The Integrated Risk Management Roadmap
A Decision Making Framework That Works
Choosing the right climate-related tool for a particular problem is not easy. Different tools are designed to be relevant to different stages of programs and their necessary decisions.
For example, many tools are designed to analyze the technical strengths and weaknesses of alternative proposals for action. Others may be designed to help with risk assessment or monitoring. To decide on the right tool for the right job, it is necessary to understand the decision-making process. That way, tools match their intended use.
At Carpe Diem West, we recommend the Iterative Risk Management Framework originally developed by the United Kingdom Climate Impacts Program and endorsed by the National Academy of Sciences. It is a robust approach to informing decision-making under climate uncertainty. This roadmap divides the decision-making process into 8 discrete stages, which are described below.
This framework was identified by the National Academy of Sciences as a robust approach to informing decision-making under climate uncertainty, and is based on the climate adaptation framework developed by the United Kingdom Climate Impacts Program.
Stage 1: Identify problems and objectives
In this stage, the main goal is to formulate the issue. A clear understanding of the problem is essential for productive completion of this 8-stage process. The success of your adaptation effort will be strongly influenced by how well Stages 1 and 2 are considered. In particular, it is important that there is a clear understanding of:
- The reasons for making the decision
- The broad objectives of this decision
- The wider context for the decision
This information will dictate your approach to risk analysis, stakeholders involved, options appraisal and decision making.
Stage 2: Establish decision-making criteria
This stage sets out to operationalize the broad objectives established in Stage 1 by identifying specific criteria for decision-making. These success criteria will be deployed to assess risk and appraise adaptation options during later stages of this process. It is also important to anticipate constraints to decision making, including those originating from:
- The legislative, institutional and regulatory environment
- Competing objectives of other stakeholders and decision-makers
- Resources available for the decision-making process
Stage 3: Assess risk
The primary goals of the risk assessment are fourfold:
- Characterize the nature of risk
- Provide qualitative or quantitative estimates of risk
- Assess consequences of uncertainty for decision options
- Compare sources of risk, not limited to climate
This is the first of three stages organized in a loop – Stages 3, 4 and 5. The user completes the stages as many times as necessary to move through different tiers of risk analysis: the first tier is a risk screening; the second tier is a mixed (qualitative and quantitative) generic risk assessment; the third tier is a specific quantitative risk assessment. Once the appropriate tier is identified, the user will loop through the next two stages (Stages 4 & 5). Then, if appropriate, advance to the next tier back at Stage 3 and start the loop again.
Stage 4: Identify options
There are multiple options to address any particular problem. At this stage, be sure to consider a wide range of options to ensure that no viable solution is overlooked. Options must take into account:
- Level of decision
- Climate and non-climate factors identified in Stage 3
- Decision-maker’s attitude to risk
- Degree of risk and uncertainty surrounding the decision
Adaptive management approaches are, by definition, iterative in nature. Decisions are revisited and evaluated in terms of past performance and in light of new information. Always identify options that do not constrain future adaptive capacities.
Stage 5: Appraise options
The purpose of this stage is to:
- Provide a robust basis upon which to make a recommendation of the ‘best’ option
- Refine and improve options
As in Stage 3, Stage 5 is executed in a tiered fashion. The first tier is a qualitative analysis of the options aimed at generating a ranked list. The second is a semi-quantitative analysis that assigns lower and upper bounds on the risks, costs and benefits of each option. And the third tier is a fully quantified analysis with a strong leaning toward economic valuation.
Stage 6: Make decision
In this stage, top-ranked options from Stage 5 are explicitly considered in the context of initial efforts to structure the problem. It is therefore necessary to revisit Stages 1 & 2 and answer these two questions:
- Was the problem well-defined?
- Do the criteria from stage 2 adequately operationalize the decision problem and decision-makers objectives?
In the case of negative responses, reformulate where necessary. At this point, decision makers must also know how sensitive any ranking of options is to data and model uncertainties.
Stage 7: Implement decision
You now have all the information you need to develop a detailed implementation plan. The specific actions you take to implement the decision will depend on factors internal and external to your organization.
Stage 8: Monitor, evaluate and review
Monitoring, evaluation and review are critical for the decision-making process and are the crux of the iterative feature of this framework. It is extremely important that targets and robust indicators of performance be established during the decision-making process, drawing on the objectives stated in Stage 1 of the process, and on the decision-making criteria of Stage 2.