Scenario Planning Applied
Ralph P. Marra
Southwest Water Resources Consulting, LLC
[email protected]
Sonoran Institute
Scenario Planning Webinar
December 11, 2013
Key Messages
u
Critical Uncertainties
Can Dominate Key Areas of
Your Planning Environment
u
Future Change
may not be Predictable
u
Some
Decisions
Cannot Wait for Certainty
u
Effective Planning is about
Being Prepared
for
Whatever Happens
—It’s about
Being Flexible
u
Policies & Investments that Serve
Multiple
Purposes
Under a
Broad Range of Conditions
SCENARIO PLANNING
TRADITIONAL
STAKEHOLDERS
WITHIN AN
ORGANIZATION
“HYBRIDIZED”
STAKEHOLDERS
FROM MULTIPLE
ORGANIZATIONS
TWO BASIC TYPES
WITH MANY VARIATIONS
VS
Scenarios and Uncertainty
A Range of Purposes and Applications
More
Decision
Based
More
Exploratory
Oriented
Aligning
Internal/External
Stakeholders
Strategic
Decision
Making
Increasing
Risk
Awareness
General
System
Learning
C
A
B
D
Defining the Range of Future Possibility
Developing the End-Member Futures
Now
Source: Modified from Denver Water/Tucson Water Copyright © 2013 Southwest Water Resources Consulting, LLC
Future
Decision Points
Longer-Term
Contingent/Adaptive
Actions
Near-Term
Robust/
Low-Regret
Actions
“Prediction is
difficult, especially
about the future.”
--Yogi Berra
Copyright © 2013 Southwest Water Resources Consulting, LLC
Scenario Planning is
not about
PREDICTING or FORECASTING what
will happen in the Future
It’s
about BEING PREPARED
for whatever happens
in the Future
Scenario Planning in Action
Some
Recent Applications
◆
Exploring possible outcomes given long-standing
FOREST MANAGEMENT
issues within a region
◆
Supporting a multi-sector conversation about
future uncertainty & possible response actions
for a
STATE WATER PLAN
◆
Exploring the implications of long-term
CLIMATE
CHANGE
on the economy & ecology of a rural area
◆
Considering possible
WATER-RESOURCE (RE)USE
options in a politically-charged municipal planning
environment
Scenarios and Water Planning
◆
State of Colorado
is now applying the method to
develop its state-wide water plan.
◆
U.S. Bureau of Reclamation
recently used it to
evaluate the supply & demand implications of
climate change in the Colorado River Watershed
◆
Denver Water
explored the potential implications
of climate change within its Service Area
◆
Tucson Water
applied it to address system and
resource uncertainties in its planning process
◆
And there are many others…
Many Factors Can Influence a Water Issue
New Supply
Sources
Media
Coverage
Politics
Economic
Health
Growth
Climate
Change
Financing
Drought
Emerging
Contaminants
The
Environment
Conservation
Public
Perception
Supply
Reliability
How Many of
Denver Water’s Situation in 2008
Copyright © 2013 Southwest Water Resources Consulting, LLC
Denver Water experienced its worst annual drought of record in 2002.
It was coupled with a very large wildfire in its watershed.
The severe drought and wildfire threatened the reliability
and quality of Denver Water’s water supply.
Major conservation measures were implemented to reduce
per capita demand and hence the Community’s vulnerability.
For water planners, the concern was that the drought & wildfire could
be harbingers of what to expect with longer-term climate change.
More frequent coupled events like those experienced could impact
water quality & the Utility’s access to its Colorado River allotment.
UTILITY WAS UNCERTAIN ABOUT HOW TO PREPARE
FOR CLIMATE IMPACTS IN THE LONGER TERM
Denver Water’s
Scenario Planning Issue (2008)
“How can
Denver Water
maintain its
current level of service in terms of
supply reliability and water quality
Tucson Water’s Situation in 2004
Copyright © 2013 Southwest Water Resources Consulting, LLC
Tucson Water had system corrosion problems when shifting
from groundwater to imported CAP water in the early 1990s
CAP water’s high salinity & the City’s New Treatment Plant were
blamed for the widely-reported “red water” issues
Customers came to distrust CAP water, the New Plant, &
the UTILITY--CAP deliveries were suspended for 7 Years
Tucson came to use 40% of its CAP water by blending it with
groundwater via recharge & recovery. What about the rest?
Community came to accept CAP recharge but not necessarily
higher salinity & direct “chemical” treatment
Tucson Water’s
Scenario Planning Issue (2004)
“How should
the Utility
bring into full
use its two currently available
‘renewable’ water resources?”
§
Central Arizona Project Water
Using Scenarios in Water Utility Planning
Water Plan: 2000 – 2050 (2004)
http://cms3.tucsonaz.gov/files/water/docs/waterplan.pdf
Chapter 6: The Planning Process
Chapter 7: The Recommended Plan
Plate 1: Recommended Plan Summary
Appendix D: Planning Methodology
An Example of a Scenario Process
The Nine-Step Program
Identify the
issue’s driving
forces
2
Orient the
team & frame the
focal question /
issue
1
Differentiate
and rank the
driving forces
3
Identify actions
that address the
needs of each &
multiple futures
8
Develop the
scenario
narratives
6
Create the
scenario / future
framework
Identify the
most critical
certainties and
uncertainties
4
5
Explore the
implications of
each future
7
Map a strategy by
identifying ways
forward & indicators
of future change
What are the Most Important Drivers?
Understanding the System’s Influences
Regulation
Politics
Economy
Growth
Pre$$ure
Climate
Variability
Financing
Drought
Emerging
Contaminants
Environmental
Needs
Conservation
Public
Perception
New
$upply
$ources
System
Security
Water
Quality
Technology
Energy
Infra$tructure
Aging
Media
Coverage
Water
Rate$
Tucson Water’s List of Driving Forces
Given its Simpler Scenario Issue
1)
Public or Political Resistance/Support for “Direct
Use” of New Treatment Plant
2)
Public or Political Resistance/Support for “Indirect
Use” of New Treatment Plant
« »
« »
« »
« »
« »
« »
13)
Public’s Willingness to Pay Extra for “Aesthetic”
Improvements to Water Quality
14)
Tolerance of Local Residents to New Facilities
15)
Environmental/Endangered Species Act Issues
Rank the Driving Forces
Identifying the Scenario Building Blocks
In
cr
ea
si
n
g
U
n
ce
rta
in
ty
MOST IMPORTANT
& CERTAIN
MOST IMPORTANT
&
UN
CERTAIN
Ranking Tucson Water’s Driving Forces
13
14 15
12
11
1
4
3
2 5
10
6 8
9
7
Source: Modified from Tucson Water
Increasing Importance
In
cr
ea
si
n
g
U
n
ce
rta
in
ty
Identifying the Most Critical Uncertainties
High-Impact Drivers that Can “Tip the Future”
In
cr
ea
si
n
g
U
n
ce
rta
in
ty
(13) Is the public willing to pay for
discretionary water-quality improvements to
the CAP/ groundwater blend?
(1) Will the public accept the use of the
City’s New Water Treatment Plant for direct
use of CAP water ? (Treatment Plant to Tap)
The “Classical” Scenario Matrix
Tucson Water’s Four End-Member Futures
Public Willing
to Pay Extra for
“Enhanced”
Water Quality
Scenario A
(+X,+Y)
Scenario D
(+X,-Y)
Scenario C
(-X,-Y)
Scenario B
(-X,+Y)
Public Only
Willing to Pay
Minimum to Meet
EPA Standards
Some “Direct”
Treatment of CAP
Water is Acceptable
All CAP Water Must
Be Recharged
Before Treatment
Y
X
Copyright © 2013 Southwest Water Resources Consulting, LLC
YES
NO
YES
The Scenario Continuum Approach
Exploring
Two End-Member Futures
The Scenario Continuum Approach
Exploring
Two End-Member Futures
Copyright © 2013 Southwest Water Resources Consulting, LLC
Scenario B
Uncertainty-4 (YES)
Uncertainty-4 (NO)
Certainty-A
Certainty-B
Uncertainty-1 (NO)
Uncertainty-2 (NO)
Certainty-A
Certainty-B
Uncertainty-1 (YES)
Uncertainty-2 (YES)
Scenario A
The Scenario Continuum Approach
Exploring
Two End-Member Futures
Scenario B
Uncertainty-4 (YES)
Uncertainty-4 (NO)
Certainty-A
Certainty-B
Uncertainty-1 (NO)
Uncertainty-2 (NO)
Certainty-A
Certainty-B
Uncertainty-1 (YES)
Uncertainty-2 (YES)
Many Critical
Uncertainties
Exploring
Compelling
Possibilities
Scenario A
The Dynamic Planning Environment
With Its Certainties and Many Uncertainties
Story B
Story A
Story C
Story D
Simplifying the Planning Environment
Defining the Range of Future Possibility
Credible Challenging Divergent
“Touchy
Feely”
The Power of the Narrative
A
Common
“
Meta” Scenario Structure
“Blue
Skies”
“Big Scary”
“Hard
Tucson Water’s Scenarios
Public Willing
to Pay Extra for
“Enhanced”
Water Quality
Surface
Enhancement
Enhanced
Recharge
Recharge
Only
Industry
Standard
Public Only
Willing to Pay
Minimum to Meet
EPA Standards
Some “Direct”
Treatment of CAP
Water is Acceptable
All CAP Water Must
Be Recharged
Before Treatment
Copyright © 2013 Southwest Water Resources Consulting, LLC
YES
NO
YES
Identifying the Functional Implications
What does each scenario mean to you?
◆
WHAT
are the emerging challenges given your issue?
WHAT are the envisioned vulnerabilities and risks?
◆
HOW is each scenario constrained? What are the
bottlenecks? HOW can you gain or lose given these
“limits” in your envisioned operative environment?
◆
HOW is each scenario freer and more open? WHAT
are the emerging capabilities & opportunities? HOW
can you benefit or lose given this “openness”?
◆
WHO else “wins” and “loses” given this future?
Implications Summary
“Blue Skies”
(Scenario A)
“Hard Labor”
(Scenario B)
“Big Scary”
(Scenario C)
“Touchy Feely”
(Scenario D)
Multi-National
&
National
•
Implication A
•
Implication B
•
Implication AA
Multi-State
&
State
•
Implication C
•
Implication D
•
Implication E
County/
Municipal/
Local
•
Implication F
•
Implication G
Organizational
(Internal)
•
Implication H
•
Implication I
•
Implication J
•
Implication K
Implications Summary
“Blue Skies”
(Scenario A)
“Hard Labor”
(Scenario B)
“Big Scary”
(Scenario C)
“Touchy Feely”
(Scenario D)
Multi-National
&
National
•
Implication A
•
Implication B
•
Implication AA
•
Implication B
•
Implication L
•
Implication M
•
Implication B
•
Implication L
•
Implication T
•
Implication A
•
Implication B
•
Implication L
•
Implication AA
Multi-State
&
State
•
Implication C
•
Implication D
•
Implication E
•
Implication D
•
Implication E
•
Implication N
•
Implication D
•
Implication N
•
Implication U
•
Implication V
•
Implication C
•
Implication D
•
Implication V
•
Implication BB
County/
Municipal/
Local
•
Implication F
•
Implication G
•
Implication G
•
Implication O
•
Implication P
•
Implication G
•
Implication O
•
Implication W
•
Implication X
•
Implication F
•
Implication G
•
Implication W
•
Implication CC
Organizational
(Internal)
•
Implication H
•
Implication I
•
Implication J
•
Implication K
•
Implication H
•
Implication I
•
Implication Q
•
Implication R
•
Implication H
•
Implication Q
•
Implication R
•
Implication Y
•
Implication H
•
Implication I
•
Implication R
•
Implication Z
Identifying Potential Adaptive Actions
What can you do to prepare for each scenario?
◆
How can the EMERGING VULNERABILITIES and
RISKS be addressed for you to operate successfully?
◆
How can constraints and deficiencies be REMEDIED
or MITIGATED?
◆
What would you do now or in the near-to-mid term if
you knew the future would turn out like this?
◆
What would you no longer be able to do in this
future? What would you cut back or stop doing?
◆
What (in)actions would JEOPARDIZE future viability?
What might you do that would make things HARDER?
Potential Action Summar
y
“Blue Skies”
(Scenario A)
“Hard Labor”
(Scenario B)
“Big Scary”
(Scenario C)
“Touchy Feely”
(Scenario D)
Multi-National
&
National
•
Action A
•
Action B
Multi-State
&
State
•
Action C
•
Action D
•
Action E
County/
Municipal/
Local
•
Action F
•
Action G
•
Action H
•
Action I
Organizational
(Internal)
•
Action J
•
Action K
•
Action L
•
Action M
Potential Action Summary
“Blue Skies”
(Scenario A)
“Hard Labor”
(Scenario B)
“Big Scary”
(Scenario C)
“Touchy Feely”
(Scenario D)
Multi-National
&
National
•
Action A
•
Action B
•
Action A
•
Action N
•
Action O
•
Action P
•
Action A
•
Action N
•
Action O
•
Action P
•
Action A
•
Action B
•
Action N
•
Action AA
Multi-State
&
State
•
Action C
•
Action D
•
Action E
•
Action C
•
Action E
•
Action Q
•
Action R
•
Action C
•
Action E
•
Action Q
•
Action R
•
Action W
•
Action C
•
Action E
•
Action Q
•
Action R
•
Action BB
County/
Municipal/
Local
•
Action F
•
Action G
•
Action H
•
Action I
•
Action F
•
Action H
•
Action S
•
Action T
•
Action F
•
Action H
•
Action T
•
Action X
•
Action Y
•
Action F
•
Action H
•
Action T
•
Action Y
•
Action CC
Organizational
(Internal)
•
Action J
•
Action K
•
Action L
•
Action M
•
Action J
•
Action L
•
Action M
•
Action U
•
Action V
•
Action J
•
Action L
•
Action U
•
Action V
•
Action Z
•
Action J
•
Action L
•
Action U
•
Action Z
•
Action DD
Identifying Robust & Prudent Actions
All Potential
Actions
Scenario A
A , B, C, D, E
F, G, H, I, J, K
L, M, BB, DD
Scenario B
A, C, E, F, H,
J, L, M, N, O
P, Q, R, S, T,
U, V, W, Y
Scenario C
A, C, E, F, H
J, L, N, O, P, Q
R, T, U, V, W
X, Y, Z
Scenario D
A, B, C, E, F
H, J, L, N, Q
R, T, U, Y, Z
Identifying Robust & Prudent Actions
All Potential
Actions
Scenario A
A , B, C, D, E
F, G, H, I, J, K
L, M, BB, DD
Scenario B
A, C, E, F, H,
J, L, M, N, O
P, Q, R, S, T,
U, V, W, Y
Scenario C
A, C, E, F, H
J, L, N, O, P, Q
R, T, U, V, W
X, Y, Z
Scenario D
A, B, C, E, F
H, J, L, N, Q
R, T, U, Y, Z
AA, BB, CC, DD
Potentially
Robust Actions
A, C, E, F, H
J, L, N, Q, R
T, U, V, Y
THESE ARE
“LOW-REGRET”
ACTIONS
COMMON
TO
MULTIPLE
FUTURES
Identifying Robust & Prudent Actions
All Potential
Actions
Scenario A
A , B, C, D, E
F, G, H, I, J, K
L, M, BB, DD
Scenario B
A, C, E, F, H,
J, L, M, N, O
P, Q, R, S, T,
U, V, W, Y
Scenario C
A, C, E, F, H
J, L, N, O, P, Q
R, T, U, V, W
X, Y, Z
Scenario D
A, B, C, E, F
H, J, L, N, Q
R, T, U, Y, Z
Potentially
Robust Actions
A, C, E, F, H
J, L, N, Q, R
T, U, V, Y
Potentially
Prudent Actions
O, P, W, Z
BB, DD
THESE
ACTIONS
DEPEND ON
PERCEIVED
RISKS &
WHAT WE
MIGHT DO
TO
CONTAIN
Identifying Robust & Prudent Actions
All Potential
Actions
Scenario A
A , B, C, D, E
F, G, H, I, J, K
L, M, BB, DD
Scenario B
A, C, E, F, H,
J, L, M, N, O
P, Q, R, S, T,
U, V, W, Y
Scenario C
A, C, E, F, H
J, L, N, O, P, Q
R, T, U, V, W
X, Y, Z
Scenario D
A, B, C, E, F
H, J, L, N, Q
R, T, U, Y, Z
AA, BB, CC, DD
Potential
Robust Actions
A, C, E, F, H
J, L, N, Q, R
T, U, V, Y
Potential
Prudent Actions
O, P, W, Z
BB, DD
Potential
Recommended
Actions
C, H, J, L, N,
O, P, R, T, Y
W, DD
FINAL
SELECTION
WILL DEPEND
ON
ADDITIONAL
ANALYSIS
AND ONE’S
RISK
TOLERANCE
&
STRATEGY
Developing an Effective Strategic Plan
Some Things to Consider
◆
Which “LOW-REGRET” strategies & actions are
common to MOST FUTURES?
◆
Which actions apply only to one or two but could be
prudent hedges to off-set BIG POTENTIAL RISKS?
◆
Which potential actions could serve MULTIPLE
PURPOSES over a WIDE RANGE OF CONDITIONS?
◆
How might an evolving scenario BE INFLUENCED so
that it can be more likely ACHIEVED or AVOIDED?
◆
What actions could increase the potential for “HIGH
Mapping a Scenario Strategy
Pre-Positioned and Prepared for Whatever Happens
Scenario
A
Scenario
B
Scenario
C
Scenario
D
Copyright © 2013 Southwest Water Resources Consulting, LLC
NOW
ROBUST STRATEGIES & ACTIONS COMMON TO
ALL/MOST FUTURES
WITH SOME HEDGES
CONTINGENT STRATEGIES & ACTIONS COMMON TO FUTURES A & B CONTINGENT STRATEGIES & ACTIONS COMMON TO FUTURES C & D ACTIONS For A ACTIONS For B ACTIONS For C ACTIONS For D
Tucson’s “Weighted Robust” Strategy
Pre-Positioned and Prepared in 2004
A
Surface
Enhancement
B
Industry
Standard
C
Recharge
Only
D
Enhanced
Recharge
STRATEGIES &
ACTIONS COMMON TO
ALL/MOST FUTURES
WITH SOME HEDGES
STRATEGIES
& ACTIONS
COMMON TO
FUTURES A & B
STRATEGIES
& ACTIONS
COMMON TO
FUTURES C & D
2004
Initiating Implementation
Moving Forward With a Flexible Plan
B
Industry
Standard
C
Recharge
Only
D
Enhanced
Recharge
Copyright © 2013 Southwest Water Resources Consulting, LLC
2004
Action Set #1
CAVSARP Expansion
CAP Delivery Flexibility
Rch vs Dir. Treat Study
Disinfection Evaluation
WQ/TDS Assessment
Public Preferences
SAVSARP Feasibility
Pipe Routing Studies
SOME DIRECT
TREATMENT
ALL
RECHARGE
A
Surface
Enhancement
A
Surface
Enhancement
B
Industry
Standard
C
Recharge
Only
D
Enhanced
Recharge
X
X
GO
2004
Action Set #1
CAVSARP Expansion
CAP Delivery Flexibility
Rch vs Dir. Treat Study
Disinfection Evaluation
WQ/TDS Assessment
Public Preferences
SAVSARP Feasibility
Pipe Routing Studies
2006
SOME DIRECT
TREATMENT
X
ALL
RECHARGE
At First Junction
A
Surface
Enhancement
B
Industry
Standard
C
Recharge
Only
D
Enhanced
Recharge
Copyright © 2013 Southwest Water Resources Consulting, LLC
