# The Importance of "Wild Card" Scenarios

James A. Dewar

#### RAND

**The views expressed in this and other papers associated with the NIC
2020 project**

**are those of individual participants. They are posted for discussion
purposes**

**only and do not represent the views of the US Government.**

# The Importance of "Wild Card" Scenarios

James A. Dewar

RAND

As I have understood my assignment for this paper and its accompanying
talk, it is to construct one or more global scenarios and identify the
methodology used to do so, highlighting key drivers, forces, and trends.
The key driver I would like to concentrate on is surprise. Surprise is
an obvious "driver" of the future, but, by definition, is basically
unknowable and therefore of at best peripheral interest to most
forecasting efforts. However, I do not believe that all surprise in the
future is unknowable and will argue that certain kinds of surprises are
avoidable, especially when using scenarios to help think about the
future.

In these initial stages of a scenario approach to the National
Intelligence Council 2020 Project, then, I would like to do five things:

\- argue the importance of explicitly including "wild card" scenarios,

\- suggest an appropriate way to include them,

\- describe a systematic means for identifying "wild card" candidates,

\- describe a means of selecting a set of "wild card" scenarios, and

\- give an example of such a "wild card" scenario and suggest others.

I come at the issue of scenarios not from the perspective of a
forecaster who would like to be right about the future, but from that of
a risk-averse strategic planner who would like, to the extent possible,
not to be wrong about the future. My specific outlook in this brief
essay derives from Assumption-Based Planning, a strategic planning tool
developed at RAND, which I will describe in sufficient detail to
buttress my approach.[^1]

## The Importance of Explicitly Including "Wild Card" Scenarios

Let me start with an example from the National Intelligence Council's
Global Trends 2015. One of the virtuous aspects of Global Trends 2015 is
that it revisited Global Trends 2010 and sought to learn from
intervening events. In doing so, GT 2015 points out that GT 2010
(published in 1997) did not foresee the global financial crisis of
1997-98. While I will not argue that the failure to foresee the
financial crisis was critical to national security, I will argue that
assumption-based thinking could have avoided that surprise. Further,
since the global financial crisis *could* have been important to
national security, reducing such surprises is an important role that
"wild card" scenarios can play in the NIC 2020 Project.

I would describe the global financial crisis as a "wild card" scenario
in terms of Global Trends 2010 in the sense that it violates the general
assumption in GT 2010 that economic growth would continue

> "We project real growth in per capita income of over 2 percent per
> year between now and 2010. Fueled by accelerating global trade,
> knowledge-based technologies, and the integration of capital markets,
> economic growth will bring unprecedented wealth to a greater number of
> states."[^2]

To the extent that a failure to achieve continuous growth was critical
to national security, a "wild card" scenario detailing a serious
financial crisis would have been useful for considering appropriate
preparations for such a possibility. Such preparations could have
included developing indicators that a financial crisis was imminent or
underway and identifying national security actions that might either
forestall such a possibility or prepare for its occurrence.

The importance of "wild card" scenarios is not to correctly guess which
surprises will occur, but to identify, where possible, important
surprises that *could* occur. I argue that, by recognizing the
assumption in GT 2010 that there would be no financial crises, such a
"wild card" scenario could easily have been recognized and developed
(had it been critical) by those who developed GT 2010 and in advance of
the actual financial crisis.

## The Appropriate Role of "Wild Card" Scenarios

All good forecasters and strategic planners recognize that there are
innumerable plausible futures to consider. No finite set of future
scenarios can ever hope to completely cover all possible surprises. At
some point, the exercise of generating scenarios must posit assumptions
about what will (and won't) occur -- what trends are likely to continue,
what changes are likely to occur, what events are not likely to take
place, and so forth. From a small reasoned set of assumptions, a set of
scenarios can be developed to address remaining uncertainties and can be
used for their intended purposes.

In the strategic planning arena, Assumption-Based Planning is built on
the notion that a set of "wild card" scenarios should be developed for
purposes of making more robust the plans that have been developed
(whether by using scenarios or not). Those plans have made assumptions
about the future, not all of which are certain to come or remain true.
"Wild card" scenarios are plausible futures that violate one of the
assumptions that underlie the plan. The specific purpose of the "wild
card" scenarios is to help strategic planners develop signposts for
indicating that an assumption is being violated, shaping actions to keep
the assumption from failing (to the extent possible), and hedging
actions to prepare the organization in the event an assumption does
fail.

I am presuming that the National Intelligence Council 2020 Project will
not result in a strategic plan. However, to be useful, it will have to
make some assumptions about the world of 2020. Including a few "wild
card" scenarios can play a role similar to the "wild card" scenarios of
Assumption-Based Planning. Such scenarios can be used to: help identify
possible national security concerns of futures that are plausible but
considered less likely to occur; signposts that can be monitored to
determine if one such less plausible scenario is coming about, actions
that will discourage (or, perhaps, encourage) the occurrence of a given
scenario, and actions that can help prepare the United States in case
one of the "wild card" scenarios actually does occur.

If there had been a means of identifying "wild card" scenarios during
the preparation of Global Trends 2010, the possibility of a global
financial crisis could have been identified, considered, and, if
appropriate, addressed further. Global Trends 2015 actually identified
eight general "wild card" scenario candidates in its section on
"Significant Discontinuities,"[^3] but apparently did not consider their
implications further. GT 2015 also considered several other of what I
would call "wild card" scenario candidates, particularly in its
generally optimistic section on the global economy. Under "Alternative
Trajectories"[^4] five potential brakes to the rosy economic picture are
detailed to the point that each could be turned into a "wild card"
scenario.

As earlier, it is not difficult to develop "wild card" scenarios, but
this section suggests that only a limited number of such scenarios can
usefully be tolerated. I want to turn now to a systematic way of
generating "wild card" scenario candidates and a rough means of ranking
them so that the most salient survive the culling process.

## A Systematic Means for Identifying "Wild Card" Scenario Candidates

As described above, Assumption-Based Planning generates "wild card"
scenarios for strategic planning by creating them from failed
assumptions underlying the future(s) toward which a strategic plan is
directed. But how are the assumptions identified? In developing ABP we
have identified and created a variety of means for identifying
assumptions, but one in particular works very well on GT 2010 and GT
2015. The technique for identifying assumptions is to look for "wills"
in the documentation about the future. Most written descriptions of the
future use the word "will" liberally. As an example, the quote earlier
from GT 2010 has the sentence, "Fueled by accelerating global trade,
knowledge-based technologies, and the integration of capital markets,
economic growth **will** bring unprecedented wealth to a greater number
of states." This sentence assumes something about the future and uses
the word "will" to document it. In the 19 pages of Global Trends 2010,
the word "will" appears 244 times. In the 85 pages of Global Trends
2015, "will" appears used 845 times.[^5]

Not every use of the word "will" suggests an assumption. Further, the
same quote from GT 2010 above contains the sentence, "We project real
growth in per capita income of over 2 percent per year between now and
2010." This is a clear assumption and doesn't contain the word "will."
Nonetheless, the word "will" is a reliable and easy way to begin the
search for assumptions. In an electronic document (such as GT 2010 and
GT 2015) the "replace all" function in word processors can make every
instance of the word "will", say, bold and red, making it stand out for
easy identification.

A thorough search for assumptions would utilize other techniques (many
of which -- such as interviewing the developers of GT 2015 -- are well
known) that would also help pick up explicit and implicit assumptions.
But even a thorough search will not guarantee that all the important
assumptions being made about the future have been captured or that all
possible surprises have been identified. Nonetheless, this technique
arguably picks up and deals with at least some of the *avoidable*
surprises to which all forecasts are subject.

Then comes the question of which "wild card" candidates to pay attention
to.

**Selecting "Wild Card" Scenarios**

"Wild card" scenarios, are, by definition, less likely than other
plausible futures. What makes a "wild card" scenario important is when
the future it describes would produce disproportionately dire
consequences. There must be some sense, then, that the consequences of a
failed assumption would have a major impact on, in this case, national
security. The classical case of an unlikely scenario with dire
consequences is nuclear war. The combination of its extreme unlikelihood
and horrific consequences make its risk worth worrying about and
planning for.

Risk, the product of likelihood and consequences, is the obvious means
for selecting which "wild card" candidates are worth carrying forward as
scenarios. There's no escaping that both the likelihood and consequences
of any future scenario are judgment calls, so the determination of risk
becomes a judgment of judgments. Nonetheless, judging risk is a common
activity and reasonable people can generally agree on relative risks. To
make concrete the judgment of the risk of an assumption failing, it can
be thought of in terms of answering three ordered questions:

-   Could this assumption *possibly* fail in a way that has serious
    consequences for national security? Are those consequences different
    from consequences in scenarios already identified? \[How important
    is it?\]

-   If so (on both counts), is it *plausible* that the assumption could
    fail in that way? \[Is it likely enough?\]

-   How does the risk of this broken assumption compare with other "wild
    card" risks? \[How does the risk compare with other risks?\]

The first question gets at how important it would be if an assumption
failed. If there are no known circumstances in which the failure of the
assumption would have significant consequences, that assumption need be
considered no further. Also, if the consequences are similar to those of
a scenario already identified, even if the scenario is dissimilar, its
consequences should already be under consideration.

The second question gets at the plausibility of a failed assumption,
given its judged consequences. Spending a little time thinking about
plausibility can pay dividends. Even some things that are clear about
the future can turn out to be wrong -- it hasn't been that long since it
was "clear" that the USSR would be the primary geostrategic problem for
the United States well into this century.

The third question asks if the risk of a failed assumption competes with
others that have already been identified.

Given a completed list of "wild card" candidates, a final judgment must
be made about how many of the ranked risks are worth pursuing further.
In the end, those "wild card" candidates that aren't chosen for further
development can be carried in much the same way that the "Significant
Discontinuities" were carried in GT 2015.

What I'm suggesting, then, is that this is a method for creating "wild
card" scenarios after the major scenarios have been chosen for the
National Intelligence Council 2020 Project. As an example of how it
would work, I took a look at Global Trends 2015 and identified candidate
"wild card" scenarios based on the assumptions evident in the GT 2015
report. I will describe one and defend it as though it had been
developed for GT 2015. I will then list a few other assumptions from
which similar "wild card" candidates could be developed.

## "Wild Card" Scenario Example: First-World Epidemic

Global Trends 2015 says about health trends:

> "Biotechnology will drive medical breakthroughs that will enable the
> world's wealthiest people to improve their health and increase their
> longevity dramatically."[^6]
>
> "In developed countries, major inroads against a variety of maladies
> will be achieved by 2015 as a result of generous health spending and
> major medical advances. The revolution in biotechnology holds the
> promise of even more dramatic improvements in health status."[^7]

This suggests continuing general improvements in health in developed
countries. This assumption may not hold true from now through 2020 as
suggested in the Significant Discontinuities section when it refers to
the possibility of:

> "Another global epidemic on the scale of HIV/AIDS ... with grave
> damage and enormous costs for several developed countries."[^8]

***Could a first world epidemic affect U.S. national security?*** An
instructive example comes from the history of the Black Death bubonic
plague that ravaged Europe from 1347 to 1351 and killed as much as
one-third of Europe's people. Among its many effects, "so many people
died that there were serious labor shortages all over Europe. This led
workers to demand higher wages, but landlords refused those demands. By
the end of the 1300s peasant revolts broke out in England, France,
Belgium and Italy. The disease took its toll on the church as well.
People throughout Christendom had prayed devoutly for deliverance from
the plague. Why hadn\'t those prayers been answered? A new period of
political turmoil and philosophical questioning lay ahead."[^9]

This suggests that grave damage to the United States from an epidemic
could certainly create national security concerns and could involve
military personnel in activities such as disaster relief and policing
functions. These are both activities that differ from typical national
security concerns and negatively affect military readiness.

Further, if one of the developed countries that suffered grave damage
and enormous costs was South Korea and North Korea, because of its
general isolation, were spared significant damage, that could create
serious national security concerns for the United States. As a
suggestive hint from another historical example, Hippocrates described
an epidemic of an influenza-like disease that slaughtered an entire
Athenian army.

***Is such an epidemic plausible?*** Despite the miracles of modern
medicine, medical professionals worry about the possibility of epidemics
or global pandemics from diseases such as HIV/AIDS, SARS, Ebola, anthrax
and smallpox. Perhaps the pandemic they worry about most, however, is
influenza. Influenza pandemics have occurred for centuries and three
times (1918, 1957, and 1968) just in the 20^th^ century. The so-called
Spanish influenza that hit Europe and spread globally in 1918 is the
most telling.

Estimates of that pandemic say it struck between a fifth and half the
*world's* population and resulted in between 20 million and 100 million
deaths -- a significant percentage of whom were young, healthy people
living in "developed" countries (a 'W' shaped mortality curve instead of
the usual 'U' shaped curve that concentrates on the young and the old).
The flu killed 2.5% of its victims (compared with .1% for a "normal"
flu). The influenza virus has been around for centuries and its ability
to mutate into unexpected forms has kept us (with all of our "generous
health spending and major medical advances") not only from wiping it
out, but even from controlling it with much success. The influenza virus
has several of the characteristics of an "ideal" epidemic agent: it is a
virus (against which we have few medical weapons), it can mutate very
quickly (making it difficult to guard against or eliminate), it is
droplet-borne (helping it spread quickly), and its mortality is enough
to be deadly but not enough to kill its carriers before they can infect
others.

For those who don't find influenza a compelling epidemic, there are
other possibilities. An interesting one would be a common organism, such
as e. coli, that mutated into a deadly disease. E. coli O157:H7, for
example, is a particularly nasty version of the e. coli bacterium that
causes cramping and bloody diarrhea and, in severe cases, kidney
failure. An even nastier version of e. coli, though foodborne, could
cause problems because, as a common bacterium, it could be more
difficult to pinpoint as the epidemic agent.

Finally, suffice it to say, that there is no guarantee that the future
of bioengineering won't produce a particularly virulent epidemic agent.
But that brings us to the questions of likelihood and risk.

***What is the risk of a first world epidemic compared with other
risks?*** First, such an epidemic is plausible, but just how likely is
it? As the World Health Organization has said with respect to influenza,
"Experts agree that another influenza pandemic is inevitable and
possibly imminent."[^10] But how likely is another pandemic to be as
deadly as the 1918 epidemic? The recent outbreak of SARS (Sudden Acute
Respiratory Syndrome) is a cautionary tale. SARS bears a resemblance to
the Spanish flu of 1918 in that it is a very infectious virus (for which
we have no treatment) and has a mortality rate in the 4 -- 15% range
(much higher than that of the Spanish flu). It might also resemble the
Spanish flu in a more deadly way. There were two waves of the Spanish
flu in 1918. The first wave was reasonably benign and the second wave
was the deadly pandemic. Health officials are worried that SARS could
come back again this winter with a vengeance.

Apart from the specific case of SARS, there are modern factors that
encourage epidemics and counterbalance some of the medical advances
against such diseases. Global travel and open borders make the modern
world much more efficient at spreading infectious diseases, particularly
to developed countries as we saw in the SARS case. In addition, our
"clean" modern medical facilities are actually breeding "super" bugs
that have survived and are now immune to our bug killers. These and
other countervailing factors balance out, much more than we would like,
the progress that has been made against infectious diseases.

And none of what I've said so far discusses attempts at
intentionally-generated first world epidemics. As we've seen with
concerns about anthrax and smallpox, there are epidemic agents that
terrorists or others could engineer specifically for the purpose of
causing a first world epidemic. We are in a period of heightened
awareness of that possibility -- which probably overstates the
likelihood -- but whatever that likelihood is, it adds to the likelihood
of an unintentional such epidemic, making the overall likelihood that
much higher.

***So what?*** Given that the first world epidemic scenario is one of
the "wild card" scenarios that makes the final cut, what should be done
with it? The anthrax scare of 2001 has sensitized the national security
community to the possibility of an intentionally-generated epidemic. One
result has been a lot of thinking and planning for that possibility.
Ideally, that is what one could hope for in response to a "wild card"
scenario.

If the primary scenarios of the National Intelligence Council 2020
Project are to be used for strategic national security planning, the
"wild card" scenarios should be used for study and monitoring. A
spontaneously-generated first-world epidemic scenario is different from
an intentionally-generated first-world epidemic. This suggests some
questions that it would be good to answer. From a national security
perspective, are they similar enough that thinking and planning for an
intentionally-generated first-world epidemic will adequately prepare us
for a spontaneously-generated one? If not, what are the differences and
do they suggest near-term national security actions?

**Other Vulnerable Assumptions**

Instead of generating further "wild card" scenarios, I'll close by
listing a few other assumptions from GT 2015 that I think pass the tests
of sufficient plausibility and sufficiently significant consequences
that they should be considered as "wild card" scenario candidates. I'll
state the assumptions and then just briefly sketch a scenario direction.

"Despite a 50 percent increase in global energy demand, energy resources
will be sufficient to meet demand.[^11] ... Meeting the increase in
demand for energy will pose neither a major supply challenge nor lead to
substantial price increases in real terms.[^12]"

\- Suffice it to say that one of the Alternative Trajectories to a rosy
global economy in GT 2015 is "Global energy supplies are disrupted in a
major way. Although the world economy is less vulnerable to energy price
swings than in the 1970s, a major disruption in global energy supplies
still would have a devastating effect. Conflict among key
energy-producing states, sustained internal instability in two or more
major energy-producing states, or major terrorist actions could lead to
such a disruption."[^13]

"The pervasive incorporation of information technologies will continue
to produce significant efficiency gains in the US economy."[^14]

\- There is much we don't know about the effects of information
technologies (including their effects on the current economy) and much
we are counting on from them. A prudent "wild card" scenario would be
one in which the promise of information technologies leads instead to a
financial disaster.

"The state will remain the single most important organizing unit of
political, economic, and security affairs through 2015. [^15]...Europe
will not achieve fully the dreams of parity with the United States as a
shaper of the global economic system.[^16]"

\- Given the increase in regional problems and the globalization of the
economy, it is plausible that a regional entity such as the European
Union could begin emerging as a more important organizing unit of
political, economic and security affairs by 2020. It would be
interesting to start thinking through some of the implications if that
were to happen.

"\[India will\] continue its nuclear standoff with Pakistan.[^17]"

##  - Much thought has been given to the next use of a nuclear weapon in anger. That thinking should not be lost in thinking out to 2020. 

[^1]: For details, see Dewar, James A., Assumption-Based Planning: A
    Tool For Reducing Avoidable Surprises, Cambridge University Press,
    2002, or Dewar, James A., Carl H. Builder, William M. Hix, and
    Morlie H. Levin, *Assumption-Based Planning: A Planning Tool for
    Very Uncertain Times*, Santa Monica, Calif.: RAND, MR-114-A, 1993.

[^2]: *Global Trends 2010*, National Intelligence Council, November 1997
    or see <http://www.cia.gov/nic/pubs/index.htm>.

[^3]: *Global Trends 2015: A Dialogue About the Future With
    Nongovernment Experts*, National Intelligence Council, NIC2000-02,
    December 2000, p. 81 or see <http://www.cia.gov/nic/pubs/index.htm>.

[^4]: GT 2015, p. 39.

[^5]: Compared with 13 appearances of "may" and 38 appearances of
    "could".

[^6]: GT 2015, p. 9.

[^7]: GT 2015, p. 24.

[^8]: GT 2015, p. 81.

[^9]: Taken from
    <http://www.byu.edu/ipt/projects/middleages/LifeTimes/Plague.html>.

[^10]: World Health Assembly Executive Board Documentation, EB111/10, 26
    November 2002, p. 2 or see
    <http://www.who.int/gb/EB_WHA/PDF/EB111/eeb11110.pdf>.

[^11]: GT 2015, p.9.

[^12]: GT 2015, p. 28.

[^13]: GT 2015, p. 39.

[^14]: GT 2015, p. 34.

[^15]: GT 2015, p. 38.

[^16]: GT 2015, p. 75.

[^17]: GT 2015, p. 17.