Wednesday, July 22, 2009

Engineering and Systemic Risks

On a basic level, an engineer's primary job is to manage risk. The problem is that all current methods of engineering risk management deal exclusively with individual projects. Unfortunately, there is no forum for a discussion of systemic risk.

Systemic risk was exposed recently in the financial system. The Great Recession, as I've heard it called. In this case, financiers were engaging in business dealings and signing a separate contract with an insurance provider to pay costs in case of a default – a default credit swap. Taken as individual transactions, each one was well-managed and almost risk-free for the holder of the assets. All of the credit rating agencies were in agreement, these companies had managed their risk very well. But when you look at the whole system, where was the risk going? Was it just disappearing into thin air?

The answer, as we found out, was that the risk was just being hidden by complicated instruments. Maybe it is an appropriate time to discuss whether this same process is at work in the field of structural engineering. By minimizing risk to individual projects are we amplifying the risks to the system?

Engineers owe responsibilities to different parties in a complicated web of liability. I think the best clarification of what we are trying to accomplish is stated in the ASCE's Code of Ethics (1997) Fundamental Canon #1:
CANON 1.
Engineers shall hold paramount the safety, health and welfare of the public and shall strive to comply with the principles of sustainable development in the performance of their professional duties.
We act in the best interests of our clients and the public welfare, but it is not always clear what actions we should take to meet these requirements. Our developments do not exist in a vacuum, our designs affect the environment to a great degree. Looking at a quick example in civil engineering, there is plenty of evidence that installing levees down the Mississippi River valley has had some negative consequences:
  1. Lack of regular flooding has reduced alluvial floodplain buildup, reducing natural barriers to storm surges
  2. Development alongside the river has been encouraged, as the risk is perceived to be much lower than it actually is
As one can see, this is a good example of increasing systemic risk solely because of reducing risk to a bunch of individual projects. When the system breaks down, a huge amount of development is affected.

Likewise, we can see a similar process occurring in structural engineering projects. Engineers are partly responsible for some of the most intense greenhouse gas emissions on the planet. Buildings today use almost 1/2 of all energy consumed in the world. Construction activities contribute to C02 emissions directly and indirectly. Concrete production alone (because of cement) accounts for 5% of annual worldwide carbon emissions.

Engineers are culpable because we do little to reduce the concrete consumption on a project. Concrete is used for shallow foundations, retaining walls, shearwalls, and sometimes just as dead weight. Concrete isn't the only material that will work, but it is the easiest best solution. Some building codes won't even allow an engineer to specify anything else for foundations. We are so intolerant of risk that we require reinforced concrete in a part of the project that typically won't cause a problem even if it failed.

This matters because we are continually raising the quantity of greenhouse gases in our atmosphere. At some point, sea levels will rise, storms will gain strength, wildfires will be more severe, and global conflict will erupt over limited resources. This is the systemic risk that structural engineers face right now. If we are serious about meeting our ethical obligations to protect the public welfare then we need to change our habits, and quickly.

Engineers and the building code industry needs to find out why we are specifying so much concrete and provide guidance on other options. Specifying high levels of fly ash or slag cement is a good start, but since we'll need to be carbon neutral soon then we need to go further. Expensive technologies might help the US, but we must figure out solutions that are scalable and useful in the developing world.

I don't think there is a silver bullet solution for this problem, but I do think it is important for engineers to remember that they have obligations that extend beyond the boundary line of their latest development.

Labels: , ,

0 Comments:

Post a Comment

<< Home