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Scenarios for Uncertainty
Risk Analysis for Water Resources Planning and Management
Institute for Water Resources
2008
UncertaintiesAverage house valueHurricane trackForward speed of stormFootprint of projectSea level riseChannel depthBudgets and funding
Mean stream flowMean day percent of shadeCost/yd. concreteLand use patterns/ratesRedevelopment rate in NOLA
Some uncerta
inties d
warf all o
thers
Landscape Scale StudiesGlobal importanceAffect millions of peopleGreat variety of wickedly complex problemsMajor uncertainties commonMany possible futures
ExamplesLaCPRMsCIPUpper Mississippi and TributariesMuskingum Watershed Conservancy District Puget SoundColumbia RiverCoastal LouisianaEverglades
When One Is Not EnoughSingle most likely without project condition exists
Traditional planning approachAddress quantity and model uncertainty within that scenario
More than one possible future and they are significantly different
Scenario planningProbabilistic scenario analysis
When to Use Scenario Planning
Scenario Planning Deterministic Planning
Deterministic Planning Standard DecisionMaking
Consequence
Uncertainty Much
Grave
Little
Minor
Scenario Planning Is ConsistentWith P&G
It is not an alternative to P&GIt is an enhancement for situations with significantly different futures possible Scenario planning modifies tasks in some steps
Traditional P&G PlanningIt’s largely deterministicProcess relies on a single most likely alternative future forecast
Desire for single right answerOften anchored in present Adversarial--legitimate differences in views of uncertain future
Forecasting & Comparing Criteria
Plan
Effe
cts
Baseline Risk
Existing Risk
Future Risk if No Action
Future Risk with Management Option A
Before & AfterComparison
With & WithoutOption Comparison
Target Gap Analysis
Time
Most Likely Future Condition
We labor in uncertaintyA single forecast of the future will be wrongThus, planning is based on what could be not necessarily what will beWhat could be is wide open to debate
We cannot ignore it
The consequences of being wrong may be serious
Scenario PlanningDeveloped in second half of 20th century (Europe) Result of failure of traditional planning
Deterministic view of futureForecasts were wrong
Barrow Coastal Problem
Even small projects can be complex!
Barrow’s Coast
Change
Storms and erosionGlobal warmingLess ice cover-major issue
Social & economic infrastructureCultural consequences
Ivu
Erosion rate& Beach recovery
Consequence forQuality of life
Severe
Severe
Minor
Minor
Goodbye Barrow
Happy Days
Troubled Times
Surviving
What Scenarios AreNarratives of alternative environments in which today’s decisions may be played outNeither predictions nor strategiesHypotheses of different futures specifically designed to highlight the risks and opportunities involved in problem solving
Steps to Scenarios1) Scenario team2) Decision focus3) Brainstorm a list of key factors4) Distinguish pre-determined elements from
uncertainties 5) Identifying a few scenario logics 6) Flesh out scenarios
Scenario TeamParticipants carefully recruited to include people with
Thorough knowledge of the problemDiverse backgrounds
Range of levels of management, perspectives, and roles
Variety of intellectual disciplines
Decision FocusIdentify 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 scenarioAffects range of movement and creativity within scenario
Brainstorm Key FactorsNo idea is evaluated at firstIdentify driving forces and key trends
The most significant elements in external environmentConsider 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
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
How Can I Construct ScenariosDeductive 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
How Do We Flesh Out Scenarios?Consider Systems and Patterns: Systems Thinking
Studying the way the parts of a system interactUseful 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?
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
Typical PlotsEach scenario should be different, yet relevant to focal questionSome archetypical plot lines arise regularly
Common PlotsWinners & losersCrisis & responseGood news/bad newsEvolutionary changeRevolution Tectonic Change
CyclesInfinite PossibilityThe Lone RangerGenerationsPerpetual Transition
Tips for Scenarios1. Stay Focused 2. Keep It Simple 3. Keep It Interactive 4. Plan to Plan and Allow
Enough Time 5. Don’t Settle for a Simple
High, Medium, and Low6. Avoid Probabilities or “Most
Likely” Plots
7. Avoid Drafting Too Many Scenarios
8. Invent Catchy Names for the Scenarios
9. Make the Decision Makers Own the Scenarios
10. Budget Sufficient Resources for Communicating the Scenarios
Then What?Identify future scenarios Do analysis
(good science)Evaluate plans against all scenariosChoose most robust plan
Runoff
P-loading
Wetter
Dryer
Heavy Light
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 planWhich plan does best (robustness) regardless of the future realized?
Two Basic Ways to Proceed
Choose one of the four scenarios as most likely Proceed as usual through the selection processEvaluate the recommended plan against the other three remaining scenariosUnacceptable results in any scenario
Adaptive managementReformulateAnother plan is selected
Who’s Doing It?Industry Europe COE
Take Away PointsLandscape scale problems complex & diverseUncertainty is everywhere Scenario planning to address uncertaintyMCDA needed to address complexity & collaborative planning initiativeScenario analysis--MCDA in scenario planning context is a potential solution
What’s the Without Condition?It is critical to plan formulationIt is critical to plan evaluationIt is a source of adversarial processes
See Washington Post vs. COE--Upper Miss
And you do not know what it is!