[en] This paper provides an analytical basis for characterizing key differences between two perspectives on how to estimate the expected damages of low probability - high consequence events. One perspective is the conventional method used in the U.S.-EC fuel cycle reports [e.g., ORNL/RFF (1994a,b]. This paper articulates another perspective, using economic theory. The paper makes a strong case for considering this, approach as an alternative, or at least as a complement, to the conventional approach. This alternative approach is an important area for future research. I Interest has been growing worldwide in embedding the external costs of productive activities, particularly the fuel cycles resulting in electricity generation, into prices. In any attempt to internalize these costs, one must take into account explicitly the remote but real possibilities of accidents and the wide gap between lay perceptions and expert assessments of such risks. In our fuel cycle analyses, we estimate damages and benefits' by simply monetizing expected consequences, based on pollution dispersion models, exposure-response functions, and valuation functions. For accidents, such as mining and transportation accidents, natural gas pipeline accidents, and oil barge accidents, we use historical data to estimate the rates of these accidents. For extremely severe accidents--such as severe nuclear reactor accidents and catastrophic oil tanker spills--events are extremely rare and they do not offer a sufficient sample size to estimate their probabilities based on past occurrences. In those cases the conventional approach is to rely on expert judgments about both the probability of the consequences and their magnitude. As an example of standard practice, which we term here an expert expected damage (EED) approach to estimating damages, consider how evacuation costs are estimated in the nuclear fuel cycle report