Scenarios allow a better understanding of complex correlations in future contexts. Complex systems are being reduced to essential components but without losing sight of their interconnectedness.
A scenario is defined as “a coherent, internally consistent and plausible description of a possible future state of the world. It is not a forecast; rather, each scenario is one alternative image of how the future can unfold” (IPCC 2010). Hence it is not enough to develop and analyse only one scenario, but multiple scenarios need to be developed in order to demonstrate the diversity of potential future developments.
- are simplified descriptions of a potential future,
- are based on a consistent set of assumptions and not on probabilities,
- are group-subjective,
- do not predict the future but present a systematic consideration of the future.
The suggested scenario method presents a simplified application of the formative scenario analysis by Scholz & Tietje (2002) and is based on Fink et al. (2004), Burandt & Barth (2010) and Kosnow & Gaßner (2008).
Five steps of scenario analysis:
Step 1: Case and goal definition
Define the specific scope of the “scenario field”, which includes goals and research questions, a case description, system boundaries and a clear timeframe.
Step 2: Identification of key variables
In order to analyse the scenario field, relevant impact variables need to be identified and described. Distinguish between internal and external factors, which impact the system. In sustainability cases the impact variables could be clustered into social, environmental, economic and policy factors.
An influence matrix helps to identify interactions of the variables and informs which factors present active, passive, critical or buffer variables. Key factors that need to be considered are active and ambivalent variables. Active variables highly impact other variables, but are hardly affected by others, while critical variables both highly affect and are affected by other variables. They have a system-wide influence and hence are important factors in change processes.
Step 3: Scenario construction
After setting the future horizon (timeframe), possible developments of the key variables are identified, which are called “future projections”. The characteristics of the variables are described in more detail. It is recommended to construct three different scenarios, which are consistent and can be clearly differentiated from each other.
A consistency matrix helps to systematically assess the different forms of the possible projections, which are then checked by a specific software in order to identify consistent future scenarios.
Step 4: Scenario analysis and interpretation
The different scenarios are described in detail, e.g. on the basis of guiding questions. Specific characteristics, key drivers, “winners” and “losers” can be worked out and interpreted.
Step 5: Scenario transfer
Results of the developed scenarios for future planning will be highlighted in a final step. Based on the scenarios recommendations for actions will be developed in order to achieve or avoid the occurrence of specific scenarios.
Following figure provides an overview about the four step approach by Fink et al. (2004). It shows the variety of system factors in the beginning where key factors need to be identified, which then present starting points for scenarios, which are displayed in the figure in a so called “scenario trumpet”, which shows the range of possible future projections. Afterwards scenarios can be constructed and analysed in detail.
Fig.: Four steps of scenario development (Fink et al., 2004, p. 175)