What are Scenarios and why use them

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What are Scenarios and why use them?

• Monika Zurek
• MA Scenarios Group TSU
• FAO, Rome

ASB Scenarios Training Workshop, Chiang Mai, Nov
17-23, 2004
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Overview of the talk

• Looking into the future
• What are scenarios?
• Why use scenarios?
• How have scenarios been used in the past

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Looking into the future

• Out of curiosity
• For scientific exploration
• For decision-making
• Decisions are based on expected outcomes and the
• trade-offs they imply
• Decisions involve uncertainty about how the
  future will unfold
• For planning purposes/strategic planning exercise

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Sources of Uncertainty when thinking about the
Future
Ignorance
Understanding is limited
Surprise
The unexpected and the novel can alter
directions
Volition
Human choice matters
Source P. Raskin
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Methods for looking into the future

• Predictions are seen by the public and decision
  makers as things that will happen no matter what
  they do.
• Forecast is the best estimate from a particular
  method, model, or individual.
• Projections are heavily dependent on assumptions
  about drivers and boundary conditions they often
  assume that these will not change. Projections
  lead to "if this, then that" statements.
• Scenarios

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Scenario Definitions

• Plausible stories about how the future might
  unfold from existing patterns, new factors and
  alternative human choices. The stories can be
  told in the language of both words and numbers
  (Raskin, in press).
• Plausible descriptions of how the future may
  develop, based on a coherent and internally
  consistent set of assumptions about key
  relationships and driving forces (Nakicenovic
  2000).
• A tool for ordering ones perceptions about
  alternative future environments in which ones
  decision might be played out (Schwartz 1996).
• Plausible alternative futures, each an example
  of what might happen under particular assumptions
  (MA).

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Why use scenarios?

• Purpose of scenarios
• Information dissemination
• Scientific exploration
• Decision-making tool
• Understanding all factors influencing the future
• Robust strategies that work under different
  worlds
• ? Different process of stakeholder involvement
  in scenario development
• ?Understanding and communicating the main
  assumptions on which people base their notion of
  the future

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Types of scenarios

• Exploratory vs. anticipatory scenarios
• Baseline vs. alternative/policy scenarios
• Qualitative vs. quantitative scenarios, or a
  combination

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Exploratory vs Anticipatory Scenarios

• exploratory scenarios
• present -gt future
• to explore uncertainties/driving
  forces/developments
• to test impacts of implementing specific policies
• anticipatory scenarios (also normative
  scenarios)
• present lt- future
• to investigate how specific end state can be
  reached
• to show how to achieve environmental targets

Source Henrichs, EEA 2003
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Baseline vs Alternative Scenarios

• baseline scenarios (also business-as-usual
  scenarios)
• describe a future development / state in which
  no new policies or measures are implemented
  apart from those already adopted or agreed upon
• alternative scenarios (also policy scenarios)
• take into account new policies or measures
  additional to those already adopted or agreed
  upon and/or that assumptions on key driving
  forces diverge from those depicted in a baseline
  scenario.

Source Henrichs, EEA 2003
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Qualitative vs Quantitative Scenarios

• qualitative scenarios
• are narrative descriptions of future developments
• (i.e. presented as storylines, diagrams, images,
  etc.).
• quantitative scenarios
• are numerical estimates of future developments
• (i.e. presented as tables, graphs, maps, etc.)
• usually based on available data, past trends
  and/or mathematical models.

Source Henrichs, EEA 2003
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Steps in a scenario exercise

• Decide on purpose of scenario and stakeholder
  involvement
• Get creative
• Think about the long history
• Identify main areas of uncertainty (focal
  questions)
• Identify main drivers of change
• Develop first set of storylines
• Critically assess storylines (consider shocks and
  surprises)
• Decide on modeling capacity
• Evaluate scenario implications
• Stakeholder feedback session iterations
• Final write up communication

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Good scenarios should ...

• ... be plausible (or not implausible)
• ... be internally consistent and coherent
• ... be constructed with rigour, detail
  creativity
• ... meet the goals of scenario exercise!!!

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How the scenarios method has been used so far

• Strategic planning exercises during cold war
  period
• Future studies in 1970s (e.g. Club of Rome)
• Royal Dutch Shell develops scenarios method for
  business planning in 1970/80s
• Scenarios used as conflict management tool
  (Montefleur scen. in SA, Colombia)
• Scenarios exercises as part of integrated,
  global, environmental assessments, such as the
  IPCC, GEO, MA in 1990s

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Shell Intl Philosophy on Scenarios

• Scenarios are used to help link the
  uncertainties we hold about the future to the
  decisions we must make today.
• Scenarios are NOT used to predict the future,
  but to make leaders more aware of possibilities
  and therefore able to take advantage of those
  possibilities as they come along.

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Why Shell uses scenarios.
In 1970, world oil prices were low and expected
to remain so.
Shell scenario planners thought a rise in prices
could happen, but were unsure of how this might
happen.
In one scenario, they envisioned a world in which
a coalition of oil exporting countries was able
to limit production, leading to a rise in oil
prices.
This scenario was considered radical, but it was
plausible.
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Why Shell uses scenarios.. (2)
The scenario planning exercise led Shell to
adjust its business management practices to hedge
against the potential for high oil prices.
OPEC formed in 1972 and oil prices rose rapidly
an unexpected shock to the global oil market.
Shells changes to its business practices, and
willingness to accept changes in oil prices as
permanent, allowed it to adapt to expensive oil
faster than its competitors.
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Global Scenarios Group

• Global Scenarios Group Scenarios by SEI and
  others

Conventional Worlds
Great Transitions
Barbarization
CW envision the global system evolving without
major surprises. Dominant values and institutions
shape the future, world economy grows rapidly and
dev countries converge toward the norms set by
highly ind countries.
These scenarios envision the grim possibility
that the social, economic and moral underpinnings
of civilization deteriorate, as emerging problems
overwhelm the coping capacity of both markets and
policy reforms.
Great Transitions explore visionary solutions to
the sustainability challenge, including new
socioeconomic arrangements and fundamental
changes in values.
Market Forces
Breakdown
Eco-Communalism

• mid-range projections
• self correcting logic of competitative markets

• build up / combine crises
• unbridled conflict
• institutional disintegration
• economic collapse

• green visions of bio-regionalism, localism
• face-to-face democracy
• economic autarky.

Policy Reform
Fortress World
New Sustainability

• mid-range projections
• strong government ac-tion towards sustainability
• env-friendly technology

• authoritarian responses
• protected elite enclaves
• outside the fortress there is repression,
  environment destruction and misery.

• changing urban environm.
• building a more humane and equitable global
  civilization rather than retreat into localism.

Source www.gsg.org
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GEO-3 Scenarios

• Global Environmental Outlook by UNEP

Sustainability First pictures a world in which a
new development paradigm emerges in response to
the challenge of sustainability, supported by
new, more equitable values and institutions.
Source UNEP (2000)
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SRES-IPCC Scenarios

• Special Report on Emission Scenarios by IPCC
• IPCC scenarios widely used (e.g. unfccc
  negotiations)
• GHG emission up to 2100
• 4 scenario families
• A1 market driven,
• A2 fragmented dev.,
• B1 market policy,
• B2 local green solution,

Source Nakicenovic et al (2000)
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The MA Global Scenarios


Global
Technogarden
Globally
Orchestration
Focus
connected
Environmental
Focus
Institutions
technology
Social policy

Order
Regional

Adaptive Mosaic
from Strength
focus
Focus
Focus
Active learning
Self interest
Proactive
Reactive
Approach to environmental management
Four Plausible, Internally-Consistent Scenarios
describing changes in ecosystems and their
services and their consequences for human
well-being over the next 50 years.
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