This guidebook provides a step-by-step introduction to Targeted Scenario Analysis (TSA), an innovative analytical approach, developed by UNDP, that captures and presents the value of ecosystem services within decision making, to help make the business case for sustainable policy and investment choices. Through TSA, practitioners working with governments and private enterprises can generate and present data related to the management of ecosystems in a way that is more relevant to the choices facing a decision maker. This increases the likelihood that this data will be used to make policy and management decisions that result in effective and sustainable management of ecosystems and ecosystem services. The product of a TSA is a balanced presentation of evidence, for a decision maker, that weighs up the pros and cons of continuing with business as usual (BAU) or following a sustainable development path in which ecosystems are more effectively managed. This alternate path is termed sustainable ecosystem management (SEM).  

A TSA should be conducted for a particular productive sector, and with a specific decision maker in mind.  Decision makers will be primarily government officials or business managers, who generally come from a specific productive sector (e.g. Minister of Agriculture, Minister of Energy, hydropower plant manager, plantation owner or cattle farmer).  The results of a TSA can show the impact of certain policy options or management practices on specific ecosystem services or resources, to help decision makers understand the circumstances in which maintaining ecosystems and their services may generate greater economic benefit than promoting economic processes that degrade and deplete ecosystems.

TSA builds on and combines traditional cost benefit analysis and economic valuation methods, broadening the type of information captured. It differs from these traditional approaches in that it takes a sector-specific approach to valuation, to reflect the perspective and remit of policy makers and companies. Rather than determining the general value of a particular resource or ecosystem service, TSA looks at ecosystem services from a stakeholder point of view. So, for example, rather than coming up with a single number that estimates the overall value of a coral reef, TSA will find the value of preserving the health of that reef from a fisheries perspective or from a tourism perspective, i.e. from the perspective of those influencing the management of the coral reef. This makes the approach demand driven, rather than supply driven, asking: What information do decision makers need in order to judge the importance of a particular ecosystem service and the benefits of enacting a particular policy or management option that maintains it?

The main product generated using the data amassed during a TSA is a graph or graphs, with time on the horizontal axis and a measurable indicator, such as revenues or number of jobs, on the vertical axis. In the graph there are two curves, one capturing and depicting BAU and one the SEM scenario. The graph should be accompanied by a narrative that explains whom it is for (stakeholders), how it was generated (assumptions, data sources) and levels of confidence and uncertainty, among other things. This complementary text will both rationalize the graphs and also act as the bridge between the graphs and policy decisions.