The risks associated with climate change, such as floods or heat waves, weigh on Quebec, which must increase spending to deal with them. To ensure predictability, the government must take these risks into account in the management of its public finances, warns the Institut du Québec (IdQ) in a new report presented Wednesday to the province’s Ministry of Finance.
“States are increasingly integrating the risks linked to both the fight and the adaptation to climate change”, emphasizes Mia Homsy, CEO of the IdQ and co-author of the report. “Quebec has not quite adopted an integrated approach yet, but it is time to act. This is important because, for example, credit agencies are beginning to look at how to analyze the degree of preparation of States to manage these risks and to integrate them into their budgets. »
A multitude of events, such as hospitalizations linked to heat waves or the displacement of populations due to coastal erosion, already weigh and will weigh on the expenditures of the provincial government due to climate change in the coming years, notes the report. . For example, cumulative financial assistance related to the 2017 and 2019 floods in Quebec totaled more than $500 million. For the summer of 2018, crop insurance payouts due to drought cost the government about $60 million. It is therefore necessary to plan the risks and integrate them into the state budget, recommends the Institute. Yes but how ? “There is no magic recipe”, recognizes Luc Belzile, principal economist at IdQ, who participated in the writing of the document and reviewed the practices adopted abroad.
“In our roadmap, there are two approaches that we suggest. First, determine — qualitatively — what the climate risks are in connection with the various departments and agencies. Then go a step further with quantitative analysis and modelling, assigning monetary values to the different risks, to understand the impact they will have in return on the State’s budgetary framework,” suggests- he.
Among the priority measures to be implemented, the Institute recommends taking into account the impact of climate risks in the assessment of infrastructure maintenance costs. “The Quebec Infrastructure Plan (PQI) represents more than $130 billion over 10 years. We are now deciding where these funds will be invested. It is very important that we make sure that we include adaptation to climate change in this,” says Ms.me Homesy.
If Quebec does not yet have a coherent approach to manage the costs of climate risks, the province would however be in a good position to do so, according to the CEO of IdQ. “We have plenty of useful measures, such as a carbon exchange, a Green Economy Plan (PEV), but we really have to take advantage of these assets and take action if we want Quebec to keep its pace. forward,” she insists.