Page - 101 - in Loss and Damage from Climate Change - Concepts, Methods and Policy Options

4 TheRiskandPolicySpace forLossandDamage… 101 Box4.2Definingacceptableandunacceptable risks foraccident risks inSwitzer- land This example distinguishes different levels of accident risk acceptance as specified in the Swiss IndustrialAccidentRegulation, building on various inputs and procedures. The acceptable risk area demarcated in green and aggregating small risks (lowextent ofdamage) isdefinedand regulatedbyspecificationsmade in theSwissLabourAct. Beyond the transition zone (marked in yellow), risks are considered not acceptable (catastrophic, large-scaleaccidents)and identified in red.Here it is the (national-level) political decision-making process, building on analytics, but also other inputs, that determine riskareasas (non)acceptable, thusputtingemphasison rollingoutaproper democratically-legitimated process formanaging risks and appropriate riskmanage- mentactions. Fig.4.8 Definingacceptableandunacceptable risks foraccident risks inSwitzerland. SourceWBGU(1998) AsonepromisinganalyticalcomponentofaCRMapproach,theconceptandprac- ticeofrisk layeringhasseen increasingattention(Mechleretal.2014;Mechlerand Schinko2016;SchinkoandMechler2016).Risk layering involves segmenting risk intoacceptable, tolerableandintolerable layersandallocatingrolesandresponsibil- ities toreduce,financeoraccept risks.Wesuggest tobuildonriskanalytics in terms ofariskportfolioapproachthatbreaksdowntotal risk(asdeterminedbyprobability and impacts/losses) into4distinct layers: (i) a layer for frequent risks for actionon risk reduction, (ii) amedium layer of risks,where risk reductionwill be combined with insurance and other risk-financing instruments that transfer residual risk; (iii)