Economic Impacts of Climate Variability in South Africa and Development of Resource Prediction Models

Abstract

An analysis of food and water supplies and economic growth in South Africa leads to the realization that climate variability plays a major role. Summer rainfall in the period of 1980-99 is closely associated (variance 48%) with year-to-year changes in the gross domestic product (GDP). Given the strong links between climate and resources, statistical models are formulated to predict maize yield, river flows, and GDP directly. The most influential predictor is cloud depth (outgoing longwave radiation) in the tropical Indian Ocean in the preceding spring (September-November). Reduced monsoon convection is related to enhanced rainfall over South Africa in the following summer and greater economic prosperity during the subsequent year. Methodologies are outlined and risk-reduction strategies are reviewed. It is estimated that over U.S.$1 billion could be saved annually through uptake of timely and reliable long-range forecasts.