How to develop climate scenarios

You can develop your own scenarios for testing a particular policy or strategy rather than using an existing set of scenarios.

Developing scenarios can be done by following the steps outlined on this page and by drawing on existing scenarios as a starting point.

The output of this step is a scenario planning team responsible for co-design and delivery of activities.

Assemble a scenario planning team

The first step in scenario development is to assemble a team, determine roles and responsibilities and identify how the process will be used by the organisation. 

Several different groups may be required.

• A group with higher-level governance responsibilities.
• A group of technical experts who will be involved in the scenario development process.
• A group in charge of facilitating the process, and documenting and synthesising information throughout the process.

Assemble a diverse team from across different functions and levels of the organisation to ensure that all relevant factors are considered.

Before starting the process, make sure your team has a good understanding of:

• Climate scenarios 
• Types of climate scenarios and how to use them
• How to apply climate scenarios 

Engagement with mana whenua

Climate change presents a complex challenge for Māori. The scenario development processes should give effect to rangatiratanga and mana whenua’s status as Treaty partners.

Organisations should establish a separate, dedicated scenario process or engage mana whenua early. Provide time and space for mana whenua who may be impacted, to define for themselves the problem, expectations, and anticipated outcomes of the process.

Policy makers should consider the Guidelines agreed by Cabinet for Treaty of Waitangi in policy development and implementation. 

Department of Prime Minister and Cabinet Treaty of Waitangi analysis.

Engagement with stakeholders

Bringing in a variety of perspectives will reduce the risk of ‘groupthink’ and defaulting to ‘business-as usual’ norms. To be useful, scenarios need to be challenging.

• Establish project 'buy in' with key internal stakeholders. This includes introducing stakeholders to what scenarios are, why you are developing them and how they will be used.
• Identify external stakeholders and communities using effective communication and participatory approaches.
• Information and input to scenarios can be complex at times. Agreeing on terminology to better reflect desired outcomes may be useful.

The output of this step is a statement on the scope of the scenario (or scenarios) and agreement on a focal question.

Agree on a focal question

Once the team has been assembled, the next step is to clarify the question to be addressed. The scenario team can provide clarity, direction, and boundaries to help define or identify the problem or guiding question for the project.

Scenarios can be developed to assess a portfolio of issues across multiple sectors in a region, state, or nation or focus on a discrete project within one sector or within an organisation.

In practice, the broader the scope of the project, the more generic the scenarios will become and the less decision-useful they may be. With a narrower scope and clearly defined focal question, the scenarios will be more targeted and therefore more likely to usefully inform decisions and operational planning.

You may find visual approaches helpful at this stage, such as mind maps, to collaboratively define your project boundaries.

The scope should clearly define the project focus and boundaries, such as:

• the main issue(s) or project(s) to be addressed
• sector(s) or organisation(s)
• geographical bounds

Once the scope is clear, a more discrete focal question can be defined. The focal question should be:

• specific
• short
• precise
• time bound
• reflective of the desired outcome of the project
• broad enough to allow for wide ranging exploration of the issues.

Decide how the scenarios will be used

For the public sector, applying climate scenarios can take many different forms. An important part of defining the scope of your scenarios is deciding how they will be used in practice. The scenarios should be designed with this end use in mind.

Read how to apply climate scenarios

Define a time horizon

When selecting a time horizon for your scenarios, factors to consider include: 

• Your organisation’s and national emissions reduction targets 

• The useful life of assets or infrastructure owned / managed by your organisation 
• Availability of data 

Challenge norms when you select time horizons, as climate-related risks, opportunities and impacts may keep evolving beyond the timescales of typical planning processes.

In most scenario archetypes, physical risks are relatively minor before 2050.

Therefore, using longer time-horizons (eg, 2070 or 2100) may be necessary to avoid missing some key risks.  

Using longer time horizons helps to capture potential climate impacts that most current global scenarios place farther into the future, but which might happen faster in reality (as has been consistently experienced over the past decade).

Using time horizons from existing scenarios 

Time horizons from existing scenarios, such as New Zealand sector scenarios, can be a useful starting point. You should consider, however, whether adjustments to these time horizons are needed to improve relevance to your organisation’s situation and your chosen focal question.

Explore the catalogue of climate scenarios

The output of this step is relevant, plausible, and scientifically and technically robust scenario archetypes and supporting data.

Scenario archetypes 

Once the focal question and scope has been set, the next step is to decide how many scenarios you need.  

We strongly recommend developing and applying at least three scenarios. Three scenarios will better enable you to test a range of plausible, uncertain futures.

Each of your scenarios should have an ‘archetype.’ Scenario archetypes have similar underlying assumptions, and trends that facilitate comparisons.  

Your scenario archetypes should include: 

• a 1.5°C warming scenario
• a 3°C warming scenario
• ideally, at least one other scenario.

There are multiple ways to go about defining your scenario archetypes. 

Scenario quadrants

The four quadrants developed by the Network for Greening the Financial System (NGFS) is one popular framework for selecting climate scenario archetypes.

These four quadrants are designed so that the scenarios test differing extremes of physical and transition risks. Depending on how many scenarios you decide to develop, you may base your scenarios on two, three, or all four of the quadrants.

NGFS scenario archetypes

Other considerations for scenario archetypes

The four quadrants developed by the NGFS are not the only framework that can be used to define scenario archetypes.  

Depending on your focal question, you could consider scenario archetypes that explore other axes, such as: 

• The level of climate action in Aotearoa New Zealand plotted against the rate of global climate action – are we leading or lagging compared to the rest of the world? 
•  Climate action at the national level plotted against the rate of action within a particular sector or industry. 
• Aotearoa New Zealand’s level of preparedness to deal with climate change impacts plotted against degree of global warming.  

Drawing on existing scenarios

Regardless of how you define your archetypes, to further develop them you will want to draw on elements of existing scenarios. Depending on what is most relevant to your focal question, you may decide to draw on elements of many existing scenarios, or just a few.  

Drawing on existing scenarios to develop your scenario architecture is as much of an art as it is a science. Existing scenarios were all designed by different entities for different purposes.  

It is essential to check that existing scenarios are broadly consistent when combining them to create your scenario archetypes. Organisations can also change assumptions in existing scenarios in a transparent way if they consider it necessary. 

You may decide to draw on elements from: 

• Global scenarios – such as the IPCC Shared Socioeconomic Pathways (SSPs) 
• National scenarios – such as the Climate Change Commission or SPANZ scenarios 
• Sector scenarios for Aotearoa New Zealand – such as scenarios developed by the agriculture, tourism or banking sector 

Explore the catalogue of climate scenarios

More about scenario archetypes

Read more about scenario archetypes and how to use existing scenarios in a consistent way on page 50 of Staff Guidance: Entity Scenario Development [External Reporting Board website].

The output of this step is materials needed for workshops, including presentations, templates, and agendas.

Preparing for workshops

Once the scenario archetypes have been defined, the next steps are to prepare for and facilitate workshops to refine them into draft scenario narratives.

The workshop preparatory phase involves assembling materials for the scenarios workshops (see step five).

Draft materials – including process design, and archetypes – can be tested in advance with the smaller, support group. If done well, these people will provide critical feedback that you can discuss and where required, take on board. This smaller support group will also become your ‘workshop champions’.

Example workshop materials could include:

• Workshop invites and agendas
• Pre-reading materials for workshop attendees
• Slide deck presentations
• Interactive materials — (eg, whiteboards, posters, pens & paper, online whiteboard)
• If resources allow, consider pre-recorded materials - (eg, interview with expert, short case study example).

The output of this step is to undertake workshops (online or face-to-face) to go through the process of identifying and ranking driving forces, assessing these against archetypes and developing draft scenario narratives.

Participatory workshops

Workshops can be held in person, online, or in hybrid format, and should be a minimum of two-three hours each or ideally half a day.

Workshop one: introduction to scenarios

The first workshop’s aim is to develop a shared baseline understanding of the ‘what’, ‘why’, and ‘how’ of scenarios. It’s a chance to introduce key terms and walk the group through the main points of the process, explaining the logic of each step.

Workshop two: driving forces

This workshop focuses on identifying the underlying forces that could shape the organisation’s future in relation to the focal question.

Objective one: identify driving forces

Driving forces are the forces of change outside the organisation that will shape the dynamics of possible futures in both predictable and unpredictable ways. Things to consider include key trends and factors and drivers of change. Thinking from the “outside in” – starting with broad societal and environmental factors – can help spur identification of external driving forces.

You may wish to use a common framework for identifying driving forces, such as the STEEP framework (social, technological, economic, environmental, and political).

STEEP Categories with New Zealand examples (adapted from XRB, 2023, pg. 47)

In addition to a common framework, such as STEEP, you should also consider cultural driving forces.

Cultural driving forces with New Zealand examples

Explore the catalogue of climate scenarios

Objective two: rank the driving forces against uncertainty and impact

Impact is the degree of potential impact of the driver to the organisation (materiality). Uncertainty is the degree of uncertainty pertaining to a driver and how it will manifest. You may wish to rank driving forces on axes of least uncertain to most uncertain and least impact to greatest impact.

To determine the most appropriate parameters for the scenarios it is necessary to identify the drivers that generate critical uncertainties in the future.

Example illustrating how to plot driving forces on axes of impact and uncertainty

Objective Three: review final selection of driving forces

The final selection of driving forces should be pared down to a limited set that is relevant and balanced. Because the driving forces will be used for building the scenarios, the more numerous the forces, the more complicated the scenario-building process. In most cases, scenarios are elaborated with four to eight forces.

Workshop three: exploring outcomes

This workshop aims to develop plausible outcomes within the scenario archetypes by identifying different future specifications for each of the critical driving forces.

This step starts with identifying the type of outcome that could take place in the future in relation to each selected driving force. From the possible outcomes for each driving force, states are developed.

A state is a hypothesis about what could happen to a driving force; it is a qualitative description of the driving force in the future at the selected time horizon. For each driving force, the states must be contrasted and mutually exclusive, meaning that two states cannot happen simultaneously within a given scenario. On completing this exercise, the result will be a collection of outcomes for each of the material and highly uncertain drivers, within each archetype. These draft scenarios form the basis for the final scenario narratives.

Workshop four: reviewing scenarios

This workshop generates basic parameters for scenario narratives that can be shared for review and comment with the scenarios team and workshop participants.

The basic scenario architecture consists of the underlying storylines, trends and assumptions for each archetype, and the outcomes from the previous workshop.

The output of this step is draft scenario narratives that can be shared for review and comment with the scenarios team and workshop participants.

In this phase, the scenarios should be formulated, and narratives produced to help visualise and synthesise a range of plausible yet divergent futures. The narratives should follow the concept of staged access: overview ought to come first, and details shall follow on demand.

Conceptual models

Before writing the scenario narratives, you may find it useful to draw a conceptual model of how driving forces and critical uncertainties interact under each scenario.

A simple conceptual model example

Drafting scenario narratives

Begin drafting the scenario narratives by putting together a single paragraph with the full description of the states of driving forces corresponding to each scenario. The scenarios assume the top ranked driving forces occur and have material impacts which unfold in different ways across the archetypes.

Use the same structure across the scenarios’ narratives to begin drafting a coherent story. Driving forces that have high impact but lower levels of uncertainty can provide a common baseline to all the narratives.

For each scenario, keep in mind the scenario baseline and progressively complete the story by adding compatible states of the other driving forces. Each overall scenario narrative will represent a set of interrelated future events and states that may occur under the explicitly stated baseline conditions.

A short summary (200 words) for each scenario can capture most of the relevant points. These summaries can be accompanied by longer, more detailed discussion about each category.

In order to assess the quality of the final scenarios, the following key criteria can be applied:

*Definitions taken from Staff Guidance Entity Scenario Development [External Reporting Board website]

The scenarios must provoke and challenge current mental maps in the minds of stakeholders or the public. But the scenarios should also not be fairy tales or science fiction stories either. Instead, they should describe plausible futures.

Several drafts may be needed to strike the balance between structured iteration, and an open and creative process.

The output of this step is competed scenario narratives ready to be applied to your situation or policy.

The completed scenarios

The completed scenarios should include:

• a short narrative description
• more detailed descriptions of future conditions for each of the related drivers

The completed scenarios will provide plausible future versions of Aotearoa New Zealand in relation to the focal question and over the specified time frame(s).

The scenarios should not claim to predict or project what the future may look like. Rather, they should be plausible futures that can serve as a ‘test’ for navigating through uncertainty, ambiguity, and novelty for policy and decision makers.

The scenarios are a forward-looking framework that provide a reference for use in debates about potential futures.

• Futures Thinking: Scenarios [Department of Prime Minister and Cabinet website] —provides an introduction to scenarios.
• Staff Guidance Entity Scenario Development [External Reporting Board website] — about developing useful and challenging scenarios. Aspects of the guidance may not apply to non mandatory reporting entities.
• Cradock-Henry et al. (2023). Guidance to Develop Climate Change Scenarios for Public Sector Planning and Policy: GNS Science Consultancy Report 2023. (To be published)
• Guide to just transitions (Chapter 2: Connecting)[Ministry of Business, Innovation and Employment website] — may be a useful starting point to help identify a diverse group of stakeholders to work with.
• CO (19) 5: Te Tiriti o Waitangi / Treaty of Waitangi Guidance[Department of the Prime Minister and Cabinet website]
• A Guide to Just Transitions for Communities in Aotearoa New Zealand (PDF, 35.8 MB) [Ministry of Business, Innovation and Employment website]