{"id":92,"date":"2021-04-12T01:31:46","date_gmt":"2021-04-12T05:31:46","guid":{"rendered":"https:\/\/pressbooks.bccampus.ca\/financialimpactclimatechange\/?post_type=chapter&p=92"},"modified":"2022-07-14T19:30:07","modified_gmt":"2022-07-14T23:30:07","slug":"public-budgets","status":"publish","type":"chapter","link":"https:\/\/pressbooks.bccampus.ca\/financialimpactclimatechange\/chapter\/public-budgets\/","title":{"raw":"Public Budgets","rendered":"Public Budgets"},"content":{"raw":"The public budgets used by various levels of government to fulfill their civic role are not only directly exposed to climate risk (e.g., through critical infrastructure), but also indirectly exposed via the economy as a whole.\r\n\r\nOn the revenue side, public budgets are dependent on various taxes which are, in turn, dependent on such things as personal incomes, corporate profits and property values\u2014any of which can be impacted by climate change. On the expense side, spending pressures on everything from healthcare to infrastructure repair will likely increase as the effects of climate change intensify.\r\n\r\nThese budgetary challenges can be exacerbated in the event that sovereign, provincial and\/or municipal bonds are repriced due to investors\u2019 perception of risk (i.e., increasing the costs of financial government activities). And it could also be compounded by increases in litigation against governments for negligence claims (e.g., inadequate infrastructure, issuing development permits in areas of known risk).\r\n\r\nPlease watch the following video for an overview of the interaction between climate change and public budgets.\r\n\r\nhttps:\/\/mediaspace.royalroads.ca\/id\/0_l3xewiry\r\n
Video attribution: \u201cClimate Change and the Public Budgets\u201d by\u00a0Todd Thexton,\u00a0Financial Impact of Climate Change,\u00a0Adaptation Learning Network<\/a>\u00a0is licensed under\u00a0CC BY 4.0<\/a>.<\/h6>\r\nFor more information on public budgets and fiscal risks, read pages 133 \u2013 138 in<\/span> chapter 4 (\u201cManaging the Fiscal Risks Associated with Natural Disasters\u201d) in <\/span>Fiscal Policies for Development and Climate Action<\/a>.\u00a0<\/span><\/i>Table 2 on p. 134 provides a summary of some of the main macroeconomic risks and contingent liabilities.\r\n<\/span>","rendered":"

The public budgets used by various levels of government to fulfill their civic role are not only directly exposed to climate risk (e.g., through critical infrastructure), but also indirectly exposed via the economy as a whole.<\/p>\n

On the revenue side, public budgets are dependent on various taxes which are, in turn, dependent on such things as personal incomes, corporate profits and property values\u2014any of which can be impacted by climate change. On the expense side, spending pressures on everything from healthcare to infrastructure repair will likely increase as the effects of climate change intensify.<\/p>\n

These budgetary challenges can be exacerbated in the event that sovereign, provincial and\/or municipal bonds are repriced due to investors\u2019 perception of risk (i.e., increasing the costs of financial government activities). And it could also be compounded by increases in litigation against governments for negligence claims (e.g., inadequate infrastructure, issuing development permits in areas of known risk).<\/p>\n

Please watch the following video for an overview of the interaction between climate change and public budgets.<\/p>\n