Learning with futures to realise progress towards sustainability: The WBCSD Vision 2050 Initiative

This paper addresses the limited evidence of how futures work bears fruit in the present by exploring a specific, yet significant, empirical case study. The results of our longitudinal study into the WBCSD Vision 2050 Initiative shed light on how organisations are harnessing the perspective of the long term future to identify what can and should be done in the near term to keep progress towards sustainability on track. We provide evidence of the expected and realised benefits of this collaborative futures initiative. These benefits extend beyond direct decision support, manifest at multiple levels and vary over time. We note that shift from single client to collaborative futures work is inherent to addressing sustainability challenges and call for more research into how collaborative futures practices are evolving to deal with new puzzles and wicked problems.     

From change to progress: critical spirituality and the futures of futures studies

This paper argues that for futures studies (FS) to have a future that is relevant to current shifts in meaning and consciousness, then it must incorporate into its methods and practices a sense of mystery founded on a critically spiritual sensibility. Critical spirituality redefines rationality and empiricism by including within their framework both the somatic and the meditative as valid and necessary components of any research activity. In the short term this means a shift away from the current Western obsession with change and a stepping back to allow for critical distance in order to understand that it is in the appreciation of progress — a fundamental shift in consciousness to include the spiritual dimensions of human experience — that discourse will emerge to take FS to the heart of civilisational renewal. In allowing for mystery, silence and the meditative empiricism required to access these categories, critical spirituality lessens the gap between thought and action and thus enables truly transformative academic practice to emerge.The idea of progress has been central to the unfolding of the modernist project over the previous century. Yet as the century drew to a close it became increasingly hard to keep faith with the idea in the face of growing disillusionment and the obvious failure of modernism to deliver what people most wanted: happiness born of personal fulfillment. A growing range of voices in the critical futures field have been questioning the assumption that change in material terms equates with progress.These voices fall into four main areas.

• Post modernist and post structuralist thinkers;

• Feminists empowering postmodern discourse with value laden analyses of power;

• Post colonial thinkers with a debt to neo-Marxist and critical theorists;

• Neo-humanist thinkers with an investment in all three of the above, who work from a critically spiritual perspective.

In this paper I am going to argue that a Neo-humanist vision of the futures of Futures Studies is one which will fully engage the human potential by activating a critically spiritual methodology. This is important as many of the tools of futures work are actually intended for use in anticipating and managing change (uncritically) but have little relevance when considering the nature of progress. Those methods and techniques which engage with the less analytic more visionary process of futures are much more relevant to progress because they actively involve the individuals in the act of ‘futures building’ as opposed to ‘futures scanning’.‘Progress’ here is used to mean fundamental change in the consciousness of both the individual and collective mind. It is essentially spiritual and has no clear temporal or spacial restrictions being timeless, or as Joanna Macy would have it, anchored in “deep time” [1]. Change, on the other hand, is very much associated with technical and material movement, having no connection with the inner fabric of the human psyche. There is no appreciation of spirit here, though great attention is paid to gross national product and the latest technical innovation to hit the market.Futures Studies has the potential to be responsive to future human dilemmas. But to be so it will need to make the effort to embrace tools and concepts that lie beyond the narrow pall of academic rationality as it is currently constituted. A greater space is already emerging within the field that not only tolerates but promotes imaginative and creative processes that break down the intellectual prudery of those who are attached to their own discipline and have little capacity to envision beyond narrow and self imposed confines. Thus we find music and song, poetry and story, art and theatre effective vehicles for work on deeper forms of consciousness. Visioning and imaging workshops such as those run by Joanna Macy, Elise Boulding, John Seed and Warren Ziegler (to name but a few) are growing in power and sophistication. Meditation and other reflective practices — the spiritual quest — seeking to plumb the depth of the human soul become relevant when seen within a broadened definition of rationality and research.Clearly futurists need to be able to assess and describe likely changes in the short, medium and long term but their central goal should be to facilitate areas of human endeavor which can benefit from a closer linkage between action, the consciousness that informs and directs the action and the spirit that underwrites the consciousness. Equally clear is the fact that not all futures trends are as relevant to this deeper layer of operation within Futures Studies.     

The reflective futures practitioner: Balancing salience,credibility and legitimacy in generating foresight knowledge with stakeholders

This paper explores how foresight researchers involved in environmental, nature and planning issues attempt to balance salience, credibility and legitimacy while generating knowledge in interaction with policy-makers and other social actors. Engaging stakeholders in foresight processes can increase the robustness of foresight knowledge, broaden the spectrum of issues addressed, and create ‘ownership’ of the process. While in foresight practices stakeholder participation becomes more and more popular to resort to as enabling factor for generating salient, legitimate and credible foresight knowledge, participation can also compromise these qualities. We analysed two foresight projects conducted at the PBL Netherlands Environmental Assessment Agency, one that developed future visions for Dutch nature policy and another that focused on future pathways for Dutch urban sustainable development policy. We illustrate that the dynamics of the research setting – changes in the socio-political context and the internal dynamics of the participatory efforts – complicated the balancing process. We conclude that one of the main challenges for futures practitioners is, therefore, to work within the dynamics of the research setting, and to position themselves strategically in this setting; by acting as ‘reflective futures practitioners’.     

Setting the futures margin with price limits: the case for single-stock futures

Price limits are artificial boundaries established by regulators to establish the maximum price movement permitted in a single day. We propose using a new censoring method that incorporates the effect of price limits on the futures price distribution and investigates how to set an appropriate daily margin level using single-stock futures in Taiwan. We compare our estimations with those obtained using the method in Longin (J Bus 69:383–408, 1999). The results show that (1) the margin levels derived from the Longin method, which ignore price limits in the estimation, are lower than those in our censoring method; and (2) the legal margin for single-stock futures set at 13.5 % by the Taiwan Futures Exchange to avoid default risk appears to be too high.     

A futures research outline of a post-modern idea of progress

Post-modernity in the social sciences may be recognised as an intellectual attitude of “anything goes” or “end of everything characterising the modernity”. At the extreme it seems that post-modern deconstruction, not aiming at anything, dissolves everything into meaningless residuals of merely individual peculiarity. The very idea of progress is one of the things not to be sustained by the intellectual forces of deconstruction. The author agrees on the necessity of de-constructing the prevailing modern idea of progress in the sense of revealing the pitfalls of modernity, but maintaining the idea of progress beyond modernity and recognising sustainable development as an intellectual and ethical challenge in this respect. To meet the challenge, futurology is needed to provide perceptional knowledge of reality whereby the whole field of scientific enquiry needs to be generalised. A methodological approach of futures research called dialectical deconstruction is outlined.     

Hedging with Chinese metal futures

This paper evaluates different hedging strategies for aluminum and copper futures contracts traded at Shanghai Futures Exchange. In addition to usual candidates such as the traditional regression hedge ratio and the hedging strategy constructed from bivariate fractionally integrated generalized autoregressive conditional heteroskedasticity (BFIGARCH) model, two advanced specifications are proposed to account for impacts of the basis on market volatility and co-movements between spot and futures returns. Empirical results suggest that the basis has asymmetric effects and optimal hedging strategy constructed from the asymmetric BFIGARCH model tends to produce the best in-sample and out-of-sample hedging performance.     

Mean-variance hedging with oil futures

We analyze mean-variance-optimal dynamic hedging strategies in oil futures for oil producers and consumers. In a model for the oil spot and futures market with Gaussian convenience yield curves and a stochastic market price of risk, we find analytical solutions for the optimal trading strategies. An implementation of our strategies in an out-of-sample test on market data shows that the hedging strategies improve long-term return-risk profiles of both the producer and the consumer.     

Design futures in action: Documenting experiential futures for participatory audiences

The futures field demonstrates a willing openness in embracing methodologies, approaches, and influences from a diversity of disciplines and perspectives. This plurality of practice is evidenced in a growing body of work that increasingly embodies futures thinking in the design of everyday material and networked experiences. The intersection of design and futures produces artifacts, applications and interactions created to provoke dialog in an accessible manner. As part of the Futures special issue on the Emerge: Artists and Scientists Redesign the Future event, this article describes the documentation and public representation of the creative outcomes from nine Emerge design futures workshops. These workshops provided a rich opportunity to study how designers and futurists collaboratively engage, implement and communicate alternative futures. The goal of the documentation effort described is to capture the experience of creating experiential futures and extend the capacity for developing social foresight through a participatory exhibit and online social platform.     

Robot futures: science fiction and futures studies methodologies in action

What would constitute a robot identity? Would a robot developing an identity be consciousness of the processes that could/would shape its identity? This essay explores these questions by considering images common to both, futures studies and science fiction—in particular, the now famous anti-capitalist demonstrations in Seattle in November 1999.     

Preparing for the professional futures field:: Observations from the UHCLC futures program

The futures field is an arena of increasing interest and activity. This article seeks to: (1) provide general information about key information sources for directed inquiry into futures studies; (2) sketch the origins and current status of the graduate program in Studies of the Future offered by the University of Houston at Clear Lake City—currently the largest and most comprehensive program of its kind; (3) Describe the methodology used in a recent strategic planning and program development project to update the UHCLC program; and (4) convey some guiding observations on teaching and research in futures studies, and on helping students find appropriate employment.     

Dynamic hedging with futures: a copula-based GARCH model with high-frequency data

Modeling the joint distribution of spot and futures returns is crucial for establishing optimal hedging strategies. This paper proposes a new class of dynamic copula-GARCH models that exploits information from high-frequency data for hedge ratio estimation. The copula theory facilitates constructing a flexible distribution; the inclusion of realized volatility measures constructed from high-frequency data enables copula forecasts to swiftly adapt to changing markets. By using data concerning equity index returns, the estimation results show that the inclusion of realized measures of volatility and correlation greatly enhances the explanatory power in the modeling. Moreover, the out-of-sample forecasting results show that the hedged portfolios constructed from the proposed model are superior to those constructed from the prevailing models in reducing the (estimated) conditional hedged portfolio variance. Finally, the economic gains from exploiting high-frequency data for estimating the hedge ratios are examined. It is found that hedgers obtain additional benefits by including high-frequency data in their hedging decisions; more risk-averse hedgers generate greater benefits.     

Feral futures: Zen and aesthetics

Studies of ‘futures’ have hitherto focused on those that are predictable and ‘tame’, and on those that are unpredictable and ‘wild’. Here we consider a new class, the ‘feral’; which are expectations that things might be made worse by risk-based actions. The type case is the nuclear accident at Three Mile Island, where operatives assumed that what was unfolding was of a sort described in their manual, and discovered too late that responses based on that assumption were making the situation worse. In this paper we review the idea of ‘feral’ and how it applies to futures, and discuss the different modes of engagement (or non-engagement) with feral futures. To make feral futures manageable, we suggest two ideas from other spheres of activity. Zen is a practice and philosophy which enables us to drop our preconceptions and thereby to respond to emerging, unprecedented situations. Aesthetics articulates a particular way to sense and appreciate realities intuitively, again enabling a direct response. The combination of Zen and aesthetics with scenario practice in the tradition of Pierre Wack provides a promising mode of response to emerging feral futures.     

Cross-commodity hedging for illiquid futures: Evidence from China's base metal futures market

This paper evaluates the effectiveness of cross-commodity hedging between China's base metal spot and futures markets, using daily data of metal spot and futures prices in the Shanghai Futures Exchange. The main findings suggest that, compared to unhedged spot portfolios, a naïve hedge increases risk exposure, while static and dynamic hedges can significantly reduce the risk of holding spot assets. Zinc futures and nickel futures outperform other base metal futures in individually hedging lead spot and tin spot respectively, while copper futures constitute a moderately optimal instrument to hedge both lead and tin spot assets.     

Forecasting Japanese health futures with the BFT : A demand-side approach

In response to the problems associated with supply-side health-care planning, the Institute of Health Systems Development has created a demand-side approach which has been named BFT (Bioforecasting Technology). The system involves integration of data regarding the population, the natural and social environment, and the health/medical/social services with projections on factors that will influence the future population's demand for different kinds of health services. BFT forecasts have proved highly accurate. The system has been used throughout Japan and internationally, and much wider applications beyond standard hospital and health planning are possible.     

Cross-hedging with futures and options: The effects of disappointment aversion

This article examines the effect of disappointment aversion on cross-hedging decisions. We show that, when both futures and options markets are unbiased, disappointment aversion has no effect on the optimal hedge positions. In case that either market is biased, disappointment aversion induces the hedger to behave more conservatively. In addition, as the hedger becomes more disappointment averse, his action is more reserved. It is also found that disappointment aversion tends to depress the importance of the put options whereas the effect of risk aversion is not uniform. Analytical predictions are supplemented by numerical exercises.     

Examining alternative futures: Theoretical considerations

In consequence of world population growth, technological dependence and natural resource depletion, mankind, especially in the developed world, which operates with a free-trade tradition, faces unprecedented challenges to civilised survival. Following the Harrison Brown precedent in assessing the dynamics of social systems' responses to survival pressures, the authors have selected themes of theoretical social science and juxtaposed them for insights into the nature of and paths to our collective future, here characterised in three alternative scenarios.     

Constrained dynamic futures portfolios with stochastic basis

Annals of Finance - We study the problem of dynamically trading multiple futures contracts on different underlying assets subject to portfolio constraints. The spreads between futures and spot...     

Futures and futures options with basis risk: theoretical and empirical perspectives

Under a no-arbitrage assumption, the futures price converges to the spot price at the maturity of the futures contract, where the basis equals zero. Assuming that the basis process follows a modified Brownian bridge process with a zero basis at maturity, we derive the closed-form solutions of futures and futures options with the basis risk under the stochastic interest rate. We make a comparison of the Black model under a stochastic interest rate and our model in an empirical test using the daily data of S&P 500 futures call options. The overall mean errors in terms of index points and percentage are ?4.771 and ?27.83%, respectively, for the Black model and 0.757 and 1.30%, respectively, for our model. This evidence supports the occurrence of basis risk in S&P 500 futures call options.