BIREA: Identification and assessment of risks, costs and benefits

Identification and assessment of risks, costs and benefits

Risk, cost and benefit analysis forms the core of the data upon which the Authority will decide whether or not to approve an application. Risks, costs and benefits to the environment may arise both directly from the introduction of individuals of a new organism and indirectly from their effects on ecosystem relationships (including human activities). The applicant must provide sufficient evidence to enable the Authority to make a decision.

Risks and costs

All foreseeable and reasonable effects of the proposal must be identified systematically to ensure that nothing is left unconsidered. Those that are considered likely to have significant effect must then be assessed. The applicant must explain how the risk identification was conducted, and explain the basis on which some risks were eliminated as insignificant. Risk is assessed by combining estimates of likelihood and consequence. Both the magnitude and probability of the adverse effect need to be described for a risk to be properly assessed. In some cases, the likelihood or probability may depend on a complex pathway between the source of the risk and the adverse effect. Risks and costs should be quantified where possible, in either monetary or non-monetary terms. However, quantitative analysis is unlikely to be helpful if there is little data to apply to the problem, if the effect is likely to be highly variable, or where there is uncertainty about the likelihood of the effect occurring. On the other hand, if the potential risk or cost is likely to be large and likely, data should be sought to quantify that risk.

The central issue for every application to introduce a biological control agent will be the risk, and consequences of attack on native and valued introduced fauna and flora. Other effects directly associated with the introduction of a population of the biological control agent might be competition with, or displacement of, resident species, or the effect on predators or alternate hosts. Indirect effects of introducing the biological control agent might include changes in the populations of other species through food webs or tri-trophic effects. Other indirect effects may result from the suppression of the host, for example land instability following weed control. Applicants should identify risks, cost and benefits de novo for each proposed agent.

Benefits and cost-benefit analysis

As with risks and costs, the importance of the benefits is a function of the magnitude of the benefits and the likelihood that those benefits will be achieved. Monetary benefits accrue from reduction in control costs and/or increase in productivity.

The magnitude of benefits must be a marginal estimate, in other words, what is the value of the improvement over and above the current scenario? The likelihood of achieving those benefits is dependent on the maximum predicted efficacy of the biological control agent, and the frequency (spatially or temporally) with which those benefits will accrue.

Cost-benefit analysis can be a useful way of summarising the beneficial effects of a biological control agent over time where there is good information about the expected effects of the biological control agent. Where cost-benefit analysis is used, the expected benefits will commonly be discounted over time, so that short-term benefits are given greater weight than long-term benefits. The discount rate will have a significant effect on the present value of future benefits of biological control agents because in most cases there will be a long lead time before benefits are fully realised, and it may also be a long time before any effect will be observed.

This approach is not mandatory, as a reliable analysis relies heavily on good data and assumptions. Where these are not available, discussion of the benefits under various scenarios is sufficient. Non-monetary benefits can also be captured in this way.

It is advisable to consult the EPA, or submit a draft before submitting the application to ensure that risk, cost and benefit analysis is adequate.