How can we help clients make good investment decisions despite long-term uncertainties?

Decision Making Under Deep Uncertainty (DMDU)

What is it and how can it help? 

DMDU methods help decision makers make robust choices when facing deep uncertainties about the future variables affecting their projects, like climate change or demography. Traditional decision analysis relies on point and probabilistic predictions. But under conditions of deep uncertainty, predictions are often wrong, and relying on them can prove costly and dangerous. Instead, a set of qualitative and quantitative tools can be applied to help decision makers identify and evaluate robust and adaptive strategies, which will perform well whatever the future brings.

When does it work best? 
  • Particularly useful for long-term investments, which will have little flexibility when implemented
  • Facilitates decisions when stakeholders disagree on the objectives of the project or on future conditions
  • Works best when there is a local ‘champion’, such as a senior decision-maker who initiates the assessment process and facilitates the dialogue with other stakeholders to ensure they are fully engaged and cooperative.
How do I use it? 
  • DMDU methods can help at the strategic level, to identify portfolios of investments that will resist or adapt to future changes like climate, demographics or technologies.
  • The approach can also be used at project level, to select the most robust designs
Where has it been used? 
  • DMDU methods have been applied in all regions and various SD sectors including water, urban, transport, and energy.
  • Each sector is now developing their own guidelines to help TTLs apply this new thinking to project preparation.
What are its limitations? 
  • Requires one or several models of the economic and technical performance of the project (or portfolio)
  • Is likely to require a specialist staff or consultant to assist in assessing the project performance under hundreds of future conditions
  • Requires substantial stakeholder participation and support