Identifying, Assessing, and Governing Systemic Risks: Towards an Integrative Framework Applied to Urban Settings

This presentation outlines a framework of how to identify, assess, and govern systemic risks, applied to the context of urban and metropolitan settings. In contrast to routine risks, systemic risks appear on a systemic and structural level, produced, and affected by complex endogenous and exogenous interdependencies. Systemic risks are unintended by-products of current transformation processes, such as the deployment and innovation of new technologies, infrastructural changes, or socio-political dynamics, for example. Urban and metropolitan provide fertile ground for systemic risks, exhibiting a nexus of tightly coupled dynamic natural, societal, and technological systems.

However, so far systemic risks lack adequate assessment, evaluation, and governance approaches, which is a barrier toward developing effective policy measures. This gap in governance mechanisms is particularly glaring in the context of increased of pluvial and fluvial floods, wildfires, storms, and other extreme weather events across European cities. Failing to take the systemic interdependencies of urban settings into account may lead to higher socio-economic losses and potential systemic breakdowns, e.g., on the energy-supply, healthcare, or infrastructure level. The framework we propose entails the qualitative identification and assessment of systemic risks, ethical and societal implications, as well as the quantitative analysis thereof. We suggest a two-step approach towards the assessment and governance of systemic risks.

First, a clear identification of the systemic risk in question needs to take place. The analysis of systemic risks needs to pay attention to casual relations and feedback mechanisms between various system factors at the intra- and inter-system level, which result in transboundary cascading effects. Accordingly, delineating both the relevant systems and entangled risks requires an interdisciplinary approach, combining the quantification of risks alongside their qualitative assessment. This entails understanding, conceptualizing, and modeling vulnerabilities, scenario development, as well as the integration of stakeholders to identify potential leverage points and enable the facilitation of transformative processes. In the context of urban environments, this means delineating the various affected systems, and how they interact (e.g. healthcare, water supply, and electricity infrastructure). Second, identified systemic risk requires adequate governance. Governance of systemic risks must be concerned with the analysis of embedded systems, procedural considerations of inclusion and deliberation, as well as closure. The salient features of reflection, iteration, inclusion, transparency, and accountability have been identified as guiding principles for governance processes concerned with systemic risk. The procedural governance approach also explicitly relies on ethical considerations, tied to recognition and participatory justice. In the context of urban environments, this entails for example analyzing the relevant governance bodies (e.g. local vs. national), understanding their respective responsibilities and interdependencies, and assessing the decision-making process surrounding disaster risk management.

The presentation outlines a framework to address the challenges of complexities, uncertainties, and ambiguities associated with systemic risks. The framework draws on conceptual contributions as well as empirical evidence from transdisciplinary stakeholder and public engagement processes in urban and metropolitan contexts.