Scenario Analysis

Scenario Description

A scenario is a story or story outline. Thinking about the future normally involves creating alternative scenarios, or stories, about the possible interactive evolution of variables. Some such scenarios are exploratory and consider the possible unfolding of different futures around key uncertainties, such as the rate of some aspect of technological advance or the fragility of some element in the global environment. Other scenarios are normative and develop stories about preferred futures, such as a global transformation to sustainability.

Scenarios in a computer model typically are built from multiple interventions that collectively help create a coherent story about the future. Often, but somewhat imprecisely, the word scenario is used more loosely to refer to any intervention (such as the change of a fertility rate for a country or an alternative assumption about oil resources).

Scenarios or interventions with respect to what? When IFs or other computer simulations are "run", without making any changes to parameters or initial conditions specified as the default values, they generate a forecast that is typically called the Base Case. The IFs Base Case, always available when a model session is initiated, is itself a scenario. Sometimes the Base Case is incorrectly referred to as a trend extrapolation or a "business as usual" scenario. More accurately, however, the IFs Base Case is a computation that involves the full dynamics of the model and therefore has very nonlinear behavior, often quite different from trends. It is a good starting point for scenario analysis for two reasons. First, it is built from initial conditions of all variables and on parameters that have been given reasonable values from data or other analysis. These initial conditions and parameters make up the package of interventions that constitute the Base Case scenario. Second, the Base Case is periodically analyzed relative to the forecasts of many other projects across the range of issue areas covered by IFs and is to a degree "tuned" for internal coherence and consistency with insights of respected forecasters.

There are two file types involved in IFs scenario creation: scenario files (or Scenario-Load-Files) and run files (or Run-Result-Files). Scenario files, the first type, are saved with an extension of .sce. Very small in size, .sce files contain information that the IFs model uses to create alternative scenarios; i.e., .sce files contain a list of parameter values that diverge from the Base Case. It is important to note that scenario files do not contain any forecasts. Forecasts are generated and saved only in the second type of file, run files with the .run extension. Because they contain forecasts of all IFs variables and parameters, .run files are much larger than scenario files. Although the IFs standalone model software allows users to save both types of files, web users are only able to save .sce files to retrieve their parameters and regenerate their scenarios.

In addition to the Base Case, most versions of IFs will include a number of other previously-run scenarios (see Lesson 0: IFs Vocabulary for additional important terminology), typically those for the Global Environmental Outlook (GEO) of the United Nations Environmental Program (UNEP). If you look, for instance, at the Flexible Displays form, you will see a list of previously-run scenarios in the box at the bottom of the screen. Because those have already been run, based on a set of interventions constituting their foundations, the user can immediately display their results.

Quick Scenario Analysis with Tree Overview

What is a scenario?

This section of the help menu will guide you through a brief description of a scenario as well as the Base Case used in IFs and will discuss the difference between Scenario-Load-Files (.sce files) and Run-Result-Files (.run files).

After you have finished with Scenario Description, you should be able to answer/do the following:

• What is a scenario?
• What is the Base Case of IFs?
• What is the difference between a Scenario-Load-File and a Run-Result-File?

Introduction to the Scenario Tree:

The Quick Scenario Analysis with Tree allows you to call up or to mix and match an extensive number of your own interventions and/or a set of stored scenario intervention files. This feature of IFs allows you to change any parameter and selected initial conditions used in the model, thus shaping forecasts. Use the Quick Scenario Analysis with Tree to create Scenario-Load-Files and/or run scenario files through IFs in order to create Run-Result-Files that you can use throughout IFs.

Below is the main menu of the Quick Scenario Analysis with Tree:

IMAGEhttp://www.du.edu/ifs/help/use-online/scenario/quick/overview.html

Loading Previously-Structured Scenarios

The Quick Scenario Analysis with Tree allows you to load the previously-structured scenarios and user-saved scenarios. From the Scenario Files or the Adding Scenario Component menu options of the Quick Analysis with Tree, you can load a wide range of pre-packaged scenario intervention files and see what interventions were made in the files.

After you have finished with this topic http://www.du.edu/ifs/help/use-online/scenario/quick/loading.html , you should be able to do/answer the following:

• How does a previously-structured scenario differ from a previously-run scenario?
• What previously-structured scenarios came installed in your version of IFs?
• How does one search through the scenarios until you find one that deals with environmental change (or some other specific topic of interest)?
• What do you have to click on to understand exactly what is being changed by different previously-structured scenarios?

Finding the Intervention You Want

In order to tailor your scenario file to your needs, you must be able to quickly find the parameter you are looking for.

After you have finished with this topic http://www.du.edu/ifs/help/use-online/scenario/quick/finding.html , you should be able to do/answer the following:

• What is the organizational logic of the Scenario Tree?
• What is the difference between the Selected Initial Conditions, Relationship Parameters and the other five main categories used in the Scenario Tree?
• How would you search for a specific parameter that might help shape the scenario intervention of interest to you?

Exploring and Changing Parameters

Once you have found the parameter you are looking for, for instance, the total fertility rate multiplier (Households/Individuals, Demographic/Population, tfrm), a number of new options become available.

After you have finished with this topic http://www.du.edu/ifs/help/use-online/scenario/quick/exploring.html , you should be able to do/answer the following:

• How do you select a parameter to change?

What do the Select, Drivers, Explain, View Equations and Define pop-up options (when you click on a parameter name from the tree) all allow you to do?

• How do you clear parameter changes from the Scenario Tree?
• How do you create a Run-Result-File?
• How do you save the results?
• How can you display the results of your change in IFs?

Activate Pre-run Scenario(s) for Display

Although not accessed through the scenario tree, it is important to know that hundreds of scenarios (the parameters for which are accessible in the tree) have been pre-run with the full forecasting results stored on the IFs server. It is not necessary for you to load the parameters and re-run these scenarios unless you want to create variations of them with new parameters or new parameter values. Instead you can go to the Display/Activate Pre-Run Scenario for Display http://www.du.edu/ifs/help/use-online/display/activate.html sub-option of the Main Menu, choose the pre-run scenario, and then display results from it using any IFs display option.