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Scenario Analysis

Scenario Analysis. By: Daniel Mason-D’Croz. What are scenarios. Scenarios are a plausible futures Scenarios are what-if stories used to explore future uncertainties Scenarios can be told in narratives, numbers, and even images

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Scenario Analysis

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  1. Scenario Analysis By: Daniel Mason-D’Croz

  2. What are scenarios • Scenarios are a 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

  3. Moving from the Past to the Future Future: broad uncertainty Past Forecasting Present perspective

  4. Moving from the Past to the Future Future: broad uncertainty Past Scenarios Present perspective

  5. 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

  6. 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

  7. What uncertainties do we test? • Demographic shifts (population growth, migration, aging, etc.) • Economic growth and development • Technological Advances • Climate Change

  8. Why use models • Allow us to simplify reality, and test assumptions on behavior. • Let us simulate scenarios and quantify the effects of changing assumptions

  9. Standard IMPACT scenarios • IMPACT Drivers: • Population • GDP • Climate • Technology Growth Assumptions • Drivers are combined to create a suite of scenarios to create an envelope of plausible futures (worst-case, best-case, and scenarios in between)

  10. Questions

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