Based generally on main discourses on precaution and on the most relevant theoretical models of economic interpretation of the precautionary principle, we examine critically whether this principle can contribute as an operational framework to improve environmental risk management and, in particular, the investment decision process in complex projects under uncertainty conditions. A methodology for the practical application of the precautionary principle to the regulation of the decision process and the analysis and evaluation of uncertainties, risks, benefits and costs of investments is proposed, with an extended and multidimensional conceptual and instrumental sustainability perspective. Context and scientific risk analysis, alternative strategic options and their impacts and evaluation and choice models are considered, along with stakeholder participation and use of all available information. A case study is developed in order to test the proposed methodology. The case selected is the Alqueva Dam Project. With this test, the limitations of the studies as well as of the decision-making process that led to the acceptance of the Project are explored, and the potentialities of the proposed methodology are discussed.

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