Local governments must invest more to mitigate the effects of climate change but their revenues are growing much slower than natural disaster costs, the Australia Institute warns.

The think tank compared the Insurance Council of Australia’s historical catastrophe list – detailing insured losses – with Australian Bureau of Statistics data on local government revenues to show the disparity. 

It says disasters such as droughts have low insurance payouts, and not everyone has cover, but the ICA data gives a reasonable estimation of the rising cost of natural disasters over 20 years.  

It argues the fossil fuel industry should be required to cover catastrophe costs via a national climate disaster fund that collects a levy per tonne of carbon pollution caused by coal, oil and gas production.