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Forest Research Institut Baden-Württemberg (FVA)
Department of forest economics

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D-79100 Freiburg

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Article

Author(s): Susanne Kaulfuß
Editorial office: FVA, Germany
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Scenario planning – a glimpse into the future

Crisis Management Handbook
back to the Crisis Management Handbook

If and when the next storm will sweep over Central Europe or a forest fire will break out can never be exactly predicted. However, it is possible to prepare for extreme events so as to cope with a crisis better. One way is through scenario planning. But even in a crisis situation (e.g. after a windstorm) it is possible to use scenario techniques to quickly find the right strategy to deal with the damage. This article will present how forest managers can implement a simple variation of this method as part of a successful crisis management plan.

Only a few people are needed to utilize scenario techniques. Even a small group of forestry enterprise or office practitioners is sufficient for a useful result to be achieved after a short period of time. By involving people from different working areas, various aspects of dealing with a crisis can be considered. It is useful to integrate external experts as they help to broaden horizons.

As with many applied, strategic methods used in the civilian world today, scenario planning techniques arose in the military. At the beginning of the 1970s it was used by industry during the oil crisis. Today scenario planning is applied in many areas: in the forestry sector by way of climate scenarios.

Scenarios

A scenario describes a future situation which is the result of a combination of data, information, experience, opinion and estimates.

The Scenario Funnel (Fig. 1) shows the features and characteristics of the scenario building method. The present lies at the narrowest point of the funnel. The further one moves along the time scale into the future, the wider the funnel and hence greater the uncertainty over future developments.

Scenario funnel with three basic scenarios
Fig. 1: Scenario funnel with three basic scenarios. Source: Albers & Broux (1999), modified.

Three basic scenarios are created using the scenario funnel. The trend scenario describes a continuation of the current state into the future without considering any particular drivers. It doesn’t play any role in scenario planning as this scenario scarcely differs from the present. Much more important are the two extreme scenarios at the edges of the funnel. The best possible development is described as positive (best case scenario) and the worst by the negative extreme scenario (worst case scenario). Every imaginable state can be classified within these two extreme positions.

Scenario planning steps
Fig. 2: Scenario planning steps.

A number of steps are needed to derive strategies and actions from the scenarios. In order to make the process manageable for forest practitioners, the process is simplified into four steps which will be presented next. Each of the steps is illustrated using a forestry example to improve understanding of the method.

1. Problem analysis

At the start of each scenario a problem (crisis) is considered which can in principle be solved and for which there are a number of possible solutions. The goal is to describe the problem or crisis situation in detail in order to define the scope of the problem which then has to be resolved.

For a forestry enterprise numerous crises can be considered. Initially, the focus is on problems with a high probability of occurrence. It is therefore sensible to make a list of possible crises.

Evergreen Forestry Enterprise example:

The Evergreen Forestry Enterprise is idyllically situated in the middle of a large wooded area on the western edge of a mountain range and spans from the valley to the hilltops.

Coniferous trees, especially spruce, dominant a large part of the 40 year old stand.

The annual rainfall is good; winds mainly come from the west. The annual harvest can be processed using the firm’s own workforce and a few contractors.

To carry out a scenario workshop the forest owner, business manager and district supervisor meet in a relaxed atmosphere in a hut in the forest. During the first brainstorming session the participants name possible crisis situations for the Evergreen Forestry Enterprise: storms, forest fire and snow breakage. After weighting the aforementioned situations, a storm event was prioritised in first place.

In the course of the meeting the storm crisis was described in more detail: During a severe winter storm x-times the annual harvest was blown over. Spruce stands over 40 years old were particularly subject to wind throw. Clumps of wind thrown trees were also created by the hurricane. Along with processing the wind thrown timber, the damaged area must be reforested.

The forestry enterprise is faced with the problem of how to minimize and deal with the damage caused by the storm event.

2. Analysis of drivers

In the second step all drivers and influencing factors which directly impact on the problem are identified. These are ranked according to their importance. The participants determine the drivers and factors through a spontaneous and intuitive idea generation process (e.g. brainstorming).

There are some factors which can be influenced by actions and strategies and some which can not be controlled but which play an important role in describing the scenario. Factors which can be influenced have a greater relevance. All these factors must be reduced to a manageable number. The result of this step is an overview of the most important influencing factors.

Evergreen Forestry Enterprise example:

In a further brainstorming session various drivers and influencing factors were gathered and identified.

Results of the brainstorming session
Fig. 3: Results of the brainstorming session.

Scenarios are further developed and simplified by means of listing the variables for the most important influencing factors in a table. The presented table is called a morphological box or Zwicky box. The most important influencing factors are listed in the left-hand column. The individual variables are recorded in the remaining columns.

For the Evergreen Forestry Enterprise example, the drivers and influencing factors and their variables listed by the participants are shown in Table 1.

Tab. 1: Influencing factors and their variables.
Influencing factors and their variables

3. Development of scenarios

With the help of this table it is now possible to combine the separate factors into a scenario. There are an infinite number of permutations. Not all combinations are sensible and many are mutually exclusive.

It is not necessary to develop several scenarios. It is enough to have two extreme scenarios which are free of contradictions and which clearly differ from each other. It is important that the extreme scenarios are very dramatic but not implausible. By combining the variables one can describe the scenarios.

Tab. 2: Creation of scenarios.
Creation of scenarios

Evergreen Forestry Enterprise example:

Negative scenario

5 times the annual cut is thrown in a storm. In addition, one has to reckon with an increased bark beetle infestation because the weather conditions in spring and early summer are dry and warm.

Only half of the processing capacity is available. Transportation capacity is equally scarce. There is no wet storage area. The timber market is not strong. The timber price is poor. Finances are not available to process the timber.

Furthermore, the public criticizes the forestry enterprise’s processing strategy.

The forest enterprise must also expend a lot of effort on reforestation as there is insufficient natural regeneration in the wind thrown areas.

Positive scenario

The annual cut is thrown in the storm. As the weather conditions in spring and early summer are cool and moist the risk of bark beetle infestation is low and hence negligible additional amounts of damaged timber are predicted. There are more than the normal amount of workers and the transport capacity is more than sufficient to process the damaged timber. Additionally, the forestry enterprise has an available wet storage area. The timber price is good. The demand for timber is strong. The processing work and, if required, some reforestation can be financed from reserves.

The public supports the forestry enterprise’s processing strategy.

Reforestation is guaranteed to a large extent as there is adequate on-site natural regeneration of beech, pine and spruce.

4. Development of strategies and actions

Possible actions are derived and developed from the scenarios which have been created. The influencing factors are referred to again to find out which strategies or actions affect the scenario’s development. In doing so, one should concentrate on the influencing factors which one can influence oneself. The result of this step is a catalogue of actions in the form of a priority list.

Evergreen Forestry Enterprise example:

Negative scenario

Immediate actions in a crisis situation:

A scarcity of resources requires the processing strategy to be planned precisely. The processing takes place under forest protection auspices. The focus is on timber newly infested by beetles and clumps of wind thrown trees.

If there is sufficient work force capacity, the extensive areas of storm damaged will start to be processed. Valuable assortments are processed first. So long as a wet storage area has not been set up, only the quantity of timber which can be rapidly transported away will be harvested. If the timber can not be carted away, the stacks are treated with some means of protection. Live conserved timber is not processed. No other business operations take place.

As financial reserves e.g. for dealing with a crisis, have not been built up, a loan has to be taken out to cover the costs of processing and storage.

The forestry enterprise explains the situation and operational strategy to the public. Along with articles in the local press, tours are offered by the district ranger.

At the start of reforestation of the cleared areas (natural regeneration or planting), intensive hunting is undertaken in order to reduce browsing damage and achieve a stable mixed forest in the secondary stand.

Besides the actions which are applied in an acute crisis, the group also identified actions which could lessen or even prevent some aspects of the negative scenario:

- Promoting natural regeneration particularly of mixed forest species such as beech and pine, possibly advanced planting with these mixed tree species.

- Targeted hunting in key regeneration areas, browsing protection measures if necessary, claiming browsing damage in hunting leases.

- Building up reserves from the forestry enterprise’s profits.

- Maintaining relationships with forestry contractors and transport firms.

- Conceptualizing a wet storage area (check if it is possible to set one up, gain approval if required).

- Developing public relations concepts (prepare press release templates, develop concepts for forest tours).

Positive scenario

The forestry enterprise has sufficient workers on hand to first process timber from groups of wind thrown trees and then the extensive wind thrown areas. If transport bottlenecks should arise, then the timber (especially the valuable timber) will be temporarily stored in wet storage. The firm’s workforce can also dedicate themselves to other business operations.

Additional processing costs are financed from the enterprise’s reserves.

Public relations are carried out in the usual way. Tours with the district ranger are organised on demand.

There is intensive hunting on the cleared areas to protect the naturally occurring regeneration.

By means of this small scenario, every forest owner can work through various situations for his or her enterprise in advance and prepare a catalogue of actions to have up their sleeve. In a crisis this can be taken out and quickly adapted to the real situation. But one can also use this technique to uncover actions which have preventative effects and implement them pre-emptively.

Scenario techniques allow participants to work through problems. They become aware of risks and learn how to deal with them. Even when in all likelihood the worst case scenario will not arise, one is well prepared for it. Because somewhere between the best and the worst possible scenario, is reality.

Literature

  • Albers, O.; Broux, A. (1999): Zukunftswerkstatt und Szenariotechnik. Ein Methoden­buch für Schule und Hochschule. Beltz.
  • Reibnitz, U. von (1992): Szenario-Technik: Instrumente für die unternehmerische und per­sönliche Erfolgsplanung. Gabler.
  • Zwicky, Fritz (1966): Endecken, Erfinden, Forschen im morphologischen Weltbild. Buchclub Ex Libris.

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