Risks Related to Hydraulic Developments

In course

Description

This lecture covers the risks associated with hydraulic developments, including economic, technological, and human risks. It discusses categories of risks, operational risks, geological risks, and dam safety. The instructor presents case studies such as the Taum Sauk project violations and penalties. The lecture emphasizes the importance of preliminary risk analysis, likelihood, consequences, and mitigation measures. It also explores the concept of risk reduction and the ALARP principle. Various tools and methods for risk assessment, such as fault trees, event trees, and Hazus software, are explained. The lecture concludes with a discussion on tangible and intangible losses, the calculation of risk consequences, and decision-making processes in the face of low-probability high-consequence events.

Official source

https://mediaspace.epfl.ch/media/0_srkrotbo

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Risk

In simple terms, risk is the possibility of something bad happening. Risk involves uncertainty about the effects/implications of an activity with respect to something that humans value (such as health, well-being, wealth, property or the environment), often focusing on negative, undesirable consequences. Many different definitions have been proposed. The international standard definition of risk for common understanding in different applications is "effect of uncertainty on objectives".

Financial risk

Financial risk is any of various types of risk associated with financing, including financial transactions that include company loans in risk of default. Often it is understood to include only downside risk, meaning the potential for financial loss and uncertainty about its extent. A science has evolved around managing market and financial risk under the general title of modern portfolio theory initiated by Harry Markowitz in 1952 with his article, "Portfolio Selection".

Operational risk

Operational risk is the risk of losses caused by flawed or failed processes, policies, systems or events that disrupt business operations. Employee errors, criminal activity such as fraud, and physical events are among the factors that can trigger operational risk. The process to manage operational risk is known as operational risk management.

Foreign exchange risk

Foreign exchange risk (also known as FX risk, exchange rate risk or currency risk) is a financial risk that exists when a financial transaction is denominated in a currency other than the domestic currency of the company. The exchange risk arises when there is a risk of an unfavourable change in exchange rate between the domestic currency and the denominated currency before the date when the transaction is completed. Foreign exchange risk also exists when the foreign subsidiary of a firm maintains financial statements in a currency other than the domestic currency of the consolidated entity.

Risk-seeking

In accounting, finance, and economics, a risk-seeker or risk-lover is a person who has a preference for risk. While most investors are considered risk averse, one could view casino-goers as risk-seeking. A common example to explain risk-seeking behaviour is; If offered two choices; either

50 as a sure thing, or a 50% chance each of either

100 or nothing, a risk-seeking person would prefer the gamble. Even though the gamble and the "sure thing" have the same expected value, the preference for risk makes the gamble's expected utility for the individual much higher.