UNDP developed Targeted Scenario Analysis (TSA) as a response to growing demand from decision makers and stakeholders for more policy-relevant sustainable development analysis to support national Sustainable Development Goals. Confronted with diverse policy, management and investment choices, decision makers often cannot determine how different options affect the multiple economic, environmental and social objectives that decision makers want to achieve.
TSA is an innovative approach that provides focused direction towards specific sustainable development policy and investment choices for public or private sector actors. It captures and presents the value and the contribution of ecosystem services to sectorial development within a decision-making framework, thereby helping make the business case for sustainable policy and investment choices.
As the name suggests, Targeted Scenario Analysis has three pillars:
Targeted: Within a participatory process, TSA helps decision makers and stakeholders target a critical decision to be made at a policy or management level, which involves a change on how ecosystem service(s) ara managed, and improvements in sustainable development outcomes. TSA targets management and/or investment policies, both public and private.
Scenario: It does this by developing and contrasting two future scenarios – Business as Usual vs. Sustainable Ecosystem Management – that link changes to biophysical and socio-economic indicators as the scenarios develop.
Analysis: It presents an analysis of selected sustainable development indicators into the future. Decision makers select the priority and relevance of these, e.g. changes in soil fertility or water availability, changes in natural resources-based productivity, costs, net revenues, jobs, and equity and gender indicators.
The product of a TSA is a balanced presentation of evidence, for a decision maker, that weighs up the pros and cons of continuing with business as usual (BAU) or following a sustainable development path in which ecosystems are more effectively managed. This alternate path is termed sustainable ecosystem management (SEM).
A TSA should be conducted for a particular productive sector, and with a specific decision maker in mind. Decision makers will be primarily government officials or business managers, who generally come from a specific productive sector (e.g. Minister of Agriculture, Minister of Energy, hydropower plant manager, plantation owner or cattle farmer). The results of a TSA can show the impact of certain policy options or management practices on specific ecosystem services or resources, to help decision makers understand the circumstances in which maintaining ecosystems and their services may generate greater economic benefit than promoting economic processes that degrade and deplete ecosystems.
TSA builds on and combines traditional cost benefit analysis and economic valuation methods, broadening the type of information captured. It differs from these traditional approaches in that it takes a sector-specific approach to valuation, to reflect the perspective and remit of policy makers and companies. Rather than determining the general value of a particular resource or ecosystem service, TSA looks at ecosystem services from a stakeholder point of view. So, for example, rather than coming up with a single number that estimates the overall value of a coral reef, TSA will find the value of preserving the health of that reef from a fisheries perspective or from a tourism perspective, i.e. from the perspective of those influencing the management of the coral reef. This makes the approach demand driven, rather than supply driven, asking: What information do decision makers need in order to judge the importance of a particular ecosystem service and the benefits of enacting a particular policy or management option that maintains it?
The main product generated using the data amassed during a TSA is a graph or graphs, with time on the horizontal axis and a measurable indicator, such as revenues or number of jobs, on the vertical axis. In the graph there are two curves, one capturing and depicting BAU and one the SEM scenario. The graph should be accompanied by a narrative that explains whom it is for (stakeholders), how it was generated (assumptions, data sources) and levels of confidence and uncertainty, among other things. This complementary text both rationalizes the graphs and also acts as the bridge between the graphs and policy decisions.
Step 1 – Purpose and Scope
Identify the key decision makers (the client) and their objectives for a TSA; Refine the policy focus and scope of the TSA objective; Define the scope of the analysis and assess and verify available data.
Step 2 – Define BAU and SEM
The importance of consensus and clarity; define the Business-as-Usual (BAU) baseline interventions; define the Sustainable Ecosystems Management (SEM) interventions; and refine the definitions of BAU and SEM.
Step 3 – Select Criteria and Indicators
Determine the criteria for the analysis, e.g. financial, economic, employment, equity and fairness. Select SMART indicators for each criterion, that are important for decision-making and identify issues to consider when choosing indicators.
Step 4 – Construct BAU and SEM
Establish a causal link between BAU or SEM interventions and changes in ecosystem services and relevant indicators; project changes to the selected indicators resulting from changes to ecosystem services; generate data to populate the BAU and SEM curves; Manage uncertainty in constructing the scenarios, and organize the results of the TSA for decision-making.
Step 5 – Make Policy Recommend Actions
Assist decision-makers in choosing among the policy interventions by reviewing the scenario projections, the magnitude of the outcomes, and the assessment of the criteria.