Funding for Australia’s climate change adaptation must change

Billions of dollars could be saved by governments today if national leaders got serious about investing in extreme weather adaptation, according to the Climate Change Authority.

Back-to-back disasters affecting parts of Australia in the first half of 2025 alone have cost the national economy about $2.2 billion, disrupted lives, upended housing, and incurred major cleaning costs.

The CCA’s ‘Home safe: National leadership in adapting to a changing climate’ report has found that without action to deal with the inevitable, Australians will be paying $8.7 billion a year by 2050 to respond to increasing natural disasters. 

The report called on policymakers to take a three-pronged approach to this significant financial burden on government resources, including:

• Investing in the right infrastructure and services;
• Fit-for-purpose standards, laws and regulations that were responsive to the reality of a changing climate; and
• Empowering Australians with information and resources to assist them in deciding where they choose to build, buy or renovate a home.

CCA chair Matt Kean said climate change risks were escalating, also threatening millions of Australian homes in urban areas that were previously unaffected.

“Our homes are our sanctuaries — and the biggest financial investment most Australians will ever make,” Kean said.

“Authorities will need to review and tighten building codes. Parts of coastal Queensland and WA not now covered by cyclone construction standards may need to be, and soon.

“These are the kinds of practical steps we can take to make Australia more resilient in a changing climate. And they’re worth it — every dollar invested in reducing climate risks can save up to $11 in recovery costs.”

The CCA report noted costs ranging from insured, uninsured and underinsured losses, mental health impacts, loss of housing, and employment impacts.

Estimates by the Insurance Council of Australia about the costs of bushfires, cyclones, and floods to homeowners already sit at about $4 billion a year. 

This week’s NSW budget further supports the case, citing recent disasters like ex-tropical cyclone Alfred, devastating floods and bush fires as impacting the state’s bottom line.

Costs for disaster assistance and recovery worsened the NSW budget by $920.9 million in 2024-25 and $980 million in 2025-26.

Expenditure on natural disasters has increased by more than 1,000% in the six years since the 2019-20 bushfires compared to the six years prior. 

Based on research from the CSIRO, we know that every dollar invested in adaptation saves $2-$11 in recovery costs.

Kean said the opportunity for Australian government leadership to coordinate efforts across local government, businesses and communities began with an upcoming national adaptation plan.

“Government should back this up with funding, energetic implementation and embedding adaptation in business-as-usual planning across the board,” Kean said.

“The CCA recommends making the regular release and review of these plans a legislated government responsibility. 

“We stand ready to play a part in tracking progress to ensure action genuinely builds national resilience and makes Australians safer.”