A recent national climate risk assessment has projected that more than 1.5 million Australians residing in coastal regions could face heightened risks from rising sea levels by 2050.
The assessment, which is the first of its kind for Australia, anticipates that climate-related hazards – including floods, cyclones, heatwaves, droughts, and bushfires – will become more frequent and severe over the coming decades.
The report, released in advance of the government’s 2035 emissions target announcement, evaluates three scenarios of global temperature increases: above 1.5°C, 2°C, and 3°C.
According to the findings, Australia has already surpassed the 1.5°C warming threshold, and further increases could lead to a significant rise in heat-related fatalities – particularly in major cities such as Sydney and Melbourne.
“Australians are already living with the consequences of climate change today, but it’s clear every degree of warming we prevent now will help future generations avoid the worst impacts in years to come,” said Minister for Climate Change Chris Bowen.
The assessment projects that property values could collectively decline by over $600 billion as a result of climate impacts – with additional strain expected on water quality, infrastructure, and public health.
The number of communities classified as high or very high risk is expected to rise, especially in northern regions, remote areas, and outer metropolitan suburbs.
Supporting data from Climate Valuation and The Climate Council indicate that approximately 652,000 properties – representing about 4.4% of Australia’s property base – are already exposed to high levels of risk from climate-driven events such as flooding, bushfires, and coastal erosion.
Another 1.55 million properties are considered moderately at risk, which is likely to keep insurance premiums elevated for affected owners.
Nicki Hutley, economist and Climate Councillor, stated that Australian households are now facing direct impacts from climate change, with more frequent extreme weather events putting homes at risk.
“We keep getting hit by disasters in Australia, and that’s driving insurance bills through the roof, but we cannot insure our way out of this crisis,” she said.
In response to the growing risk landscape, the Insurance Council of Australia (ICA) has renewed its call for a coordinated national approach to disaster resilience.
The ICA’s proposal for a Flood Defence Fund (FDF) outlines a decade-long plan to improve flood mitigation, reduce insurance costs, and lower disaster recovery expenditures.
The plan suggests shared funding between federal and state governments, with allocations for new flood infrastructure, property upgrades, managed relocation programs, and maintenance of existing defences.
Karl Mallon, director of Climate Valuation, emphasised the need for decisive policy action.
“It is imperative that decision makers at all levels look seriously at the stark statistics presented here and work to address questions head-on: What adaptation action are all levels of government going to take now to protect our vulnerable communities?” he said. “And how will this be financed?”
The data also reveal that risk zones are expanding beyond traditional boundaries, with more suburbs now classified as critical climate risk areas.
Greg Mullins, Climate Councillor and former NSW fire chief, remarked that the effects of fossil fuel emissions have broadened risk across the country.
“Even if your electorate is in a low risk zone, it does not mean fires or floods won’t happen in your local area because climate change has rewritten the rules,” he said.
The federal government has released a national adaptation plan to guide collaboration across all levels of government.
Australia’s existing pledge to reduce emissions by 43% by 2030 remains in place, but the report and industry stakeholders suggest that more robust measures will be needed to address the increasing risks to communities, infrastructure, and the insurance sector.
