IEA Training Manual - Module 6

7.2 Laying the foundation for the scenarios

The previous steps provide the broad outline for the scenario exercise as a whole. At this point, it is necessary to look more closely at the foundations for the scenarios themselves.

How many scenarios are to be developed, and what should be the fundamental distinctions between them?

d) Identifying drivers

Purpose

Figure 7: Examples of scenario
drivers from GEO-3, including
current trends.

To identify, in the context of the exercise, the key trends and dynamics that will determine the course of the future. (Note: this can build on the SoE analysis carried out in Module 5. For scenario development, the important question is whether these drivers are likely to change and whether new drivers are expected to emerge.)

Output(s)
List of drivers with brief explanations.

Steps

  1. Identify the drivers. Be sure to do this in the context of the themes that you developed earlier. Think about key historical events and trends, and how these have affected the themes in the past. To identify drivers, think in terms of underlying causal relationships, not just descriptions.
  2. For each driver, describe briefly the range of possible ways it could evolve in the future.

Comments
Figure 7 lists some of the drivers that were considered in the GEO-3 global scenarios. Drivers at the national level might be different, but the principle is the same.

See Exercise 6.7.2 a

e) Selecting critical uncertainties

Purpose

Figure 8: Identifying critical
uncertainties (CU)

To select the critical uncertainties, which will define the scenario framework.

Output(s)
A set of critical uncertainties, selected from among the drivers developed in Step 5.

A critical uncertainty is a driver that is especially important in determining how the future evolves, but whose future development is highly unpredictable.

Steps

  1. Consider each driver in turn, and recall the range of possible ways it could evolve.
  2. Consider the degree of uncertainty in each driver. How much variation is there in the range of possible ways it could evolve? Is there a great deal of uncertainty, or relatively little?
  3. Consider the relative impact/importance of each driver into the future. Does the way that it evolves make a major difference in the overall vision for the future, or does it make a relatively minor difference?
  4. Plot each driver on the chart of impact/importance versus uncertainty. (In Figure 8, each circle represents a particular driver.) The farther to the right, the greater the uncertainty in how that driver could develop. The farther upward, the more significant is the impact of that driver.
  5. Identify the drivers (usually two or three) that are highest impact and highest uncertainty.

(In Figure 8, the two drivers that have the combination of the highest importance and highest uncertainty are labeled CU1 and CU2.)

Comments
For those drivers that are:

  • in the “low importance, low uncertainty” quadrant: these will not figure prominently in the scenario analysis because outcomes are clear, or the issues are not thought to be particularly influential in the future;
  • in the “low importance, high uncertainty” quadrant: these will not figure prominently in the scenario analysis because they are not of sufficient significance;
  • in the “high importance, low uncertainty” quadrant:, these should figure prominently in the scenario analysis, but their future evolution should not differ significantly across the scenarios, reflecting the low level of uncertainty; in this way they can be considered ‘inevitables’; and
  • in the “high importance, high uncertainty” quadrant: a subset of these should figure prominently in the scenario analysis by defining the key underlying distinctions between the scenarios as described in next step. The others will also figure prominently, and their future evolution may very well differ across the scenarios.

See Exercise 6.7.2

f) Creating a scenario framework

Purpose
To establish the scenario framework using the critical uncertainties.

Output(s)
A set of clearly defined scenario bases.

The critical uncertainties identified in Step 6 capture in a very simplified, orderly way a set of fundamental ways the future can evolve. Step 7 provides a simple procedure for creating a scenario framework, and thereby defining four distinct scenarios.

Steps
Picture two clearly dominant critical uncertainties (say, CU#1 and CU#2, Figure 8), each of which could evolve in two distinct ways. Define a scenario grid as shown in Figure 9. This framework reflects the four possible combinations of how CU#1 and CU#2 can evolve, and thus four possible future worlds.

For a simple example, consider a case where scenario participants have identified two critical
uncertainties, CU#1, which refers to the sensitivity of ecosystems to human pressures, and CU#2,
which refers to the future development of technology. Assume that participants have concluded
that the sensitivity of ecosystems to human pressures (e.g., GHG emissions, coastal erosion, fishery
exploitation) could be described as falling along the follow spectrum:

Sensitive global ecosystem   Resilient global ecosystem
High level of sensitivity, with  feedbacks that lead to large impacts, even from relatively minor 
human pressures.
High level of resilience and ability to adapt and recover, leading to modest impacts from even relatively large
human pressures.
Assume also that the participants have decided that future development of environmentally relevant technologies (e.g., renewable energy, environmentally sensitive agricultural technologies) could be described as falling along the following spectrum
Technological stagnation   Technological innovation
Slow and incremental, with minor potential for addressing environmental challenges with
technological fixes.
Rapid and fundamental, with
considerable potential to address environmental challenges with technological fixes.

Combining these into their four possible combinations defines four scenarios.

Scenario A: The world proves to be an ecologically resilient world, with high potential for innovation in environmentally relevant technologies.
Scenario B: The world proves to be ecologically vulnerable, but with high potential for innovation in environmentally relevant technologies.
Scenario C: The world proves to be ecologically vulnerable, with low potential for innovation in environmentally relevant technologies.
Scenario D: The world proves to be ecologically resilient, but with low potential for innovation in environmentally relevant technologies.

Figure 9: Four possible futures define
the scenario framework from two critical
uncertainties

This simple approach yields four distinct scenarios in the situation where there are two critical uncertainties and each has two fundamentally distinct future paths worth exploring. There would be more than four distinct scenarios, if there are more than two critical uncertainties, and/or if any of them has more than two possible paths worth exploring. In such a case, you could enumerate all combinations, and thus all possible scenarios.
Consider the example illustrated in the table below, in which there are three critical uncertainties. Critical Uncertainty #1 has two fundamentally distinct possible future evolutions (1a and 1b). Likewise, Critical Uncertainty #2 has two fundamentally distinct possible future evolutions (2a and 2b). Critical Uncertainty #3, has three fundamentally distinct possible future evolutions (3a, 3b and 3c). This leads to a total of twelve combinations (2 _ 2 _ 3 = 12), and thus twelve possible scenarios. This is a large number of scenarios, and it probably will not be possible to elaborate and clearly present them all. Thus, it generally makes sense to pare the possible scenarios down to a number that is manageable given the time, resources and intended audience. In many cases, some of them will likely be less coherent than others. For example, if in the case described above a third critical uncertainty were to be the general rate of economic development, defined as low, medium and high. Many people would argue that high rates of economic development are not plausible in a world of technological stagnation; thus any combinations of the two would not be worth pursuing.

  Critical Uncertainty 1
(1a, 1b)
Critical Uncertainty 2
(2a, 2b)
Critical Uncertainty 3
(3a, 3b, 3c)
Scenario 1 1a 2a 3a
Scenario 2 1a 2a 3b
Scenario 3 1a 2a 3c
Scenario 4 1a 2b 3a
Scenario 5 1a 2b 3b
Scenario 6 1b 2b 3c
Scenario 7 1b 2b 3a
Scenario 8 1b 2b 3b
Scenario 9 1b 2b 3c
Scenario 10 1b 2b 3a
Scenario 11 1b 2b 3b
Scenario 12 1b 2b 3c

Having completed the steps above, consider whether the result is a meaningful set of scenario bases to explore. Do they span a sufficiently wide range of possible futures? Do they allow you to take into account the most important concerns of the participants? If not, return to the discussion of drivers and see whether important issues have been left out, or if possible future evolutions of some drivers have been neglected.

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Got it! Thanks a lot again for heplnig me out!