The Victorian Government’s investment in climate adaptation needs to be larger and ongoing to enable the immediate and extensive adaptations to prepare for now unavoidable climate impacts.

Act on Climate is calling on the Victorian government to establish a permanent Victorian Community Climate Adaptation Fund (VCCAF) to reduce costs to the Government and Victorians by keeping people, Country and infrastructure safe from the risks presented by the climate impacts that are unavoidable and here now.

Act on Climate is also proposing a Climate Impact Statement in the State Budget in order to align public spending with its obligations to the Climate Change Act (2017) — the implementation of the state climate strategy and adaptation action plans.

Read a summary of our proposals below. Or view our full AoC 2025/26 BUDGET PROPOSALS document.

Proposal 1: Victorian Community Climate Adaptation Fund (VCCAF)

Victoria is at the forefront of emissions reduction, but it is falling behind on climate adaptation. It is one of the most vulnerable states in the world - it is in the top 5% of highest risk states globally. And there has been a 74% increase in damage to property in Victoria from 1990 to 2050.

Climate disasters are costing the Victorian government billions and escalating social problems. We need to spend money now to protect people later, as waiting to respond to these disasters greatly increases the long-term monetary and societal cost. Funding adaptation now will reduce recovery costs, as well as ease pressure on our health system and economy from climate impacts.

The Government needs to increase the amount invested in adaptation measures in the state, at least matching the Federal Government’s Disaster Ready Fund contribution, and make this a feature of the budget every year to ensure Victorian communities are as prepared as possible.

Its adaptation planning work needs to be backed up with ongoing funding and public communication. This will ensure communities are prepared and aware of the climate impacts forecast to affect Victoria.

Previous VIC Government climate adaptation schemes show high demand -  the government can build on these successful grant scheme models by establishing a permanent VCCAF.

• Over a third of Climate Resilience Inquiry submissions (39.58%) called for a Victorian Community Climate Adaptation Fund (VCCAF).

The funding of climate adaptation needs to be: 

• Adequate

• Ongoing

• For community-led solutions

1.  ADEQUATE FUNDING

This funding needs to be adequate according to the risk to life and quality of life facing Victorians, as well as the monetary risk facing Victoria

Adequately funding adaptation now will save on the future costs of responding. A $1 investment in climate adaptation or disaster risk reduction has been estimated to save between $2 and $11 in post-disaster recovery and reconstruction costs. And simply responding to disasters after the fact is likely to cost 11 times more.

Without increased adaptation funding, insurance costs will continue to grow. And preparing the community against expected climate impacts is crucial to safeguard critical systems and people, and ultimately leads to improved social, economic, and environmental outcomes.

• 83.75% of submissions to the Victorian Government’s Climate Resilience Inquiry noted that more climate adaptation funding is needed.

2.  ONGOING FUNDING

This funding needs to be ongoing to ensure the continuity of adaptation initiatives and the entrenchment of climate adaptation within communities to provide real climate resilience.

Funding is currently provided in the form of competitive, oversubscribed grants. Current once-off grants do not provide enough funding nor the consistency needed for climate adaptation.

• 49.58% of Climate Resilience Inquiry submissions mentioned that ongoing climate adaptation funding is needed.

3.  COMMUNITY-LED SOLUTIONS 

This funding needs to be community led to ensure these funds are going towards fulfilling their fundamental needs and keeping everyone in their community safe as we adapt to a changing climate.

Community-led adaptation is pivotal because it is grounded in community knowledge, expertise and priorities. It takes into account local knowledge and experiences of local climate impacts - solutions need to be localised to the specific context to ensure they are just and maladaptation is avoided.

• 61.67% of Climate Resilience Inquiry submissions mentioned that climate adaptation should be local place-based or community-led.
• 42.92% of Climate Resilience Inquiry submissions mentioned that climate adaptation should be Indigenous-led or follow Indigenous knowledge.
• 74.58% of Climate Resilience Inquiry submissions mentioned that climate adaptation should take into account those most at risk or more vulnerable.

We call on the Victorian government to establish a permanent Victorian Community Climate Adaptation Fund (VCCAF)

The fund, starting at 25 million per year and scaled up as needed, would distribute money annually to community groups that undertake localised adaptation and resilience projects. This approach would help the government meet its obligations to the Victorian Climate Change Act (2017) and ensure Victorian communities can enhance their capacity to adapt to impacts.

Investing in this fund will reduce costs to the Government and Victorians by keeping people, Country and infrastructure safe  from the risks presented by the climate impacts that are unavoidable and here now.

Requested Budget Allocation:

Examples of Initiatives that could be Funded:

Our Victorian Community Climate Adaptation Fund (VCCAF) proposal summary can be downloaded here: AoC VCCAF Proposal - 4-Page Summary

Proposal 2: Climate Impact Statement in the State Budget

The Government needs to modernise the budget process to align public spending with its obligations to the Climate Change Act (2017) — the implementation of the state climate strategy and adaptation action plans.

When it comes to the climate crisis, an ounce of prevention is worth a pound of cure. The Victorian Government needs an early intervention framework to ensure that it can account for the avoided costs that result from strong mitigation policies.

The Government has set out interim Emission Reduction Targets and Climate Adaptation Plans for Victoria. It now needs to modernise the budget process to align public spending with its obligations to the Climate Change Act (2017) — the implementation of the state climate strategy and adaptation action plans.

Each year, the Victorian Government allocates billions of public investment into infrastructure, government- supported programs, and services. While the government has a clear grasp of expenditure on education, health, and infrastructure, et cetera, there is currently limited understanding around climate-related expenditure and the ways in which climate impacts will affect the budget in coming decades.

The Victorian budget has evolved over the years to deal with changing context and issues. The Cain government modernised the Victorian budget in the 1980s. It brought greater transparency to the process by linking expenditure to a broader economic strategy and later including social justice thinking. Victoria became the first state to adopt accrual accounting under Premier Jeff Kennett.

In 2017, ratings agencies Standard & Poors and Moody’s stated that banks, cities, and states that fail to account for climate risk could face credit rating downgrades. It is advantageous for governments to adopt climate-risk accounting measures to get out in front of the move. Failure to do so could see the government making contradictory decisions, such as allocating public funding towards forestry which undermines the state’s greatest carbon sink, or major road projects that lock in existing dependency on private motor vehicles.

In 2024, communities are already battling escalating climate impacts such as bushfires, heatwaves, and floods. A growing body of research demonstrates that climate impacts are hindering workers’ abilities to do their jobs safely and optimally. The impacts are wide-ranging and affect workers across geographic and industry boundaries. 

‘Climate impacts’ are defined not only as environmental phenomena, but by their interaction with people. Friends of the Earth (FoE) and RMIT’s 2022 Climate Impacts at Work report defines climate impacts as ‘a collision between a given system (e.g. a household, organisation or infrastructure network) and particular weather and longer-term climate conditions’. This definition acknowledges that a person’s day-to-day life is a significant factor in how strongly they will be affected by climate impacts. For example, a worker whose home is damaged in a flood or bushfire and needs to take time off will experience heightened stress if they are employed in insecure work, meaning ‘insecure income, no leave and few workplace protections’.

Therefore, Victoria’s preparedness for climate disasters is affected by the social security of its people and the state of its workforce, regarding factors such as job security and wellbeing. FoE’s Climate Impacts at Work report highlights not only the seriousness of each individual impact, but the ways impacts have flow-on effects across industries and outside of people’s work lives. 

FoE recommends that the government publish a Climate Impact Statement when the budget is released, effectively modernising the budget to align with state climate policy. The statement would present:

• Baseline and categorised climate-related expenditure: There is a clear need for the government, key stakeholders, and public to understand how expenditure contributes towards direct mitigation, indirect mitigation, adaptation, and disaster response. This analysis can form a baseline and allow governments, departments, and stakeholders to track trends.
• Carbon accounting: Adopt carbon emissions valuation, such as the ‘social cost of carbon’ model used in the United States, to account for the greenhouse gas emissions liabilities of state government activities. This would be incorporated into cost-benefit analysis of government programs and investments.

Our Climate Impact Statement proposal summary can be downloaded here: AoC Climate Impact Statement Proposal - 2-pager