Common use of Sensitivity Analysis Clause in Contracts

Sensitivity Analysis. As discussed, there is a degree of uncertainty associated with the models and data used to devise Australia’s FM reference level. Due to this, the Government’s estimates of emissions and removals from native forests are subject to a significant margin of error and, as the method used here is a replica of the Australian Government’s, it embodies all of the same uncertainties. To account for this, and the potential for future modifications of the method and data sets to alter the FM credit outcomes, sensitivity analysis was undertaken by changing two of the key parameters in FullCAM: the above-ground live biomass yield increment rates and the age-class distribution of the forests subject to harvest. The margin of error associated with the above-ground live biomass yield increment rates was assumed to be ±25%. To account for this range, replica representative plot files were created with +25% and -25% yield increments. The reference and ENGO scenarios were then re-run to test how the lower and higher yield increments affected the credit outcomes. In relation to the uncertainties associated with the age-class distribution of the forests, the estate simulation start date was adjusted ±10 years. In the standard runs, the estate simulation start date was 1 January 1960, meaning that in the sensitivity analysis the simulation start dates were 1 January 1950 and 1 January 1970.