presented here: climate change and terrorism.

Figure 7. Channels for information exchange in risk communication.

 14 U.S. Brandt

4.1. Risk communication and climate change

A recurring conclusion in the literature is that, on average, the public focuses
too little on the risk of climate change. A strategy to increase public awareness
about the threat of climate change is to increase fear. According to Visschers
et al. (2012), affect has a central role in people’s risk perception and decision-
making. It is, therefore, important that the risk communicators know how risk
communication can influence affect or more specific emotions. Scare campaigns
can have some effect on, e.g. health promotion. Scare campaigns are based on
appealing to anxiety or fear. The mechanism is to stimulate a sense of danger
in the target audience by attempting to produce fear with the aim of promoting
precautionary measures and self-protective actions (O’Neill and Nicholson-Cole
2009). According to O’Neill and Nicholson-Cole (2009), the experiences from
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health and marketing-related disciplines cannot, however, be directly transferred

to climate change. Personal experience and thus the identification with the prob-
lem are missing in the case of climate change because the consequences of cli-
mate change are often perceived to be impersonal and distant. Moser and
Dilling (2004) note that when an individual is confronted with fear, it initiates
the desire to control this fear. Because individuals cannot be expected to control
climate change by changing their behaviour, these fears must be controlled inter-
nally, resulting in denial and apathy. Therefore, intimidation on the climate
change issue may have the opposite effect of that intended in the longer run if
scare campaigns are used.
In marketing, the importance of raising awareness has long been recognised
within what is called ‘attention economics’ (Davenport and Beck 2001). A well-
planned communication strategy to disseminate the potential risks of climate
change would take advantage of the insight from this strand of the literature.
The information may be ‘framed’ by the relevant decision-makers, such that it is
perceived more clearly by the receiver and thus produces the conditions for the
implementation of effective climate policies. Moser and Dilling (2004) draw on
the well-known prospect theory (Kahneman and Tversky 1979) and its results
regarding the difference in how we perceive gains and losses. They argue that
the policies that have a high success rate, for example adaptation investments,
are best framed in a way that highlights the benefits of the policy. The reason
is that we often choose the certain result compared to the risky one in the pres-
ence of potential, but uncertain, larger gains (i.e. the gain from doing nothing if
climate change is not occurring). Less certain choices (i.e. where the success
rate is lower) should be framed so that the losses are highlighted. In this way,
the decision-maker can use proper framing to improve the potential for imple-
menting the desired policies.
A second mechanism for intelligent risk communication in this area is to pro-
vide the public with a sense of control by describing the options available for indi-
vidual actions and thereby improving the identification and local commitment to
climate change. A key objective of this process is to make the regulated party a part
of the process and provide a sense of ownership over the project. The government
can create incentives such that it is in the consumer's best interest to be climate-
friendly or can provide grants for ‘proper climate conduct’ or disincentives for sub-
optimal climate solutions.
 Journal of Risk Research 15

4.2. Risk communication for terrorism

Major terror attacks generate huge psychological distress among a potentially very
large number of individuals. Using the policy model derived in this paper, this dis-
proportionate reaction relative to the actual changes is unfortunate. This disconnect
suggests that a proper risk communication strategy regarding terrorism should
attempt to reduce this affect-driven fear.
The literature offers different means for effective risk communication in the
presence of this persistently high level of public fear. The provision of better infor-
mation regarding the real risks is one option. Slovic (1987) mentions attempts to
educate the public by providing quantitative risk estimates for a variety of hazards
(such as comparing the death toll from 9/11 to fatalities from road accidents) and
thereby improve people’s intuition about risk. However, according to, e.g. Sunstein
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and Zeckhauser (2011), fear leads to probability neglect, and it is by no means

guaranteed that this strategy would reduce the fear felt by the public. These authors
are consistent with Slovic (1987), who finds that riskiness means more to people
than probabilities and the number of fatalities. Sunstein and Zeckhauser (2011)
advocate a more systematic investigation into how to communicate risk in these cir-
cumstances. The government should, according to these authors, determine which
means are the most effective for reducing fear. They propose measures that are
highly visible, low in cost and perceived to be effective. Greenberg and Babcock-
Dunning (2012) conducted a survey to better understand why some people worry
(and why some groups systematically worry more) about terrorism, and they pro-
pose ways to reduce this worrying. Their finding is that a (relatively) large minority
(the study is of the USA) hold a continuously high level of terror-related worry,
while in general (overall), the immediate distress from 9/11 has declined gradually.
This minority has a disproportionately multi-ethnic composition. The authors argue
that one reason for this high level of worry is that this group in particular feels vul-
nerable because they have fewer personal resources to secure themselves against
terrorism and, therefore, feel that they lack control over the problem. This argument
suggests that one means for reducing the disproportionate terror-related concern is
to allow the most worried individuals to regain their feeling of control over the
problem.

5. Conclusion
This paper demonstrates the potential for a number of problematic consequences
when the risk perceived by the public partly determines a country’s risk and secu-
rity policy. Because any democratic process needs to address the public’s reaction
to policies, this paper also provides means for communicating risk to the public.
For the risk of terror, this paper described and explained the likely policy
reaction after a terror attack, which results in ‘response overshooting’. For climate
change, however, the analysis identified the reasons behind ‘response undershoot-
ing’, the generally too low level of resources devoted to reduce the risk of climate
change. The consequences of these policies are economic (in the sense of more
expensive policies) and periodically too high and too low protection. For both terror
and climate change, it is possible to identify likely situations where relatively high
protection is achieved in periods with relatively low risk and relatively low
protection in periods with relatively high risk.
 16 U.S. Brandt

A well-planned communication strategy is necessary. This communication needs

to be tailored towards the specific characteristics of the problem. For climate
change, scare campaigns will most likely result in more neglect of the problem
because individuals lack the means to control the consequences of the problem. A
better strategy is to provide the public with a feeling of control by suggesting areas
where individuals can behave in a more climate friendly manner. For terror, which
intends to provoke dread risk, the best strategy appears to be the application of
fear-reducing measures by e.g. providing individuals with a sense of self-protection.
A lesson that can be drawn from the analysis is that public involvement in risk-
reducing policies appears to be a universal strategy for providing the public with a
more realistic sense of the potential risks stemming from a given problem.
The general nature of the analysis comes, however, at a price because it builds
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on a number of simplifying assumptions. One issue is that the public is treated as a

single individual, while in reality, public risk perceptions might very well vary sub-
stantially between individuals. The current model is designed to take an average
view because this is assumed to indicate the general pressure that public perceptions
have on the overall political direction of a country. Moreover, policy is a complex
interplay between multiple factors and stakeholders, including lobbying organisa-
tions. These special interests attempt to exploit extreme events to progress their par-
ticular agenda, which can have either positive or negative feedback for the chosen
policy after an extreme event. Finally, there is interplay between the risk perception
of one problem and the occurrence of extreme events related to another problem
(through the availability heuristics). It is reasonable that the occurrence of a finan-
cial crisis might reduce focus on both climate change and terror issues.
However, the general results of this paper are valid if the logic that the analysis
builds upon is valid: public perceptions are systematically influenced by extreme
events, while scientific, evidence-based estimates are not influenced to the same
extent. Finally, risk and security policy is influenced by inputs from both.

Notes
1. According to Nakahara and Ichikawa (2013), nearly 20,000 died as a consequence of
the 9.0 earthquake and tsunami in Japan in 2011. These consequences can be compared
with the Fukushima accident, which carried with it enormous economic damage without
significant human casualties. The economic damage was largely due to the mandatory
and voluntary evacuations in the radioactively contaminated communities (Hayashi
2012).
2. Evidence of this claim can be found in Wittneben (2012), who attributes the outcome of
regional elections in Baden-Württemberg and Rheinland-Pfalz to the Fukushima incident
because the election was held two weeks after the incident and put more anti-nuclear
parties in power. According to Wittneben (2012), the voters came out against nuclear
power, primarily driven by extensive media coverage.
3. Examples where the public becomes aware of potential risks through extreme events
include climate change (Lorenzoni and Pidgeon 2006; Lorenzoni et al. 2006), interna-
tional terrorism (Sunstein 2006), natural calamities (Slovic and Weber 2002) or financial
system vulnerability (e.g. the collapse of the US housing market, [Blankenburg and
Palma 2009]).
4. Sunstein and Zeckhauser (2011) analyse the effect of the (un)availability bias with
respect to climate change and (Sunstein 2006) for a comparison of the availability of ter-
ror and climate change.
5. Ropeik (2010) lists 13 such factors; among these, the important characteristics are
whether a person has control, whether the problem is natural or man-made, whether it is
 Journal of Risk Research 17

uncertain, if it is possible to personify the problem (or the mechanisms that create the
problem), and whether it is catastrophic or the person thinks it could happen to him/her.
6. Slovic and Weber (2002) present an ordering of the perceived risks from 30 activities
and technologies. Although ‘experts’ rank nuclear power as number 20, the ‘League of
Women Voters’ and ‘Active College Students’ rank it as having the highest perceived
risk. Their explanation for this deviation is that experts base their estimates on technical
estimates of annual fatalities, whereas laypeople base their judgments on other hazard
characteristics.
7. There is, however, no guarantee that, on average, the expected publicly perceived risk
equals the scientific estimates; systematic biases might exist. As an example, Weber
(2010) concludes that the public’s perceptions of climate change over time appear gener-
ally to reflect a reduced concern and greater volatility than warranted by the scientific
evidence. This issue is discussed more thoroughly in Section 3.
8. The numerical results also indicate that extreme events that reduce the perceived risk
(cold winters for the perception of climate risk, the killing of Bin Laden for the percep-
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tion of terror risk) are more volatile than the scientifically verifiable risk.
9. For a precise definition of the various probability terms, see IPCC (2012). An extreme
weather event is an event that is rare within its statistical reference distribution at a par-
ticular place. The IPCC assessments are based on the assumption that no effective cli-
mate agreement is implemented.
10. Whether or not an extreme climate event becomes more likely over time depends on the
choice of reference. If we, however, also define extreme events in terms of magnitude
(damage caused), then extreme events are likely to increase over time.
11. Note that only a subset of respondents that believe that global warming is occurring also
consider the causes for global warming to be human activity. E.g. Gallup – USA (2010)
reports that in 2010, 50% were answering that global warming was due to human activi-
ties while 46% answered natural causes.
12. The three policy scenarios are as follows: not allowing the global average temperature to
increase by over 2 °C, implementing the pledges from the Copenhagen accord and
finally, the optimal path (from an economic point of view). This is not to say that these
paths are independent of the occurrence of new information about the costs and damages
from climate change.
13. In Denmark, it has long been recognised that the drainage capacity of the major cities
cannot handle the extreme rain that is expected as a result of climate change, but invest-
ments to increase this capacity have been almost non-existent. This policy, however,
changed dramatically after the massive flooding in parts of Copenhagen in the summer
of 2011. See, e.g. EEA (2012).
14. Brandt (2003) considers the notion of unilateral actions – the fact that some countries
have reduction targets – to be ‘leadership by example’ and to affect the overall reduction
effort.
15. The current scientific understanding is that the probability of extreme events related to
climate change (flooding, droughts and storms) is expected to be positively correlated
with the magnitude of the temperature increase (IPCC 2007).
16. Further definitions; see Enders and Sandler (2006a).
17. Several databases exist that report all terror incidents, see, e.g. http://www.start.umd.edu/
gtd/.
18. The intentionality of terror is associated with the fact that terrorist organisations are
regarded as rational (see, e.g. Enders and Sandler 2006a; Feichtinger and Novak 2008;
Shughart 2011) and that they exhibit maximising behaviour by balancing the costs and
benefits of terror attacks (Enders and Sandler 2006a). According to Shughart (2011), ter-
rorists are rational in two important means–ends senses. Every terrorist faces a budget
constraint and must deploy resources cost-effectively, allocating the available resources
over time and space so as to maximise terrorism’s net returns, in whatever form those
returns are expected to materialise. Second, terrorists respond rationally to the measures
taken to counter them.
19. Fear is particularly pervasive after massive terror attacks such as those that affected the
cities of New York, Madrid, London or Mumbai.
 18 U.S. Brandt

20. According to Enders and Sandler (2006b), even though there was a general recognition
from experts that the threat of fundamental terrorism was raising up until 9/11, there was
only minimal evidence that a major attack would hit a high-income country. Therefore,
9/11 was unexpected, and before it occurred, most experts did not consider that its dev-
astating consequences were possible. The view about the potential scale obviously had
to be revised after 9/11.
21. According to Pillar (2011, 2), US policy has been distorted due to high fear and trauma
after 9/11: ‘high disproportionate share of US resources has been directed to this (Al
Qaeda) one group’.
22. Examples of frequently applied indicators are as follows: GDP as an indicator of eco-
nomic performance, the ecological footprint for environmental performance, the Human
Development Index as a proxy for social performance, or the number of killings in ter-
rorist incidents.
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