A leading voice on climate adaptation in the environment movement, AoC has been facilitating discussion around climate risks and local preparedness needs, as well as practical community-led solutions, over the past three years. Through talking to communities members on the frontline of climate impacts, and through its deep engagement in the Victorian Government’s Inquiry into Climate Resilience, the catastrophic climate risks facing Victoria and immediate need for investing in community-led climate adaptation has only become clearer.

Both the Climate Resilience Inquiry Parliamentary Report and the National Climate Risk Assessment (NCRA), which were recently released, offer clear findings that show this. 

According to the NCRA, spending on disaster recovery could increase by 5 to 7.2 times, placing increasing fiscal pressure on governments. The assessment states that this indicates that increased investment, resilience and adaptation will be required. The Inquiry into Climate Resilience found that “funding shortfalls represent a critical barrier to implementing climate resilience initiatives” and that “non‑recurrent funding for resilience projects restricts long‑term capacity building and strategic outcomes”.

Act on Climate’s permanent Victorian Community Climate Adaptation Fund (VCCAF) is mentioned specifically in the Climate Resilience Inquiry Parliamentary Report as a key funding mechanism proposed by stakeholders. It notes: “As clearly articulated by stakeholders to the Inquiry, the establishment of a Climate Adaptation Fund can significantly strengthen Victoria’s climate resilience.” It adds that it “can address gaps in existing funding frameworks, reduce the economic and social costs of climate impacts, and build long‑term resilience across the state”.

Investing in climate preparedness through a VCCAF will ensure immense future savings for Victoria in the short as well as the long term, as well as increasing Victorian communities’ safety.

An improvement in cost of living and the wellbeing of Victorians will be another outcome from a VCCAF. Climate adaptation solutions are shown to reduce Victorian’s energy costs, increase their food security, increase their health and wellbeing, reducing health costs and isolation. 

Climate impacts and disasters are already costing the Victorian Government billions and escalating social problems. Funding climate preparedness now will save lives, reduce recovery costs, reduce the cost of living, and ease pressure on our health system and economy from climate impacts.

Implementing a VCCAF in the 2026/27 state budget. would lead to enhanced environmental, social and economic outcomes.

This fund proposal has been submitted for previous budgets. This version has additions clarifying and providing examples of how ongoing funding could work and showcasing its alignment with the recommendations from the state’s Resilience Inquiry. Please read our full proposal for a VCCAF, complete with examples of cost savings and how exactly this fund would work, here or our summary below. 

As noted in the Resilience Inquiry Parliamentary Report, the “increasing frequency and intensity of extreme weather events leads to compounding and cascading effects”, making investment in climate preparation in the next budget vital.

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 2026/27 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 Inquiry Parliamentary Report notes that “the establishment of a Climate Adaptation Fund can significantly strengthen Victoria’s climate resilience.” It adds that it “can address gaps in existing funding frameworks, reduce the economic and social costs of climate impacts, and build long‑term resilience across the state”.

The funding of climate adaptation needs to be: 

1. Adequate
   
2. Ongoing
   
3. 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 reduce future costs of responding. A $1 investment in climate adaptation or disaster risk reduction has been estimated to save from $2 to $11 in post-disaster recovery and reconstruction costs (CSIRO 2020, Climate and Disaster Resilience). And simply responding to disasters is likely to cost 11 times more. In addition, a $1 investment in adaptation and resilience has been shown to generate more than $10 in benefits over 10 years (WRI).

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.
• The Climate Resilience Inquiry Parliamentary Report found that “funding shortfalls represent a critical barrier to implementing climate resilience initiatives”.
• The Inquiry recommends “providing adequate funding to local government and community‑based organisations to raise public awareness and build climate resilience”.

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.

DEECA’s Community Development Fund and Rural & Regional Renewal’s Disaster Resilient: Future Ready program are good examples of how long-term funding can be executed.

• 49.58% of Climate Resilience Inquiry submissions mentioned that ongoing climate adaptation funding is needed.
• The Climate Resilience Inquiry Parliamentary Report states that “non‑recurrent funding for resilience projects restricts long‑term capacity building and strategic outcomes”.

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.
• The Inquiry found “community‑led initiatives are crucial for building climate resilience”.

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:

The ALGA 2025 Adapting Together report has examples of councils' climate- resilient investments, which are estimated to provide up to $4.7 billion in avoided costs and benefits to communities by 2030. Examples of some specific projects are in the table below, with more in our full budget submission.

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