New Representation of MMI

In EIFW, t h e r e a r e a few cryptic h i n t s t h a t t h e c o n s t r a i n t s were "often quite tight" (p. 402), or t h a t "these constraints, t a k e n together, a r e t h e singu- l a r c h a r a c t e r i s t i c s of t h e scenarios" (p.527). There a r e also s t a t e m e n t s t h a t t h e feedback loops were o p e r a t e d manually (see Section 1). However, t h e r e a d e r is n o t likely t o realize from s u c h s t a t e m e n t s t h a t t h e iterative model loop was almost completely ineffectual.

Recently, a new r e p r e s e n t a t i o n of t h e process t h a t was used t o develop t h e IIASA energy s c e n a r i o s h a s appeared, a s shown in Figure 16. This figure was f i r s t published in April 1983 (Sassin e t d , 1983). Note t h e m i n o r role played by t h e models MEDEE-2, MESSAGE, a n d IMPACT. Meanwhile, t h e a c t u a l iteration t h a t was done i s s e e n t o be a n informal process which was e x t e r n a l t o t h e s e t of energy models. In fact, t h e models themselves were used primarily in t h e capacity of a c c o u n t i n g aids. See Wynne (1983) for f u r t h e r discussion a n d analysis of t h e s e issues.

Start

6.

CONCLUSIONS

Together, t h e scenarios, t h e alternative cases, and t h e sensitivity analyses should build a broad enough understanding of t h e energy problem and a set of sufficiently specific facts so t h a t conclusions and recommendations for t h e energy transition can be formulated.

-Energy in a R n i t e World, Vol. 2, p.395 Two analytic findings a r e established in this paper regarding t h e TIASA glo- bal high and low energy scenarios. The analysis in Section 3 shows t h a t t h e important dynamic c o n t e n t s of the scenarios a r e effectively prescribed (before t h e computer is ever t u r n e d on) in t h e form of input assumptions t h a t a r e fed into the mathematical energy models. Meanwhile, t h e computerized models themselves perform a simple heuristic analysis t h a t reproduces vari- ous input assumptions with few alterations. Thus t h e models serve primarily as an accounting framework for displaying t h e hypotheses and assumptions of t h e analyst.

The second major finding is t h a t t h e IlASA scenarios a r e structurally brit- tle with respect t o minor changes in various assumed input data. I t is shown in Section 4 t h a t t h e energy supply mix in t h e scenarios is strongly dependent on arbitrary (and, in some cases, unlikely) assumptions about t h e future costs and availability of energy resources a n d supply technologies. Small changes in these assumptions ( s u c h a s increased costs t h a t have already been observed in reality) can yield extremely different scenarios from t h e models.

This i n h e r e n t lack of robustness prec1ud.e~ t h e possibility of drawing reliable conclusions or inferring major t r e n d s from t h e energy supply scenarios.

In addition t o these analytic findings, i t was observed t h a t most of t h e key quantitative assumptions a r e presented. with little or no substantiation or detailed clarification as t o how they were obtained. Furthermore, t h e r e a r e no documented t e s t s which explore t h e sensitivity of t h e final quantitative

results to variations in a number of crucial input assumptions.

Finally, quite apart from t h e quality or utility of the quantitative scenarios themselves, t h e r e a r e disturbing elements in t h e published representation of t h e work. Several instances of mis-documentation and/or omissions have been noted, some of which leave t h e reader with incorrect impressions about what was actually done. For further discussion and analysis, see Wynne (1983).

Before drawing t h e final conclusions in this paper, a r e m a r k is in order concerning modeling. The analysis performed by MMI t u r n e d out to be highly simplistic and largely reproducible with a hand calculator. This demonstrates t h a t a big, sophisticated computer model is not necessarily more a c c u r a t e or

"correct" than a small, uncomplicated model. Of course, large, complex models a r e necessary in many applications. However, when modeling a funda- mentally unknowable system (such as t h e world's energy future), t h e collec- tive e r r o r t h a t could result from combining hundreds of individual assump- tions, each of which is unverifiable, may be enormous. In any case, a great deal of human effort and money goes into developing large models such as MMI, and if t h e same t a s k can be done m u c h more simply, this is an important finding.

The overall conclusion in this paper is t h a t t h e 'IIASA energy scenarios a r e based on tentative predictions and arbitrary assumptions t h a t have not been carefully substantiated or tested. While it is perhaps reasonable t o assume (or hope) t h a t t h e future will be free of major political and economic surprises, this does not warrant t h e presumption of perfect information about t h e future.* Had t h e r e been extensive sensitivity analysis t o ensure t h a t t h e scenarios were indeed robust, then a t best they might constitute a conjecture.

*In additlos before applylw an analytical tool to project the future, It seems natural to determine lf It can reproduce hlstorkal data, parUcularly ln the case of energy developments after 1973. This was apparently not done ln KMI.

However, a few simple t e s t s reveal t h a t t h e scenarios a r e unstable with respect t o minor changes in various assumptions, a n d a t least some such changes a r e c e r t a i n t o occur in t h e coming half-century. Hence t h e r e is no scientific basis for claiming t h a t t h e scenarios or t h e conclusions drawn f r o m t h e m a r e robust. In view of t h e s e considerations, t h e scenarios m u s t be regarded as opinion, r a t h e r t h a n objective analysis of t h e factual basis of t h e world's energy f u t u r e from which robust conclu- sions m a y be formulated.

Nevertheless, a n u m b e r of "robust" conclusions or observations have been drawn f r o m t h e scenarios a n d widely publicized in t h e l i t e r a t u r e and in n u m e r o u s l e c t u r e s (e.g., Hafele 19BOa, 1983a,!>). There a r e c e r t a i n caveats in ElFW regarding some of these conclusions, b u t t h e s e a r e n o t emphasized in articles a n d speeches. Although scenarios a r e n o t p r e s e n t e d as decisive fore- c a s t s , t h e r e i s an inevitable tendency to view t h e m as such, even by t h e i r authors.* This is revealed in t h e assertion t h a t "OUT s c e n a r i o s aTe g l o b a l l y c o m p e h e n s i u e a n d a l l o w f o r n o e s c a p e . " (EIFW, p. 7 8 5 , original italics)

One of t h e robust conclusions drawn f r o m t h e scenarios is t h a t t h e world will c o n s u m e "unprecedented amounts" of dirty fossil fuels, s u c h a s t a r s a n d s a n d oil shale. In addition, "coal u s e shows a t r e m e n d o u s i n c r e a s e , by a s m u c h a s a f a c t o r of five" (Hafele, 1983a). It is acknowledged t h a t s u c h policies would entail severe consequences: "environmental problems raised t o t h e s e c o n d o r third power of what we normally envisage will be involved" (Hafele, 1983a).

However, a s discussed above, n o explicit environmental c o n s t r a i n t s a r e a c c o u n t e d for in t h e scenarios. Nevertheless, this conclusion is claimed t o be robust.

*For further d:scussion of this, see Schwarz and Iloag (1982) arid Landsberg (1982).

Another example is provided by t h e f u t u r e role of nuclear power: "by 2030 n u c l e a r power ( L T ~ ~ R S a n d FBRS) h a s a total of 8.09 TWyr/yr for t h e high scenario and 5.17 TWyr/yr for t h e low scenario. Its relative s h a r e is close t o 23% in e i t h e r case" (Hafele, 1983a). As observed above, this conclusion is based on t e n t a t i v e assumptions about relative costs of electricity generation t h a t a r e p r e s u m e d t o hold for t h e next 50 y e a r s . Kot only have t h e s e assump- tions already proven t o be i n c o r r e c t , but once again n o explicit account has been t a k e n of key f a c t o r s s u c h a s c o n s t r a i n t s on capital (to say nothing of t h e no!-: of ur~resolveci pnli!.ir.;~! arc! t , ~ c h n i c a l i s s u e . a.--sociared v,-i t h nil I i3ar.

power). Nevertheless, this contribution from nuclear power is claimed t o be a robust observation derived from t h e scenarios (Hafele, 1983a). It is i n t e r e s t - ing t o n o t e what would be required of t h e world in order t o fulfill this particu- l a r conclusion: we m u s t complete, on t h e average, t h e equivalent of a brand new 1000 MW n u c l e a r power generating plant e v e r y f o u r to siz days for t h e next 50 years.* This is c h a r a c t e r i z e d in t h e S c i e n c e article a s a "medium-size share" from n u c l e a r power (Hafele, 1980a).

The practice of drawing conclusions from a n analysis t h a t does not sup- port t h e m is especially disturbing when t h e conclusions a r e used t o influence policy decisions. A. r e l a t e d example is discussed in Wynne (1983), involving a scientific s t u d y of e l e c t r i c i t y cost e s t i m a t e s which claimed t o show a c l e a r economic advantage favoring t h e FBR over t h e LWR (Griimm et al., 1966). The study was used to justify a government expenditure of $96 million d e u t s c h e Marks for two prototype m R s , and l a t e r i t was found t h a t c e r t a i n input d a t a h a d been t u n e d s o a s t o c r e a t e a p a r t i c u l a r impression t h a t was favorable t o t h e conclusions of t h e study (for full details s e e Keck 1981). If t h e quality of

*This means that, a t present, a new 1000 MW facility would have t o be brought on line every month, and this rate of construction would be steadily increased to reach a peak of one new power plant every two or three days by 2020 (see Appendix E).

decision making is t o improve in t h e future, it is imperative t h a t policy mak- e r s be provided with genuine and t r a n s p a r e n t a s s e s s m e n t s of e a c h available option and its implications, r a t h e r than a s e t of strong r e c o m m e n d a t i o n s t h a t a r e based on shallow analysis a n d fond aspiration.

In closing, I wish to r e i t e r a t e t h a t many parts of t h e IIASA e n e r g y study have been i m p o r t a n t and valuable contributions t o a g r e a t e r understanding of t h e world's energy system. As for t h e scenarios themselves, p e r h a p s we should heed a warning made almost 20 years ago ( S c h u m a c h e r , 1964).

I t is fashionable today t o assume t h a t any figures about t h e f u t u r e a r e b e t t e r t h a n none. To produce figures about t h e unknown, t h e c u r r e n t method is t o make a g u e s s about something or o t h e r - called a n "assumption" - a n d t o derive a n e s t i m a t e from it by subtle calculation. The e s t i m a t e is t h e n p r e s e n t e d as t h e r e s u l t of scientific reasoning, something far superior t o m e r e guesswork. This i s a pernicious practice which c a n only lead t o t h e most colossal planning e r r o r s , because i t offers a bogus answer where, in fact, a n e n t r e p r e n e u r i a l judgement is required.

The study h e r e u n d e r review employs a vast a r r a y of a r b i t r a r y assumptions, which a r e t h e n , a s i t were, p u t i n t o a calculating m a c h i n e t o produce a "scientific" result. I t would have been c h e a p e r , a n d indeed m o r e honest, simply t o a s s u m e t h e r e s u l t .

APPENDICES

APPENDIX A: ESllMATED RESEARCH E m R T

The quoted figure of 225 person-years of effort c o m e s from adding up t h e periods of service of each m e m b e r of t h e Energy Systems Program, as listed on pp. v-x of EIFW. However, t h i s figure does n o t include t h e efforts of 26 per- sons who participated i n t e r m i t t e n t l y , n o r does i t include t h e contributions of those persons who participated for less t h a n one month. More importantly, t h e list includes participation only u p through t h e end of 1979. However, t h e work of producing and promoting t h e documentation (EIFW Volumes 1, 2;

several r e s e a r c h reports, and DOGR) continued t h r o u g h all of 1980, m u c h of 1981, a n d p a r t of 1982. Considering t h e s e factors, t h e actual figure i s signifi- cantly g r e a t e r t h a n 225.

I t

is very difficult t o assess t h e a m o u n t of money s p e n t on t h e IIASA Energy Program. The quoted figure of $6.5 million is a conservative e s t i m a t e of the r e s e a r c h budget alone; i t does n o t include various administrative expenditures a n d overheads. In addition, i t is n o t clear if t h e expenditures for t h e m a n y conferences were paid for from t h e r e s e a r c h budget or were drawn from o t h e r sources. Finally, t h e quoted figure does not include any expendi- t u r e s during 1973 (because I was n o t able t o obtain t h e dat,a) o r t h o s e a f t e r 1980. Considering all of these factors, t h e total expenditure f o r t h e IIASA Energy Program was undoubtedly m u c h higher t h a n t h e quoted r e s e a r c h budget figure of 86.5 million.

The research budget is estimated using t h e figures given in t h e IIASA research plans for t h e years 19'74-1980. These a r e converted t o c u r r e n t US dollars using t h e average exchange rates for each of t h e years 19'74 to 1980.

The exchange r a t e s a r e annual averages t h a t were kindly furnished by t h e IIASA Budget Department.

Total Research Budget Exchange Research Budget (in millions of AS) for rate in current US%

Year Energy Systems Program (AS/US$)

totals AS 100.603 million

Im Dokument A Critical Appraisal of the IIASA Energy Scenarios (Seite 57-67)