March 09, 2014

Scenario Perspectives on California Drought

Peter Kennedy
Partner

Andrew C. Revkin’s recent piece in The New York Times on the emerging California drought debate made me think about why scenario planning must always take seriously alternative points of view on the issues of the day. 

While a number of respected climate experts argue that the California water crisis is rooted in human-induced climate change, Revkin says not so fast.  He surfaces other credible expert perspectives that take away very different conclusions from the data.  In one example, scientists see a strong resemblance between current conditions and two California droughts in the mid-1970s.  Both then and now, the culprit is a shortage of rain, not higher temperatures.  And at this point it’s not exactly clear what has caused the shift in rainfall patters.  Eventually, that could point to climate change, too, but as yet no one has evidence to make that connection.

But what is different now, obviously, is the profoundly greater demand for water as a result of population growth and agricultural expansion in the region.  The drought consequences are clearly much greater today – something that FSG has grown to appreciate from our scenario-planning work in the emergency management domain.

Scenario-planning rigor requires a practical agnosticism about “the truth” driving future operating conditions.  We always need to leave the door open to the possibility that today’s experts on any given subject are wrong, whether it be climate change, the economy or, on another emotional topic, the health effects of genetically modified food.  If an alternative case can be plausibly made and its implications are significant to our client, chances are we will represent it in one or more of the scenarios we create.  If you’ll excuse the bad pun, this is how we “cover the waterfront” and ensure that our clients thoughtfully consider a wide range of future business environments that present both unexpected challenges and hidden opportunities.

Thoughts?