Science creating resilience

Making Good Decisions Under Uncertainty*

Marianne Fay

The World Bank

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Science can tell us a lot about resilience

1 But is it helping us make good decisions?

During a 2008 panel for the IPCC’s launch of a report on water

and climate, a hydrologist and an engineer called for

additional monitoring and research to understand the effects

of climate change.

The third member of the panel, a frustrated World Bank

infrastructure lender, declared in response:

“I can't wait thirty years for precise science to

tell me how much global warming contributed to a

particular drought or flood...

I need to make investment decisions now.”

2

Many Policy Decisions Have Long-Term Consequences

3

Good Decision Making Is Challenged By Uncertainty and Disagreement

Shanghai 1990 vs. 2010

Rapid

Changes

Competing

Priorities

Conservation vs.

Development

Uncertain

Future

Climate Change

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Take the case of climate models and their projections…

The Meteo-France model, from IPCC

Climate models can disagree with each other

The Meteo-France and the Australian model, from IPCC

… and we have a lot of models…

(Epistemic uncertainty)

… whose results depend on future climate policies and socio-economic

trends…

Traditional Planning

Asks “What Will The Future Bring?”

What will the future be?

What is the best near-term decision?

How sensitive is our decision to our

prediction?

“Traditional Planning”

• Conditions are stable or easy to predict

• There is consensus among stakeholders

Works well when:

But optimizing on a single future can

sometimes lead to catastrophic outcomes

“What if I’m wrong?”

Using Historical data with unpredictable

variables can lead to bad decisions

• In the early 1970s forecasters made projections of U.S energy use based on a century of data

Gross national product (trillions of 1958 dollars)

2.2

2.0

1.8

1.6

1.4

1.2

1.0

.8

.6

.4

.2

0 180

Energy use (1015 Btu per year)

0

Historical trend

continued 1970

1920 1929

1940 1950

1960

1910

1973

1973

1900 1890

20 40 60 80 100 120 140 160

1975 Scenarios

Using Historical data with unpredictable

variables can lead to bad decisions

Gross national product (trillions of 1958 dollars)

2.2

2.0

1.8

1.6

1.4

1.2

1.0

.8

.6

.4

.2

0 180

Energy use (1015 Btu per year)

0

Historical trend

continued 1970

1920 1929

1940 1950

1960

1910

1973

1973

1900 1890

20 40 60 80 100 120 140 160

2000 Actual

1990

1980 1977

1975 Scenarios 2000 Actual

1990

1980 1977

• In the early 1970s forecasters made projections of U.S energy use based on a century of data

…they were all wrong

What will the future be?

What is the best near-term decision?

How sensitive is our decision to our

predictions?

“Predict Then Act”

Robust Decision Making (RDM) Works Better Under Deeply

Uncertain Conditions by Running the Analysis Backwards

Develop strategy adaptations to

reduce vulnerabilities

Identify vulnerabilities of these strategies

What are the available

strategies?

Robust Decision Making (RDM)

Robust decision making or other approaches to

decision making under uncertainty can help

improve decision-making in various sectors

water management

energy resource

management

flood risk management

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Lima (Peru), California Ho Chi Minh City,

Louisiana Turkey, Nepal

Problem

Scoping

Model

Development

and

Simulations

Scenario

Discovery

Tradeoff

Analysis

Deliberation

Analysis

Table of

Simulation

Results

Threatening

Scenarios

Robustness

Analysis

Tradeoff

Analysis

Robust

Decisions

Outputs

Can be used to put the decision back in

the hands of the decision-makers

Science creating resilience

• Not just about facts and data

• But about how to use this new information in

planning and policy-making

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For More Information….

• Hallegatte et al. 2012. Investment Decision Making under Deep Uncertainty:

Application to Climate Change. Policy Research Working Paper WPS6193. The

World Bank, Washington, DC.

• Lempert et al. 2013 Ensuring Robust Flood Risk Management in Ho Chi Minh City,”

Policy Research Working Paper WPS6465. The World Bank, Washington, DC.

• Kalra, N. et al. 2014. “Agreeing on Robust Decisions: New Processes for Decision

Making Under Deep Uncertainty, Policy research Working Paper No. 6906. The

World Bank, Washington, DC.

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