Local businesses feel connected, incentivised and rewarded to becoming climate ready.

Goal Feedback 3.4

Addressing market barriers hindering local businesses to adapt

More significant investment in climate change adaptation activities is crucial.

By 2030 indicative potential damages could be around $115 billion for Victoria due to climate change. This is a very conservative estimate as it doesn’t include costs of floods and bushfires, pollution, damage to environmental assets, and biodiversity losses that result from temperature increases.

Currently, many investment barriers are impacting our local businesses. The major challenge is the limited amount of investment mechanisms available for adaptation projects and activities. Funding offered through governments are not always equitable. Small business not used to grant processes and high reporting requirements find them inaccessible.

The lengthy timeframes and uncertainty surrounding climate impacts are also a barrier. It’s difficult for a business to determine the problem, let alone provide that evidence to an investor. This is true for government services too, where the investor is the taxpayer or ratepayer.

Objective Feedback 3.4.1

Addressing political, organisational and regulatory barriers to local businesses adapting

Currently, the support environment for business is very restricted.

Regulator mechanisms like the Building Code of Australia don’t take climate change into account. Many adaptation responses to flooding and public land use are explicit responsibilities of the government. Practically this is very challenging to address as many of our small rural council are resourced-constrained. Climate change events can be perceived as low risk from the public as they infrequently occur in some areas of the region. The consequence of this is low will politically to invest, particularly at the local level.

Most adaptation funding comes in the form of government grants. Grants are widely used as they are a useful tool to get money out, and projects started. The downside of grants is they create competitive environments and stifles collaboration.

There are also many disincentives from the insurance sector that are not familiar with new technological solutions. This uncertainty can drive higher insurance premiums.

Objective Feedback 3.4.2

Building greater opportunities for collaboration and support for larger more diverse climate impacts on businesses

It is understood that single interventions rarely lead to the systemic changes needed to act on climate change.

Climate adaptation often deals with interconnected, contextual and dynamic systems such as water and health. For impactful actions to be achieved, businesses need more longer lasting partnerships and collaborations.

Lasting relationships allow businesses to feel more interconnected to work on more complex multi-layered interventions. Seeing benefits that are being derived can result in more businesses becoming engaged in seeking solutions.

Objective Feedback 3.4.3