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Engineers, Planners, Economists Study Terror Risk - 2004-08-24

The rise of terrorism has led to a new field of study that is drawing engineers, policy planners and economists to questions of homeland security. Analysts who met recently in Los Angeles say terrorism is something we must live with but careful assessment and planning can lower the risk.

They came to the University of Southern California (USC), home to the new Center for Risk and Economic Analysis of Terrorism Events. The center gets its funding from the U.S. Department of Homeland Security, and examines such critical networks as the U.S. electrical power grid, and transportation and communications systems.

Similar programs based at Texas A & M University and the University of Minnesota are looking at threats to agriculture, and food protection.

James Moore of USC says part of the work involves assessing costs and benefits.

"We're trying to get a handle on better economic decision-making," said Mr. Moore. "Terrorist events are expensive. Mitigation is expensive. How do we protect ourselves at a price we can afford?"

Mr. Moore teaches engineering, policy and planning, and he exchanged ideas at the recent conference with people like Howard Kunreuther, who studies risk management at the University of Pennsylvania's Wharton School of Business.

Professor Kunreuther says the challenge in boosting security is to coordinate the parts of many interdependent systems, where a single weak link can lead to disaster.

For example, food that passes through many hands faces contamination at any point in the process, and a single defective component can destroy a mechanical system in which all of the parts are interdependent.

"In supply chains, the fact that a defective part or defective item can be transmitted and transported through the system and create much larger failures, is precisely what we mean by interdependency," he explained. "And in fact, our work was stimulated by looking at the Pan Am 103 crash back in 1988. And we realized that Pan Am had no ability to protect itself against that crash given that it was not inspecting transferred bags."

The bag with an explosive device was first loaded in Malta, transferred to a Pan Am feeder plane at the Frankfurt airport, and placed on Pan Am 103 at Heathrow Airport, London. The bomb was set to explode at 8500 meters, which it did above Lockerbie, Scotland, killing 259 passengers and 11 people on the ground.

The analyst says that airlines, public utilities, and computer networks are just a few of the many systems threatened by terrorists.

He says companies and governments have incentives to ensure security, but the incentives may not be sufficient. Some may decide it is cheaper to take the risk than to pay for security upgrades. The analyst believes that government must provide oversight in protecting critical infrastructure, while industry and professional groups can help by setting standards.

"It would be very nice to have everyone do things on their own and make their decisions without having to worry about others," he added. "Given the fact that there is this interdependency, you cannot entirely rely on the private sector to do this. You need public-private partnerships and it may be very important to have certain kinds of standards and regulations, as we found after September 11."

Before the terrorist attacks of September 2001, many of these engineers, scientists and policy analysts studied natural disasters, such as floods and earthquakes. Today, they are also applying their methods to the study of the risks of terrorism.

There are important differences, says James Moore of USC. Natural disasters are random, but terrorists have an objective, and their objective, he says, can change in response to our actions. For example, improvements in airline security may prompt terrorists to look for easier targets.

He says there is also a difference in how experts plan for risk. National defense is often planned in secret. And even risk assessments in the insurance industry are withheld from competitors. But academic research, says Mr. Moore, is open.

"It means a different way of proceeding for us. The work we do is not secret, but one of the questions we've had to ask ourselves is, to what degree is it sensitive? To what degree are we informing our opponents by talking about these problems? Well, our gamble is that we will do a better job of responding to their current objectives and any of their new objectives if we're abler to talk to each other. I think that's a gamble we're going to win," he explained.

A number of universities, including USC, are training a new generation of analysts to study the costs and consequences of terrorist attacks, and to find cost-effective means of preventing them. Beginning this year, USC will offer a Masters of Science degree in System Safety and Security, with specialization in such areas as environmental threats and data protection.