IDEAS home Printed from https://ideas.repec.org/a/eee/ecolec/v236y2025ics0921800925001302.html

Nature scenario plausibility: A dynamic Bayesian network approach

Author

Listed:
  • Colesanti Senni, Chiara
  • Goel, Skand

Abstract

To cope with the lack of quantifiable knowledge about the occurrence of nature-related risks, scenario analysis has emerged as a way to investigate possible futures. We argue that expressing scenario narratives as causal models – leveraging causal Bayesian graphs – opens up new avenues for designing and using scenarios. As one use case of this approach, we show how dynamic Bayesian networks to assess the plausibility of high-dimensional quantitative scenarios. We provide an algorithm that probabilistically evaluates whether a quantitative scenario is consistent with a certain narrative about nature-economy linkages. This can allow the user to choose among several available scenarios using a data-driven approach. As a demonstration, we apply this approach to data from an integrated assessment model.

Suggested Citation

  • Colesanti Senni, Chiara & Goel, Skand, 2025. "Nature scenario plausibility: A dynamic Bayesian network approach," Ecological Economics, Elsevier, vol. 236(C).
  • Handle: RePEc:eee:ecolec:v:236:y:2025:i:c:s0921800925001302
    DOI: 10.1016/j.ecolecon.2025.108647
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0921800925001302
    Download Restriction: Full text for ScienceDirect subscribers only

    File URL: https://libkey.io/10.1016/j.ecolecon.2025.108647?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Rhys M. Bidder & Raffaella Giacomini & Andrew McKenna, 2016. "Stress Testing with Misspecified Models," Working Paper Series 2016-26, Federal Reserve Bank of San Francisco.
    2. Viral V. Acharya & Richard Berner & Robert Engle & Hyeyoon Jung & Johannes Stroebel & Xuran Zeng & Yihao Zhao, 2023. "Climate Stress Testing," Annual Review of Financial Economics, Annual Reviews, vol. 15(1), pages 291-326, November.
    3. Isaiah Andrews & Matthew Gentzkow & Jesse M. Shapiro, 2020. "Transparency in Structural Research," Journal of Business & Economic Statistics, Taylor & Francis Journals, vol. 38(4), pages 711-722, October.
    4. Daniel Felix Ahelegbey & Monica Billio & Roberto Casarin, 2016. "Bayesian Graphical Models for STructural Vector Autoregressive Processes," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 31(2), pages 357-386, March.
    5. Jiaming Mao & Zhesheng Zheng, 2020. "Structural Regularization," Papers 2004.12601, arXiv.org, revised Jun 2020.
    6. Macaulay, Alistair & Song, Wenting, 2022. "Narrative-Driven Fluctuations in Sentiment: Evidence Linking Traditional and Social Media," MPRA Paper 113620, University Library of Munich, Germany.
    7. Isaiah Andrews & Matthew Gentzkow & Jesse M. Shapiro, 2017. "Measuring the Sensitivity of Parameter Estimates to Estimation Moments," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 132(4), pages 1553-1592.
    8. Peter Andre & Ingar Haaland & Christopher Roth & Johannes Wohlfart, 2021. "Narratives about the Macroeconomy," CEBI working paper series 21-18, University of Copenhagen. Department of Economics. The Center for Economic Behavior and Inequality (CEBI).
    9. Garel, Alexandre & Romec, Arthur & Sautner, Zacharias & Wagner, Alexander F., 2023. "Do Investors Care About Biodiversity?," CEPR Discussion Papers 18020, Centre for Economic Policy Research.
    10. Colesanti Senni, Chiara & Goel, Skand & von Jagow, Adrian, 2024. "Economic and financial consequences of water risks: The case of hydropower," Ecological Economics, Elsevier, vol. 218(C).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Victor Duarte & Diogo Duarte & Dejanir H. Silva, 2024. "Machine Learning for Continuous-Time Finance," CESifo Working Paper Series 10909, CESifo.
    2. Anwesha Banerjee & Katharina Momsen, 2025. "(Un-)scientifically Spun: Narratives, Belief Updating, and Pro-Environmental Behavior," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 88(12), pages 3873-3903, December.
    3. Isaiah Andrews & Jesse M. Shapiro, 2021. "A Model of Scientific Communication," Econometrica, Econometric Society, vol. 89(5), pages 2117-2142, September.
    4. Jiaming Huang & Luca Neri, 2026. "Beyond Validity: SVAR Identification Through the Proxy Zoo," Papers 2601.11195, arXiv.org.
    5. Francesco Bilotta & Alberto Binetti & Giacomo Manferdini, 2025. "Blameocracy: Causal Rhetoric in Politics," Papers 2504.06550, arXiv.org, revised Nov 2025.
    6. Cormun, Vito & Ristolainen, Kim, 2024. "Exchange rate narratives," Bank of Finland Research Discussion Papers 11/2024, Bank of Finland.
    7. Alexa Kaminski & Alistair Macaulay & Wenting Song, 2026. "Monetary Policy Narratives and the Transmission of Monetary Policy," School of Economics Discussion Papers 0126, School of Economics, University of Surrey.
    8. Demgensky, Lisa & Fritsche, Ulrich, 2023. "Narratives on the causes of inflation in Germany: First results of a pilot study," WiSo-HH Working Paper Series 77, University of Hamburg, Faculty of Business, Economics and Social Sciences, WISO Research Laboratory.
    9. Greg Buchak, 2024. "Financing the Gig Economy," Journal of Finance, American Finance Association, vol. 79(1), pages 219-256, February.
    10. Isis Durrmeyer, 2022. "Winners and Losers: the Distributional Effects of the French Feebate on the Automobile Market," The Economic Journal, Royal Economic Society, vol. 132(644), pages 1414-1448.
    11. Gruber, Lutz F. & West, Mike, 2017. "Bayesian online variable selection and scalable multivariate volatility forecasting in simultaneous graphical dynamic linear models," Econometrics and Statistics, Elsevier, vol. 3(C), pages 3-22.
    12. Narayan, Shivani & Kumar, Dilip, 2024. "Unveiling interconnectedness and risk spillover among cryptocurrencies and other asset classes," Global Finance Journal, Elsevier, vol. 62(C).
    13. Dasol Kim & Luke M. Olson & Toan Phan, 2024. "Bank Competition and Strategic Adaptation to Climate Change," Working Papers 24-03, Office of Financial Research, US Department of the Treasury.
    14. Neele Balke & Thibaut Lamadon, 2020. "Productivity Shocks, Long-Term Contracts and Earnings Dynamics," NBER Working Papers 28060, National Bureau of Economic Research, Inc.
    15. Goodell, John W. & Gurdgiev, Constantin & Karim, Sitara & Palma, Alessia, 2024. "Carbon emissions and liquidity management," International Review of Financial Analysis, Elsevier, vol. 95(PA).
    16. Weinig, Max & Fritsche, Ulrich, 2025. "Going viral: Inflation narratives and the macroeconomy," WiSo-HH Working Paper Series 86, University of Hamburg, Faculty of Business, Economics and Social Sciences, WISO Research Laboratory, revised 2025.
    17. Vittorio Bassi & Raffaela Muoio & Tommaso Porzio & Ritwika Sen & Esau Tugume, 2022. "Achieving Scale Collectively," Econometrica, Econometric Society, vol. 90(6), pages 2937-2978, November.
    18. Greg Lewis & Bora Ozaltun & Georgios Zervas, 2021. "Maximum Likelihood Estimation of Differentiated Products Demand Systems," Papers 2111.12397, arXiv.org.
    19. Roth, Christopher & Schwardmann, Peter & Tripodi, Egon, 2024. "Misperceived effectiveness and the demand for psychotherapy," Journal of Public Economics, Elsevier, vol. 240(C).
    20. Nikolay Arefiev & Ramis Khabibullin, 2018. "Bayesian identification of structural vector autoregression models," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 49, pages 115-142.

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    JEL classification:

    • E17 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Forecasting and Simulation: Models and Applications
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ecolec:v:236:y:2025:i:c:s0921800925001302. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ecolecon .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.