Transcript Introduction to Scenario Analysis

Scenario Analysis
By: Daniel Mason-D’Croz &
Shahnila Islam
What are scenarios
• Scenarios are plausible futures
• Scenarios are what-if stories used to explore
future uncertainties
• Scenarios can be told in narratives, numbers,
and even images
• Scenarios are not predictions of the future,
but are instead focused on system dynamics
and interactions and are based on knowledge
of past and current behavior
Moving from the Past to the Future
Future: broad
uncertainty
Past
Forecasting
Present
perspective
Limitations of Forecasting
Moving from the Past to the Future
Future: broad
uncertainty
Past
Scenarios
Present
perspective
Scenario Example
Who uses scenarios?
• Has a long history of use in the military
• Businesses have also used scenarios
extensively
• People do basic scenario planning every day
Why use scenarios?
• Scenarios provide concrete ways to deal with
future uncertainty
• They allow us to identify current and potential
challenges and institutional vulnerabilities
• Allow us to test and develop policies ex-ante
based on our current understanding of system
behavior
Scenario studies you may be familiar
with
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Millennium Ecosystem Assessment
Presidential Elections
WTO Scenarios
WHO Scenarios
Models
• Models are logical constructs that represent
dynamic systems
• Models can:
– Simplify a complex system
– Highlight key behaviors and relationships
– Provide insights to the inner workings of a system
• Models cannot and do not explain everything
– Everything should be made as simple as possible,
but not simpler
Why use models
• Allow for pseudo-scientific experimentation in
an ex-ante environment
• Allow for the combination of diverse
assumptions on various key drivers, without
also specifying how they will effect each other
• Allow us to isolate parts of a complex system
and analyze it
• Because we can’t wait till 2050 to start
planning policies
What uncertainties do we test?
• Demographic shifts (population growth,
migration, aging, etc.)
• Economic growth and development
• Technological Advances
• Climate Change
• Water Resource Management
Standard IMPACT scenarios
• IMPACT Drivers:
– Population
– GDP
– Climate
– Technology Growth Assumptions
– Water Resource Management and Infrastructure
• Drivers are combined to create a suite of
scenarios to create an envelope of plausible
futures (worst-case, best-case, and scenarios
in between)
Global Future Scenarios
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Drought Tolerance
Heat Tolerance
Higher Yield Crops
Pest Management Practices
Differing Maturity Crops
C4 Rice
Questions