- Potential impacts on the landscape can be estimated by comparing different future scenarios. For the Unlocking Forest Finance projects, these scenarios looked 30 years into the future.
- The two main scenarios are business as usual (BAU), without the interventions, and sustainable ecological management (SEM), where interventions are expected to take place.
- Both scenarios are based on a set of assumptions. It is difficult to make such projections accurately, so they should be complemented with other sources of information such as interviews with experts and farmers’ representatives.
1. Business as usual (BAU) scenarios
In order to estimate economic, environmental and social benefits of the proposed interventions, it is necessary to predict what would have happened without the project taking place. This scenario is known as Business as Usual, or BAU.
The BAU includes projections of deforestation, agricultural land use, productivity, the number of jobs created, the balance of carbon emissions and so on. These assumptions should be checked with different stakeholders to ensure they are robust.
Creating future scenarios with any accuracy can be a challenge. In some cases, historical data can provide a reasonable guide to the future; in other cases, the future may diverge from expected paths. Given these complexities and the varying levels of data and analytical tools that may be available, there is no single correct way to estimate the BAU scenario.
There are three general methods that can be used to estimate BAU:
Historical: The baseline is constructed using only historical data and patterns within the supply chain to extrapolate forward. This more simplistic approach may be acceptable where there are no significant changes foreseen in the supply chain.
Projected: Projections are made using economic forecasts, statistics and other inputs which try to account for the dynamics of the landscape. This may be suitable when future supply chains are expected to be very different from those observed in the past.
Adjusted History: In this hybrid approach, the BAU scenario is built according to historical trends, which are adjusted based on evidence that the historical rate is probably an incomplete vision of the future.
Creating a sustainable landscape initiative will mean selecting the most appropriate method. This may depend on many factors, including the information available.
2. Sustainable ecological management scenarios (SEM)
A second scenario, known as sustainable ecological management (SEM) scenario, aims to illustrate how the landscape could change with the planned interventions.
Researchers should know how interventions are expected to lead to change. For example, in the case of coffee farming, interventions may change fertiliser use, planting methods, water use, productivity levels and the extent of the farmed area. It will be necessary to quantify these changes, usually on a per-hectare basis.
3. Comparing the two scenarios
For each intervention, comparisons between the BAU and SEM scenarios can show:
The overall profitability of revenue generating interventions.
Potential costs and benefits. This may include financial returns (or only costs, as in the case of conservation and sustainable livelihoods), environmental benefits such avoided carbon emissions and social benefits, such as potential increases in employment.
Risks related to interventions and the potential for mitigating those risks. This is particularly important for interventions that might increase deforestation or environmental degradation.
Risks from unintended side effects. For example, there may be a risk that environmentally harmful practices will continue, or mitigating environmental damage will result in ‘leakage’, where negative impacts are just pushed elsewhere.
Specific analyses for these processes is detailed in the next section, Assessing impacts, risks and benefits.