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Module In order to clarify the distinctions among the various approaches to link policy and scenario analysis, it
6 is useful to consider the following questions:

?
Are there existing policies you wish to explore as part of the scenario exercise?
A standard use of scenario analysis is to compare the feasibility, effectiveness, and broader
impacts of alternative policies (or combinations thereof), e.g., taxes vis-à-vis tradable permits
9-12 December, 2013 on certain pollutants. This can be done by assessing scenarios that differ only with respect to

the absence or inclusion of the policies of interest. Remembering the basic uncertainties that
underlie the use of scenarios, the robustness of existing policies can be assessed by exploring

their feasibility, effectiveness and broader impacts across a range of scenarios that differ with
respect to other significant factors.

If there are no relevant, existing policies, then one purpose of the scenario exercise should be the

identification of policy options. Even where they do exist, the exercise can, of course, be useful for
expanding the set of policy options for consideration.

? Is there a preconceived end vision, or at least some aspects of a vision, i.e., specific targets?

In many cases, a scenario exercise is used to explore the feasibility and broader implications,
e.g., tradeoffs, of meeting a specific target, e.g., an 80 per cent reduction in CO emissions by
2
2050. If the vision is used to define the scenarios, i.e., the range of scenarios to be explored is
restricted to only those for which the target is achieved, the exercise takes on the character

of a standard back cast. At a minimum, the presence of a preconceived end vision implies that
there are at least some metrics against which a scenario and its policies can be evaluated as
being “successful.”

In the absence of any preconceived vision, the question of how to evaluate a scenario and the
impacts of policies, in particular any definition of “success,” is less clear. There will almost certainly
be metrics that can be used for this purpose. Even where clear targets do exist, these other metrics
are important for evaluating the broader implications of achieving the targets.

? Are the effects of a policy of such magnitude that they would fundamentally alter the basic
structure of the scenario?

Depending on how the scenario is defined and the perspective of the person using them,
policies can be seen as essentially determining the scenario or as merely affecting some aspects
of it. For example, if a scenario is defined by the international trade in agricultural commodities,
a group like the WTO or some larger countries could conceive of policies that will alter the
overall level and terms of this trade. Small countries and individual producers, on the other

26 Scenario Development and Analysis