Method – scenario analysis

Description

Scenarios can be described as ‘stories about the future.’ The Intergovernmental Panel on Climate Change (IPCC) defines a scenario as: ‘a coherent, internally consistent and plausible description of a possible future state of the world’1)Intergovernmental Panel on Climate Change (IPCC). 1994. in: Carter, T.R., Parry, M.L., Harasawa, H., Nishioka, S. (Eds.), IPCC Technical Guidelines for Assessing Climate Change Impacts and Adaptations. Part of the IPCC Special Report to the First Session of the Conference of the Parties to the UN Framework Convention on Climate Change, Working Group II, Intergovernmental Panel on Climate Change. University College London, UK/Center for Global Environmental Research, National Institute for Environmental Studies, Tsukuba, Japan. It is important to emphasise that scenarios are not intended to be accurate predictions about how the future may unfold, as the future is unknowable. However, scenarios do provide a means of better understanding and working with this uncertainty by outlining possible futures. As such scenarios, and the process of scenario planning, have the potential to aid and support decision making by recognising this uncertainty.

Looking over the long term, it is apparent that the character and extent of future climate change impacts and risks is unclear as a result of themes linked to complexity and uncertainty. However, it is recognised that scenarios can support decision making by helping to better understand the relationship between climate change impacts and different socio-economic development pathways 2)Ebi, K., Hallegatte, S., Kram, T., Arnell, N., Carter, T., Edmonds, J., Kriegler, E., Mathur, R., O’Neill, B., Riahi, K., Winkler, H., Van Vuuren, D., Zwickel, T. (2014). A new scenario framework for climate change research: background, process, and future directions. Climatic Change 122: 363–372. Rather than letting uncertainty and complexity stifle planners and decision makers, scenarios and scenario planning can play a role in developing adaptation and resilience approaches to respond to the issues that characterises 21st century cities and urban areas.

Use in decision framework

Non-climate trends
 Risk assessment
 Baseline
 Prioritising

Input

There is no set process for developing scenarios. This will vary according to factors including the objective of the exercise, the availability of financial and human resources (skills and capacities) and the amount of time available. Guidance notes do exist that take potential users through a series of stages. These include a document from the UK Government’s Office for Science, which also includes scenario case studies 3)Government Office for Science. (2009). Scenario Planning. Foresight Horizon Scanning Centre. Government Office for Science, London., and a practical scenario development guide prepared by the UK’s National Council for Voluntary Organisations (NCVO). Reviews also exist of scenario literature. For example a review by the European Environment Agency identified that scenarios can enhance the robustness of decison making and points to ways in which the development and impact of scenarios can be enhanced in practice 4)European Environment Agency (EEA). (2009). Looking back on looking forward: a review of evaluative scenario literature. European Environment Agency, Copenhagen.

Broadly, in the context of climate change adaptation and resilience, the development of scenarios requires innovative thinking on the combination of key factors (or drivers of change) that might affect the scope and implementation of adaptation and resilience responses over the coming decades. This process will generally involve a number of stages including preparing for the scenario exercise, identifying and gathering data and insights on drivers of change, developing scenarios and analyzing scenarios. Alternatively, where the resources or motivation to create a set of bespoke scenarios is lacking, existing scenario sets are available that can be used to analyse the implications of different climate and socio-economic futures on adaptation and resilience themes. A relevant example is a set of five scenarios developed by Forum for the Future that each present a different way in which the world responds to climate change in 2030 (Forum for the Future 2008).

Outline

The outline of how to perform a scenario analysis was developed by the PSI-connect consortium, dealing with knowledge brokerage. The project was funded by the European Commission under Framework Programme 7 (2009-2013).

Step 1: Formulating the key question

The central starting point is formulating the key question which defines the field of focus and the horizon. It is the question, that in the end, needs to be answered and which represents the starting point for the formulation of scenarios.

Step 2: Inventory, clustering and prioritising of certainties and uncertainties

The basis for developing scenarios is determined by certainties and uncertainties that the participants bring forward in relation to the key question. By knowing from each other what the major uncertainties are and what is specified as certain, the participants learn from each other. This is valuable input to develop the scenarios. In order to do this a workshop should be organised that facilitates the interaction between participants. The inventory of uncertainties in most situations gives a long list. It is therefore important to cluster the outcomes. After this the clusters can be given a priority, in regard to other clusters and in regard to the expected impact.

Step 3: Compose a scenario matrix

The clusters of uncertainties that are experienced to be very uncertain and very important are the basis for the scenario matrix. By formulating the extreme outcome of two prioritised clusters, a frame is developed for contrasting views (see Figure below).

scenario

Step 4: Writing of scenario stories

After developing the scenario matrix the scenario stories need to be written. Ideally, this is done in close cooperation with a group of stakeholders, for example through workshops. The workshops are focused on the elaboration of the uncertainties, the interdependency between the uncertainties and the effect for the different scenarios. In this process each scenario should be given a name. This will simplify the communication among stakeholders and will be a first perception of a certain story.

Step 5: Answering the key question

Each scenario should give an answer on the key question. Responses can be grouped as follows: 1. Robust responses that can be derived from the answers from all scenarios. These responses are the starting point for a robust strategy, in other words no matter which way the trends will develop, they will be relevant. 2. Responses that only come forward in one or two scenarios. This exercise generates a readiness: if trends develop in a certain direction, the separate scenarios have an answer to it. When answering the key question, attention should be paid to flexible options, i.e. options that can be adjusted relatively easy, when a new situation is at stake.

Step 6: Translation to short term actions

After the key question has been answered, the next question is whether action is possible on a short term. Through back casting it is possible to become aware of which actions are possible or should be undertaken and which stakeholders are connected to the actions. Actions can also include knowledge questions, aimed at gathering new and additional information. The difference after making the scenarios is that the knowledge questions are more clear and specific. The scenarios have made it possible to articulate the knowledge questions and connect them in order to design a more structured approach to answering these questions.

Output

The output of a scenario development process is a set of scenarios. These differ depending on the objectives of the exercise and the process that is followed. Scenario outputs are diverse and may include a combination of storylines, images and quantitative data. Despite this, they are all essentially interpretations of contrasting potential future conditions.

Scenarios have several functions in the field of climate change adaptation and resilience:

  • Policy makers can be supported by scenarios, which can be used to indicate potential future conditions that may influence the implementation of climate change strategies or policies. If common themes emerge across scenarios, strategies and policies can be designed in response.
  • Scenarios can be created and utilised by planners during the development of climate change adaptation and resilience strategies. They can encourage the development of approaches that are robust under different possible future climate and socio-economic conditions.
  • Scenarios can be useful at the level of developing individual projects, for example enhancing understanding of the future climate change impacts facing a major infrastructure instillation that is planned to have a long lifespan.
  • Scenarios are potentially useful as a research tool for increasing understanding of climate change futures. In some cases research exercises may go onto inform adaptation and resilience policy or practice.

In addition to these functions, there are several broader benefits associated with developing and applying scenarios as part of climate change adaptation and resilience activities. They include:

  • Scenario development is an inclusive and participatory process, and can involve stakeholders in an activity that can increase awareness of and engagement in climate change adaptation and resilience.
  • Scenarios can challenge perspectives and assumptions on how the future may unfold. Adaptation and resilience strategies must be forward looking, but in taking a long term perspective, scenario planning demonstrates that they must be responsive and open to a diverse range of climate and socio-economic futures.

It is necessary to acknowledge that these are ‘potential’ functions, which may not be realised in practice due to issues such as a mismatch between the aspiration of scenario planning and the reality of the challenges associated with implementing long term thinking in organisations 5)European Environment Agency (EEA). (2009). Looking back on looking forward: a review of evaluative scenario literature. European Environment Agency, Copenhagen.6)European Environment Agency (EEA). (2011). BLOSSOM — Bridging long-term scenario and strategy analysis: organisation and methods – a cross-country analysis. European Environment Agency, Copenhagen.

Experiences

Scenario analyses are often used. Large companies, NGO’s and EU/national governments all have developed their own future scenarios. Please see also the Climate Adapt website on this topic.

 

Footnotes   [ + ]

1. Intergovernmental Panel on Climate Change (IPCC). 1994. in: Carter, T.R., Parry, M.L., Harasawa, H., Nishioka, S. (Eds.), IPCC Technical Guidelines for Assessing Climate Change Impacts and Adaptations. Part of the IPCC Special Report to the First Session of the Conference of the Parties to the UN Framework Convention on Climate Change, Working Group II, Intergovernmental Panel on Climate Change. University College London, UK/Center for Global Environmental Research, National Institute for Environmental Studies, Tsukuba, Japan.
2. Ebi, K., Hallegatte, S., Kram, T., Arnell, N., Carter, T., Edmonds, J., Kriegler, E., Mathur, R., O’Neill, B., Riahi, K., Winkler, H., Van Vuuren, D., Zwickel, T. (2014). A new scenario framework for climate change research: background, process, and future directions. Climatic Change 122: 363–372.
3. Government Office for Science. (2009). Scenario Planning. Foresight Horizon Scanning Centre. Government Office for Science, London.
4, 5. European Environment Agency (EEA). (2009). Looking back on looking forward: a review of evaluative scenario literature. European Environment Agency, Copenhagen.
6. European Environment Agency (EEA). (2011). BLOSSOM — Bridging long-term scenario and strategy analysis: organisation and methods – a cross-country analysis. European Environment Agency, Copenhagen.