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Alternative Scenarios

Module: Set of Alternative scenario

In UC1, where ex-ante estimation for a single RI is made, the alternative scenarios are used to check the robustness of the RI project in the defined hosting region.

This module is grounded on (i) the initial success scenario hypothesis drafted in the System Dynamics Module, (ii) the impact estimation against that scenario carried out under the impact assessment modules S&T, Eco, Jobs and Life, and (iii) the assessment of the associated risks (Risk Module). The main objective here is to outline, through a Scenario Workshop, a set of alternative scenarios for plausible future developments that explore major possible deviations from the success scenario hypothesis. Alternative scenarios are built to illuminate possible development driven by a set of drivers with high impact and yet high uncertainty that are critical for the RI and its hosting environment and could be disruptive in a positive or negative way to the "RI-region" system evolution.

The success scenario is developed in the System Dynamics Module by exploring present trends and drivers and it outlines a vision of the future at the time horizon set. Its development follows the so called exploratory approach where the process of scenarios development starts from the present moment and makes projections towards the future time horizon.

The normative approach for scenario development is the approach where the outline of a desirable vision of the future at the time horizon set is made prior to devising actions for designing the present to reach the desired future.

In this module, where drivers with high uncertainty are taken into account, along with possible external factors of disruptive and unexpected nature, it is appropriate to use the normative approach for assessing alternative scenarios and anticipating the RI system's deviation from its evolutionary future vision. Guidelines to this approach are given below.

Prior to the Alternative Scenarios Workshop, the case study team has to do the following preparatory work:

• Preparatory Task 1. Update drivers of the RI-region system.

Drivers are forces that influence the development of the analysed system and allow change to occur. They have continuous character and can "drive" the system in different directions. Drivers can be identified as underlying forces in existing and emerging economic, political, S&T, social, demographic and environmental trends.

The case study team prepares, as input to the Workshop, the list of drivers to be used for the set of alternative scenarios (see Fig. 1). The list of drivers is a combination of the drivers already identified in the System Dynamics Module and the drivers behind the socio-economic (S-E) impacts estimated and categorised in the Modules S&T, Eco, Jobs and Life. The case study team is free to modify or reformulate some drivers if the results from the impact modules have uncovered new forces stemming from the S-E impacts generated by the RI, or new information and perspectives need to be taken into account not considered in the initial success scenario. In sum-up, the information from these modules needs to be screened for compiling a more comprehensive list of drivers.


Figure 1.

• Elicit a list of 'wild cards'.

Besides drivers, which are forces with continuous character and traceable evolution, there are certain factors with a disruptive and unexpected nature, called "wild cards" that likewise need to be considered while anticipating alternative future developments. "Wild cards" are usually the so-called "force-majeure" events or circumstances (e.g. natural disasters, terrorist attacks, unexpected supply shut-downs, etc.), with low probability but with very high impact. They are potentially disruptive (negatively or positively), beyond the control of the RI and are rapidly and unexpectedly moving. The Risk Module can be used by the case study team to list some "wild cards" stemming from the categorised risks.


Figure 2 – Example of 'wild cards" elicited from the Risk

The list of drivers drawn from the System Dynamics Module, and the S&T, Eco, Jobs and Life Modules, and the list of "wild cards" shall serve as inputs to the Alternative Scenario Workshop.

Guidelines for the Alternative Scenario Workshop:

  • Setting up an expert panel.

 

The expert panel is a group of no more than 15-20 experts, having a balanced representation in terms of

  • interdisciplinarity – a variety of disciplines related to the RI domain as well as economics, management, sociology,

and

  • stakeholder groups – representatives of the stakeholder groups relevant to the RI domain.

The most widely used technique for setting up an expert panel is nominations and co-nominations. The case study team shall define the final composition of the expert panel.

  • Ranking the key drivers by impact and uncertainty

 

The drivers on the list prepared by the analytical team as input to the workshop need to be further assessed, clustered and ranked by the expert panel.

Drivers are ranked according to their impact (importance) and uncertainty:
Drivers with high impact are significantly affecting the system explored.
Drivers with high uncertainty mean forces that can potentially generate a number of effects but with no clear evidence on which direction they shall develop in the future (e.g. political environment, financial conditions, etc.).
Drivers with low uncertainty mean forces/trends that are certain and are very likely to continue to play a role in the future in a relatively clear way (e.g. technological trends, demographic trends, etc.).   

    

Each driver is assessed by its impact and uncertainty and is positioned in the following classification matrix:

 


Figure 3.

Drivers with high importance and high uncertainty are most likely to incur significant deviations from the initial success scenario developed on the basis of extrapolation of factors and trends during the System Dynamics Module. They form the pool of drivers around which alternative scenarios can be built.

 

 

Figure 4.

 

  • Selection of two drivers and building the Alternative Scenarios Matrix

The expert panel shall, by discussion and consensus, select two most uncertain drivers from the pool of high-impact-high-uncertainty drivers identified above. These two drivers can be considered as ones that are most varying in their potential future expression, thus outlining a set of clearly distinguished alternatives to the success scenario from the System Dynamics Module.  

Each of the two drivers selected for the Alternative Scenarios Matrix may have a positive or negative direction of development with regards to the RI system. The positive and negative expressions and evolutions of each of the two drivers along the axes form a set of four alternative future scenarios.

Figure 5.

  • Development of the alternative scenarios narratives

 

Alternative Scenarios are plausible shared visions of the future, described in narrative form, that provide an opportunity for the RI to anticipate how to position itself in those future alternatives and to take its present day decisions in a strategic manner. Scenarios are creative internally consistent stories that “flesh out” the set of alternatives defined by the two axes of the most uncertain drivers.

Text Box: Why develop scenarios?  Þ	Scenarios provide a context in which managers can make decisions.   Þ	Scenarios are not forecast of the future, they do not predict the future, they only illuminate important drivers of change.   Þ	Understanding these drivers can only help managers take into consideration the range of possible future developments and take better informed decisions.   Þ	A strategy based on this insight is more likely to succeed.

 

The expert panel shall develop the 4 scenarios in a narrative form (a story) using as a basis the success scenario developed in the System Dynamics Module. The scenarios shall differ by the different evolutions of the two drivers selected as ones with highest impact and highest uncertainty. Each scenario shall describe what would the RI system look like at the time horizon set (in the System Dynamics module), with the major drivers leading to that alternative development and the major events occurred.

 


Figure 6.

  • Wild cards effects

 

Examining the impact of “wild cards” within the framework of a given scenario is worthwhile for checking the RI system’s reaction to unexpected, surprising, disruptive, force-majeure events. Even though such shocks can hardly be anticipated, their consideration in advance brings valuable support to taking long-term decisions.


Figure 7.

 

The expert panel is to apply the “What if…?” for assessing the impact of “wild cards” on a given scenario. One scenario can be “checked” against one or more “wild cards”. There are no exhaustive criteria for selecting “wild cards” but some of the following could serve as guidance:

  • the “wild card” should be appropriate to the scenario, i.e. it is recommendable to be associated with the RI domain and the topic of the scenario, in order to uncover useful additional information.
  • It should be as original as possible, i.e. not taken into account in the process of scenario development thus far.
  • “Wild cards” could be negative, i.e. would undermine the scenario constructed (an earthquake or another natural disaster for a nuclear RI), or positive, i.e. ones that could bring considerable valuable impact on the RI system, e.g. a scientific breakthrough beyond the expectations for the RI domain advancements.
  • In order to avoid “prejudice” or to bring more creativity and open-mindedness to the process, it is recommendable to incorporate external expertise for assessing the impact of “wild cards” on the four scenarios developed.  

 

Practical aspects of Alternative Scenarios

Developing alternative scenarios to a success scenario has a number of practical aspects:

  • they help estimate the RI system’s variability in a given scenario incurred by forces beyond the control of the RI;
  • they help consider possible turning points or break points in the evolution of the RI system
  • they help to recognize alternatives and be better prepared to possible shocks to the RI system
  • they help the expert panel to cope with shortage of imaginative capacity

 

The scenarios are presented in a narrative form (Fig. 6 and Fig. 7). List of recommendations can be drawn out from the scenario narratives suggesting measures and actions for alleviating possible risks or for ceasing opportunities to the RI system outlined by each of the alternative scenarios.  The expert panel can speculate on possible ways to develop the desired future as well as ways to avoid undesired developments or ways to react to possible external unexpected shocks to the system.  These recommendations are not an action plan to the scenarios but are alerts to be aware of and thus make better strategic decisions on the RI system analysed.