Economic risk assessment of climate change at the city level. The case of Cape Town, South Africa

Abstract

Estimating the economic risks of climate shocks and climate stressors on spatially heterogeneous cities over time remains highly challenging. The purpose of this paper is to present a practical methodology to assess the economic risks of climate change in middle-income cities to inform municipal climate response strategies. Building on a capital-based framework (CBF), spatially disaggregated baseline and future scenario scores for economic wealth and its exposure to climate change are developed for six different classes of capital across 77 major suburbs in Cape Town, South Africa. Capital-at-risk was calculated by combining relative exposure and capital scores across different scenarios, with population impacted for major suburbs and the city’s eight main planning districts. The economic risk assessment presented here provides a generic approach to assist city managers through an enhanced understanding of the relative levels of capital endowment across the city vis-à-vis relative levels of exposure to climate-related hazards over time.