I'm trying to understand the difference between epigenetic and environmental factors. For example, if gene A increases the risk of lung cancer by 50% and smoking increases the risk by another 75% when combined with gene A (just throwing out numbers) person X now has a higher chance of developing lung cancer. However, if for example, certain epigenetic factors are inhibiting the expression of gene A than that 50% higher genetic risk has now decreased because those high-risk genes aren't being fully expressed. The environmental risk factor of smoking still plays a role but it too could be decreased because that 75% increased risk was associated with gene A being fully expressed and not inhibited by epigenetic factors. Am I thinking about this correctly?
If I understand you correctly what you are saying is
There is envrionmental variance and epigenetic variance underlying the phenotypic variance. There can even be a covariance between the envrionment and epigenetics.
Yes, this is true. You might want to have a look at this intro post to quantitative genetics.
Note, there are several definitions of epigenetics. Epigenetic effects are some kind of factors that affect phenotypic variance and that are external to the DNA sequence. Often we think of modification directly on the nucleotides on on the histones (such as a methylation on the histon tail) but we sometimes also extend this context to include all the stuff that is the in the zygote or sometimes even further. In its broadest sense, the term "epigenetics" would be a synonym of "environment".