Scenario Planning Applied
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1 Scenario Planning Applied Ralph P. Marra Southwest Water Resources Consulting, LLC Sonoran Institute Scenario Planning Webinar December 11, 2013
2 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 Provide Adaptive Flexibility
3 SCENARIO PLANNING TWO BASIC TYPES WITH MANY VARIATIONS TRADITIONAL STAKEHOLDERS WITHIN AN ORGANIZATION VS HYBRIDIZED STAKEHOLDERS FROM MULTIPLE ORGANIZATIONS
4 Scenarios and Uncertainty A Range of Purposes and Applications Aligning Internal/External Stakeholders General System Learning More Decision Based More Exploratory Oriented Strategic Decision Making Increasing Risk Awareness Source: Modified from Global Business Network
5 Defining the Range of Future Possibility Developing the End-Member Futures Near-Term Robust/ Low-Regret Actions Longer-Term Contingent/Adaptive Actions A Now B Future Decision Points D C Source: Modified from Denver Water/Tucson Water
6 Source: Central Arizona Project Prediction is difficult, especially about the future. --Yogi Berra
7 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
8 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
9 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
10 Many Factors Can Influence a Water Issue Financing Politics The Environment Emerging Contaminants New Supply Sources Supply Reliability How Many of These are Certain? Public Perception Economic Health Climate Change Growth Pressure Media Coverage Conservation Drought
11 Denver Water s Situation in 2008 Denver Water experienced its worst annual drought of record in 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
12 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 in the longer term?
13 Tucson Water s Situation in 2004 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 UTILITY WAS UNCERTAIN ABOUT HOW TO PROCEED
14 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 Municipal Wastewater Effluent
15 Using Scenarios in Water Utility Planning Water Plan: (2004) Chapter 6: The Planning Process Chapter 7: The Recommended Plan Plate 1: Recommended Plan Summary Appendix D: Planning Methodology
16 An Example of a Scenario Process The Nine-Step Program 1 3 Orient the 2 Differentiate Identify the team & frame the and rank the issue s driving focal question / driving forces forces issue 6 Develop the 5 Create the scenario scenario / future narratives framework 4 Identify the most critical certainties and uncertainties 8 Identify actions 9 7 Map a strategy by Explore the that address the identifying ways implications of needs of each & forward & indicators each future multiple futures of future change
17 What are the Most Important Drivers? Understanding the System s Influences Politics Financing New $upply $ources Energy System Security Media Coverage Climate Variability Growth Pre$$ure Environmental Needs Emerging Contaminants Aging Infra$tructure Public Perception Water Rate$ Water Quality Technology Regulation Economy Drought Conservation
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19 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
20 Rank the Driving Forces Identifying the Scenario Building Blocks Increasing Uncertainty MOST IMPORTANT & UNCERTAIN MOST IMPORTANT & CERTAIN Source: Modified from Tucson Water Increasing Importance
21 Ranking Tucson Water s Driving Forces Increasing Uncertainty Source: Modified from Tucson Water Increasing Importance
22 Identifying the Most Critical Uncertainties High-Impact Drivers that Can Tip the Future Increasing Uncertainty (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) Source: Modified from Tucson Water Increasing Importance
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25 The Classical Scenario Matrix Tucson Water s Four End-Member Futures YES Some Direct Treatment of CAP Water is Acceptable NO Public Only Willing to Pay Minimum to Meet EPA Standards Scenario B (-X,+Y) Scenario C (-X,-Y) Y Scenario A (+X,+Y) Scenario D (+X,-Y) X YES Public Willing to Pay Extra for Enhanced Water Quality NO All CAP Water Must Be Recharged Before Treatment
26 The Scenario Continuum Approach Exploring Two End-Member Futures Scenario B Scenario A
27 The Scenario Continuum Approach Exploring Two End-Member Futures Scenario B Scenario A Uncertainty-1 (NO) Uncertainty-2 (NO) Uncertainty-3 (YES) Uncertainty-4 (NO) Certainty-A Certainty-B Uncertainty-1 (YES) Uncertainty-2 (YES) Uncertainty-3 (NO) Uncertainty-4 (YES) Certainty-A Certainty-B
28 The Scenario Continuum Approach Exploring Two End-Member Futures Scenario B Uncertainty-1 (NO) Uncertainty-2 (NO) Uncertainty-3 (YES) Uncertainty-4 (NO) Certainty-A Certainty-B Many Critical Uncertainties Exploring Compelling Possibilities Scenario A Uncertainty-1 (YES) Uncertainty-2 (YES) Uncertainty-3 (NO) Uncertainty-4 (YES) Certainty-A Certainty-B
29 The Dynamic Planning Environment With Its Certainties and Many Uncertainties
30 Simplifying the Planning Environment Developing Credible Stories about Possible Futures Story B Story A Story C Story D = Certain Elements = Possible Elements
31 Defining the Range of Future Possibility Credible Challenging Divergent
32 The Power of the Narrative A Common Meta Scenario Structure Hard Labor Blue Skies Big Scary Touchy Feely
33 Tucson Water s Scenarios YES Some Direct Treatment of CAP Water is Acceptable NO Public Only Willing to Pay Minimum to Meet EPA Standards Industry Standard Recharge Only Surface Enhancement Enhanced Recharge YES Public Willing to Pay Extra for Enhanced Water Quality NO All CAP Water Must Be Recharged Before Treatment
34 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? HOW might the losers react? WHAT might this mean to you and your endeavor?
35 Multi-National & National Multi-State & State County/ Municipal/ Local Implications Summary Blue Skies (Scenario A) Implication A Implication B Implication AA Implication C Implication D Implication E Implication F Implication G Hard Labor (Scenario B) Big Scary (Scenario C) Touchy Feely (Scenario D) Organizational (Internal) Implication H Implication I Implication J Implication K
36 Multi-National & National Implications Summary Blue Skies (Scenario A) Implication A Implication B Implication AA Hard Labor (Scenario B) Implication B Implication L Implication M Big Scary (Scenario C) Implication B Implication L Implication T Touchy Feely (Scenario D) 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 S Implication H Implication Q Implication R Implication Y Implication Z Implication H Implication I Implication R Implication Z Implication DD
37 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?
38 Multi-National & National Potential Action Summary Blue Skies (Scenario A) Action A Action B Hard Labor (Scenario B) Big Scary (Scenario C) Touchy Feely (Scenario D) 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
39 Multi-National & National Potential Action Summary Blue Skies (Scenario A) Action A Action B Hard Labor (Scenario B) Action A Action N Action O Action P Big Scary (Scenario C) Action A Action N Action O Action P Touchy Feely (Scenario D) 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 J Action L Action U Action V Action J Action L Action U Action Z
40 Identifying Robust & Prudent Actions All Potential Actions Scenario A Scenario B Scenario C Scenario D A, B, C, D, E F, G, H, I, J, K L, M, BB, DD A, C, E, F, H, J, L, M, N, O P, Q, R, S, T, U, V, W, Y A, C, E, F, H J, L, N, O, P, Q R, T, U, V, W X, Y, Z A, B, C, E, F H, J, L, N, Q R, T, U, Y, Z AA, BB, CC, DD
41 Identifying Robust & Prudent Actions Scenario A Scenario B Scenario C Scenario D All Potential Actions A, B, C, D, E F, G, H, I, J, K L, M, BB, DD A, C, E, F, H, J, L, M, N, O P, Q, R, S, T, U, V, W, Y A, C, E, F, H J, L, N, O, P, Q R, T, U, V, W X, Y, Z 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
42 Identifying Robust & Prudent Actions All Potential Actions Potentially Robust Actions Potentially Prudent Actions Scenario A Scenario B Scenario C Scenario D A, B, C, D, E F, G, H, I, J, K L, M, BB, DD A, C, E, F, H, J, L, M, N, O P, Q, R, S, T, U, V, W, Y A, C, E, F, H J, L, N, O, P, Q R, T, U, V, W X, Y, Z A, B, C, E, F H, J, L, N, Q R, T, U, Y, Z AA, BB, CC, DD A, C, E, F, H J, L, N, Q, R T, U, V, Y O, P, W, Z BB, DD THESE ACTIONS DEPEND ON PERCEIVED RISKS & WHAT WE MIGHT DO TO CONTAIN THEM
43 Identifying Robust & Prudent Actions Scenario A Scenario B Scenario C Scenario D All Potential Actions A, B, C, D, E F, G, H, I, J, K L, M, BB, DD A, C, E, F, H, J, L, M, N, O P, Q, R, S, T, U, V, W, Y A, C, E, F, H J, L, N, O, P, Q R, T, U, V, W X, Y, Z 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
44 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 REGRET outcomes? What should you not do?
45 Mapping a Scenario Strategy Pre-Positioned and Prepared for Whatever Happens 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 Scenario A Scenario B Scenario C Scenario D
46 Tucson s Weighted Robust Strategy Pre-Positioned and Prepared in STRATEGIES & ACTIONS COMMON TO ALL/MOST FUTURES WITH SOME HEDGES STRATEGIES & ACTIONS COMMON TO FUTURES A & B STRATEGIES & ACTIONS COMMON TO FUTURES C & D A Surface Enhancement B Industry Standard C Recharge Only D Enhanced Recharge
47 Initiating Implementation Moving Forward With a Flexible Plan 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 B Industry Standard C Recharge Only D Enhanced Recharge
48 At First Junction A Decision that Tipped Tucson s Future 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 GO X SOME DIRECT TREATMENT ALL RECHARGE X A Surface Enhancement X B Industry Standard C Recharge Only D Enhanced Recharge
49 Looking Beyond Old Futures Fade & New Ones Arise 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 GO X SOME DIRECT TREATMENT ALL RECHARGE? X A Surface Enhancement X B Industry Standard C Recharge Only D Action Set #2 SAVSARP Construction Enhanced Pipe Routing Studies Recharge CAVSARP Expansion CAP Delivery Flexibility WQ/TDS Assessment Triple-Bottom-Line Copyright Eval 2013 Southwest Water Resources Consulting, LLC
50 Scenario Lessons Learned Obtain explicit support from upper management Engage a wide range of subject-matter experts Establish a smaller core planning team to reconcile differences generated in the larger facilitated sessions & to provide guidance Allow for intense professional disagreements Keep the deliberative conversation moving and alive the Conversation is the Key Document what was done for those who follow
51 Thank You
Scenario Planning Applied Tucson Water s Experience
Scenario Planning Applied Tucson Water s Experience Ralph P. Marra Responding to Change & Uncertainty Workshop Phoenix Carnegie Center March 7, 2012 Image Source: Tucson Water Scenario Planning in Brief
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