Considering the development and diffusion of any new technology in the marketplace necessarily involves some recognition of risk. However, for setting policy agenda, it is very useful to distinguish among different types of risks, especially where the technology presents a new process for existing economic activities or involves the expanded use of current economic resources. This is because the influence of extraordinary risks is likely to be much more important given the greater range of uncertainties presented to market decision-makers. Many new biomass technologies being considered currently for the production of energy involve extraordinary risks because the processes are nonconventional and require major market changes for commercial success. In this paper, we identify different types of risks discussed in the literature, and consider how the different classes of risk can be better assessed and managed by biomass program managers.
