Quantifying Resilience: Applying the Physical Climate Risk Assessment Methodology (PCRAM) to Agritourism

This study outlines the initial steps toward applying the Physical Climate Risk Assessment Methodology (PCRAM) to quantitatively assess and enhance resilience within the agriculture and tourism sectors, which are highly susceptible to climate change and natural disasters such as hail and other perils. Although many risk assessments and models exist globally as detailed as part of this initial review of climate risk analytics for capital in these sectors at a basic level, there exists very little analysis which integrates the direct effects of climate, engineering and socioeconomic change into the operational and capital expenditure. This gap leads to the prevalent issue of undervaluing climate adaptation in investment decisions.

As part of this preliminary study, various risk assessment methods, software and frameworks, such as CLIMAAX and MYRIAD-EU, are reviewed which have been applied to the agritourism industry - given the large influence through a multitude of hazards - both climate driven and geophysical. For this preliminary framework and review the case of agritourism facilities in Northern Italy is identified as a critical pilot region due to its high-value viticulture and the increasing frequency of extreme hail events which threaten both agricultural yields and tourism infrastructure. This case study demonstrates how climate change directly impacts specialized assets such as wineries and farm-stays necessitating a detailed four-step approach.

The first step identifies key assets such as farm infrastructure, wineries, accommodation and crops, and hazards within the agritourism sector. The second step, a materiality assessment, would link climate hazards to potential impacts on these assets, quantifying the severity of effects like crop damage or revenue loss and classifying them as maintenance, performance, or life-cycle costs. The third step, resilience building, identifies and evaluates both structural (e.g. hail nets, retrofitting structures for wind and earthquake) and non-structural (e.g. modified operational plans) interventions, reassessing their impact on the assets. The final step, economic and financial analysis, would compare the financial performance of the three steps to demonstrate the value of investing in resilience. This shows how an initial investment might lead to more stable revenues and a better allocation of costs over the asset's lifespan. Ultimately, this methodology may be scaled to groups of assets and transferred to other susceptible economic sectors as the research evolves.