High resolution economic modelling for climate risk assessments: An application to coastal storm surges in Norway

We introduce a novel multisectoral and point-level economic model, demonstrated through a case study assessing the Norwegian economic exposure to coastal flooding.

An important prerequisite for accurately characterizing economic impacts from climate change is a spatial inventory of economic activity and value creation. Current options for creating spatial inventories of economic activity are limited. The main product that has been used for assessing economic exposure to hazards are gridded GDP models, which rely on proxies such as nighttime lights. However, they suffer from coarse spatial resolution and lack sectoral detail. They cannot capture building-level exposure and are constrained by biases, such as saturation in urban cores and unrealistic homogeneity in densely populated areas. While asset-level datasets offer high spatial precision, they are typically restricted to specific sectors (location of infrastructure, schools, residential buildings…), making them unsuitable for comprehensive, multi-sectoral analyses that are necessary for a full national-scale evaluation. These limitations highlight the need for a more integrated approach that combines fine spatial resolution with economic comprehensiveness and sectoral differentiation.

To bridge this gap, we present a novel, high-resolution mapping of national GDP that achieves fine spatial granularity while maintaining comprehensive sectoral differentiation. Our approach disaggregates national gross value added (GVA) to the point level using a public business register. We integrate this model with meter-scale flood hazard maps to quantify direct GDP and employment exposure to flooding. Additionally, we leverage an input-output analysis framework, specifically the hypothetical extraction method (HEM), to estimate indirect economic exposure, revealing how disruptions could propagate through intersectoral linkages.

To demonstrate the utility of this approach, we evaluate economic exposure to coastal flooding in Norway under a range of scenarios, from present-day extreme events to future projections under SSP3-7.0 for the year 2100. Results reveal the scale of both direct exposure at fine spatial scales and the broader systemic risks posed by intersectoral economic linkages. Our findings underscore the critical need for high-resolution, sectorally differentiated economic data to support the development of robust mitigation and adaptation strategies.