Scenarios for Uncertainty

1. Scenarios for Uncertainty Risk Analysis for Water Resources Planning and Management Institute for Water Resources 2008

2. Average house value Hurricane track Forward speed of storm Footprint of project Sea level rise Channel depth Budgets and funding Mean stream flow Mean day percent of shade Cost/yd. concrete Land use patterns/rates Redevelopment rate in NOLA Uncertainties Some uncertainties dwarf all others

3. Landscape Scale Studies • Global importance • Affect millions of people • Great variety of wickedly complex problems • Major uncertainties common • Many possible futures

4. Examples • LaCPR • MsCIP • Upper Mississippi and Tributaries • Muskingum Watershed Conservancy District • Puget Sound • Columbia River • Coastal Louisiana • Everglades

5. When One Is Not Enough • Single most likely without project condition exists • Traditional planning approach • Address quantity and model uncertainty within that scenario • More than one possible future and they are significantly different • Scenario planning • Probabilistic scenario analysis

6. When to Use Scenario Planning Consequence Grave Scenario Planning Deterministic Planning Little Uncertainty Much Deterministic Planning Standard Decision Making Minor

7. Scenario Planning Is ConsistentWith P&G • It is not an alternative to P&G • It is an enhancement for situations with significantly different futures possible • Scenario planning modifies tasks in some steps

8. Traditional P&G Planning • It’s largely deterministic • Process relies on a single most likely alternative future forecast • Desire for single right answer • Often anchored in present • Adversarial--legitimate differences in views of uncertain future

9. Forecasting & Comparing Criteria With & Without Option Comparison Future Risk if No Action Baseline Risk Before & After Comparison Future Risk with Management Option A Plan Effects Existing Risk Target Gap Analysis Time

10. Most Likely Future Condition • We labor in uncertainty • A single forecast of the future will be wrong • Thus, planning is based on what could be not necessarily what will be • What could be is wide open to debate • We cannot ignore it • The consequences of being wrong may be serious

11. Scenario Planning • Developed in second half of 20th century (Europe) • Result of failure of traditional planning • Deterministic view of future • Forecasts were wrong

12. Barrow Coastal Problem Even small projects can be complex!

13. Barrow’s Coast

14. Change • Storms and erosion • Global warming • Less ice cover-major issue • Social & economic infrastructure • Cultural consequences

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17. What Scenarios Are • Narratives of alternative environments in which today’s decisions may be played out • Neither predictions nor strategies • Hypotheses of different futures specifically designed to highlight the risks and opportunities involved in problem solving

18. Steps to Scenarios • Scenario team • Decision focus • Brainstorm a list of key factors • Distinguish pre-determined elements from uncertainties • Identifying a few scenario logics • Flesh out scenarios

19. Scenario Team • Participants carefully recruited to include people with • Thorough knowledge of the problem • Diverse backgrounds • Range of levels of management, perspectives, and roles • Variety of intellectual disciplines

20. Decision Focus • Identify key decision • Develop useful questions to ask about the decision • To be useful scenarios must teach relevant lessons to decision makers • Must speak to decisions or direct concerns • Define time frame of scenario • Affects range of movement and creativity within scenario

21. Brainstorm Key Factors • No idea is evaluated at first • Identify driving forces and key trends • The most significant elements in external environment • Consider 5 general categories that interact to create complex, interesting plots • Social • Technological • Economic • Environmental • Political forces. • Each study must compile its own driving forces and key trends

22. What Are We Looking For? • Which key forces seem inevitable or pre-determined? • Trends unlikely to vary significantly in any scenario should be reflected, implicitly or explicitly, in each scenario • Which forces are most likely to define or significantly change the nature or direction of the scenarios? • Measured by two criteria • How uncertain are you of its outcome? • How important is it to solving your problem(s)? • Scenarios address things that are both very important and very uncertain

23. How Can I Construct Scenarios • Deductive approach • Prioritize list of key factors • Construct a 2 x 2 scenario matrix based on 2 most critical uncertainties • One method each participant gets 25 points to assign to different the forces on the list

24. How Do We Flesh Out Scenarios? • Consider Systems and Patterns: Systems Thinking • Studying the way the parts of a system interact • Useful to map out events, patterns, and structure individually then create systems diagrams together • Build Narratives • Once basic logics of different worlds are determined, weave pieces together to form a narrative • Beginning • Middle • End • How could we get from present to this new scenario? What events are necessary?

25. Flesh Out Scenarios (cont.) • Identify characters to tell story around • Individuals, stakeholders or institutions that espouse specific changes • Known (real) • Invented (hypothetical) • May be driving forces • May crystallize logic of scenario

26. Typical Plots • Each scenario should be different, yet relevant to focal question • Some archetypical plot lines arise regularly

27. Winners & losers Crisis & response Good news/bad news Evolutionary change Revolution Tectonic Change Cycles Infinite Possibility The Lone Ranger Generations Perpetual Transition Common Plots

28. Stay Focused Keep It Simple Keep It Interactive Plan to Plan and Allow Enough Time Don’t Settle for a Simple High, Medium, and Low Avoid Probabilities or “Most Likely” Plots Avoid Drafting Too Many Scenarios Invent Catchy Names for the Scenarios Make the Decision Makers Own the Scenarios Budget Sufficient Resources for Communicating the Scenarios Tips for Scenarios

29. Runoff Wetter Light Heavy P-loading Dryer Then What? • Identify future scenarios • Do analysis (good science) • Evaluate plans against all scenarios • Choose most robust plan

30. Two Basic Ways to Proceed • Evaluate each plan against each of the four scenarios (e.g., using MCDA results) • Results of this evaluation are compared across plans to select a plan • Which plan does best (robustness) regardless of the future realized?

31. Two Basic Ways to Proceed • Choose one of the four scenarios as most likely • Proceed as usual through the selection process • Evaluate the recommended plan against the other three remaining scenarios • Unacceptable results in any scenario • Adaptive management • Reformulate • Another plan is selected

32. Who’s Doing It? • Industry • Europe • COE

33. Take Away Points • Landscape scale problems complex & diverse • Uncertainty is everywhere • Scenario planning to address uncertainty • MCDA needed to address complexity & collaborative planning initiative • Scenario analysis--MCDA in scenario planning context is a potential solution

34. What’s the Without Condition? • It is critical to plan formulation • It is critical to plan evaluation • It is a source of adversarial processes • See Washington Post vs. COE--Upper Miss • And you do not know what it is!