Managing climate risk for agriculture and water resources development in South Africa: Quantifying the costs, benefits and risks associated with planning and management alternatives

The Western Cape is an extremely important region to the economic development of South Africa. It is one of South Africa’s most valuable agricultural production regions and makes a substantial contribution to the country’s balance of payments. Almost all of the land that is farmed in this region is under irrigation. The population in Metropolitan Cape Town and a number of smaller cities in the region is growing rapidly. As this has happened, the demand for water in Metropolitan Cape Town has increased around 4 per cent per year over the last decade (Louw & Van Schalkwyk, 2001). Against this backdrop of rapid water demand growth and increasing competition between agricultural and urban water users, are the issues of local climate variability and climate change. The Western Cape is one of the few regions to demonstrate consistent projections of changes in climate under standard (SRES) Intergovernmental Panel on Climate Change (IPCC, 2007) forcing scenarios. These scenarios suggest a future reduction in available rainfall, which will exacerbate an already water-stressed region. An integrated modelling framework to investigate the costs and benefits of various adaptation strategies towards climate change was developed. The integrated framework includes downscaled climate change data, hydrological data, bulk infrastructure simulation and agricultural and urban water demand modules that maximises the economic value of the net returns to water from agricultural and urban water users on a monthly basis over a 20-year (or longer) time horizon. The modelling results demonstrate how the integrated framework can contribute towards improved decision making in the planning and management of climate risk for agriculture and urban water resources development. It is imperative to assess whether the developed and suggested adaptation strategies will minimize the potential adverse effects, and maximize the potential benefits under the projected climate change and current climate variability. This research project on the development of an integrated model to assess the impact of climate change and adaptation strategies is unique; it has never been done in Africa.