Australia needs a co-ordinated national plan and to spend tens of billions of dollars on climate adaptation and resilience in coming decades, the Actuaries Institute says.

The institute calls for a shift away from “short-term, reactive, post-disaster” spending on adaptation measures and says the nation is significantly underinvesting in resilient infrastructure. 

“We aren’t investing anywhere near what’s needed to match the scale of the climate risks facing Australia,” Taylor Fry principal Ramona Meyricke says in a report called Mobilising Investment for Climate Adaptation. “Australians are not yet aware of the scale of what needs to be funded ... A finance strategy would provide that clarity and help unlock investment at scale.” 

Ms Meyricke says the right policy settings, clear investment pathways and a consistent national approach are needed, and the long-term economic benefits of adaptation are often undervalued. 

The institute wants a National Adaptation Investment Framework, and options for growing and diversifying revenue streams to fund adaptation and support fair allocation of costs across society.  

The reports also calls on governments to overhaul cost-benefit rules so adaptation and resilience are properly valued for the long-term impact they can have.  

It says short appraisal periods may not fully recognise the benefits of adaptation projects, and chosen discount rates can significantly influence outcomes. These rates are applied as costs and benefits incurred in the future and are discounted back to current dollar terms. 

Properly recognising the economic benefit of investing in adaptation measures would help co-ordinate public and private investment. 

“Governments can better assess the costs and benefits of adaptation investments, getting rid of some distortions and blind spots that could prevent valuable resilience projects,” Investor Group on Climate Change director and report co-author Fergus Pitt says. 

See the report here.