'Weather Value at Risk': A uniform approach to describe and compare sectoral income risks from climate change

We extend the concept of 'Weather Value at Risk' - initially introduced to measure the economic risks resulting from current weather fluctuations - to describe and compare sectoral income risks from climate change. This is illustrated using the examples of wheat cultivation and summer tourism in (parts of) Sardinia. Based on climate scenario data from four different regional climate models we study the change in the risk of weather-related income losses between some reference (1971-2000) and some future (2041-2070) period. Results from both examples suggest an increase in weather-related risks of income losses due to climate change, which is somewhat more pronounced for summer tourism. Nevertheless, income from wheat cultivation is at much higher risk of weather-related losses than income from summer tourism, both under reference and future climatic conditions. A weather-induced loss of at least 5% - compared to the income associated with average reference weather conditions - shows a 40% (80%) probability of occurrence in the case of wheat cultivation, but only a 0.4% (16%) probability of occurrence in the case of summer tourism, given reference (future) climatic conditions. Whereas in the agricultural example increases in the weather-related income risks mainly result from an overall decrease in average wheat yields, the heightened risk in the tourism example stems mostly from a change in the weather-induced variability of tourism incomes. With the extended 'Weather Value at Risk' concept being able to capture both, impacts from changes in the mean and the variability of the climate, it is a powerful tool for presenting and disseminating the results of climate change impact assessments. Due to its flexibility, the concept can be applied to any economic sector and therefore provides a valuable tool for cross-sectoral comparisons of climate change impacts, but also for the assessment of the costs and benefits of adaptation measures.