How to apply climate scenarios

For the public sector, applying climate scenarios can take many different forms.

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Ways to apply climate scenarios

Before you select or develop your climate scenarios, you need to decide how you’ll apply the scenarios. Applying the scenarios to a policy, decision or strategy you want to test can take various  forms.

Stress testing

Scenarios can be used to stress-test or wind-tunnel policy options. This process allows policymakers to determine whether a policy option would perform well under different and sometimes difficult circumstances and how to make them more robust across different plausible futures.

Future pathways thinking

Scenarios provide insight into the potential policy implications for your focal question(s) or areas. By thinking systematically about future pathways, policymakers can reflect better on future policy developments and relevant present priorities.

Developing futures literacy

Through participatory processes including creative foresight exercises, such as serious games, participants can discuss possible future policy designs, and gain new perspectives on the future.

Climate scenario analysis

Climate scenario analysis is a process for systematically exploring the effects of a range of plausible future events. Engaging in this process helps an entity to identify its climate-related risks and opportunities and develop a better understanding of the resilience of its business model and strategy.

Further guidance on applying scenarios

Guidance  

Published by 

Preview 

Policy Methods Toolbox: Futures thinking [DPMC]

Department of Prime Minister and Cabinet 

Futures thinking is also known as foresight, strategic foresight and futures studies. 

 

On this page: 

  • About futures thinking 
  • Futures thinking and the policy process 
  • Why you should use it 
  • What it involves 
  • What you'll get out of it 
  • Ideal circumstances for use 
  • Limitations 
  • Tools or concepts 
  • References and guides  
  • Case studies 
  • Communities of Practice 
The Futures Toolkit: Tools for Futures Thinking and Foresight Across UK Government [UK Government Office for Science]

UK Government Office for Science

The Futures Toolkit is a key resource that policy professionals can use to embed long term strategic thinking in the policy and strategy process.

The Toolkit is designed primarily as a resource for those who are new to futures thinking but should also prove useful to more experienced practitioners.

The Toolkit covers approaches such as:

  • Driver mapping
  • Scenarios
  • Policy stress-testing
  • Other futures and foresights material

Wind Tunnelling [Government of Alberta]

Government of Alberta

This webpage from the Government of Alberta, Canada, describes a methodology for wind-tunnelling to test policies or strategies using scenarios.

The Use of Scenario Analysis in Disclosure of Climate-related Risks and Opportunities [TCFD]

Task Force on Climate-related Financial Disclosures (TCFD) 

This page contains extracts and highlights from the TCFD final recommendations Technical Supplement that may help you understand scenario analysis and its usefulness.  

Section D: Scenario Analysis and Climate-Related Issues in Recommendations of the Task Force on Climate-related Financial Disclosures [TCFD]

 

Task Force on Climate-related Financial Disclosures (TCFD) 

Scenario analysis is a well-established method for developing strategic plans that are more flexible or robust to a range of plausible future states. 

The Task Force believes that organisations should use scenario analysis to assess potential strategic, and financial implications of climate-related risks and opportunities. 

Fact Sheet: Scenario analysis and climate-related disclosures [XRB]

XRB 

Clarifying the definition and purpose of scenario analysis for Aotearoa New Zealand Climate Standard 1: Climate-related Disclosures (NZ CS 1). 

Note this resource has been designed for climate reporting entities captured under the Financial Sector (Climate-related Disclosures and Other Matters) Amendment Act 2021. Aspects of the guidance may not apply to non-reporting entities. 

How climate scenarios differ from climate change risk assessment

Downscaled climate projections for New Zealand (based on the IPCC scenarios) are also used to carry out climate change risk assessments – which are not the focus of this toolkit.

Whereas climate scenarios inform strategy through the use of plausible futures, climate change risk assessments identify risks to things of value in communities due to potential changes in the climate. Risk assessments can help to prioritise risks, driving targeted action and investment.

Resources

  • A guide to local climate change risk assessments  — Read this guide to understand more about how climate change scenarios and projections are used in the context of climate change risk assessments
  • Te Huringa ki te Rangi: 8-step decision-making model [NIWA website] developed in collaboration between the hapū of Tangoio Marae, Maungaharuru-Tangitū Trust and NIWA — the model can be used by other Māori, indigenous and coastal communities grappling to understand and evaluate climate change impacts and risks, and how to integrate these into development plans.

Further guidance on applying climate scenarios

Guidance to develop climate change scenarios for public sector planning and policy: GNS Science Consultancy Report 2023 - to be published

Staff guidance entity scenario development [External Reporting Board website