First Nations acknowledgement

The authors respect the enduring spiritual and physical connection of First Nations people as Custodians of Country. They recognise First Nations people as the first natural resource managers of Australia, having practised nature-based solutions for more than 60,000 years. The report commits to empowering First Nations leadership across policy, research, and programmes to address climate adaptation and disaster resilience.

Who we are

NRM Regions Australia acts as the national voice for a professional network of regional natural resource management organisations. For over 20 years, the sector has delivered strategic landscape management solutions across the continent through community-driven partnerships.

Authors and contributors

This discussion paper was authored by Sarah Hoyal and Dr Bek Christensen of NRM Regions Australia, Jen Barwick of Natural Solutions Consultancy, and Dr Rachel Morgain and Ainslie Macdonald from the University of Melbourne. The work was supported by the Minderoo Foundation and involved contributions from various government bodies, research institutes, and industry groups.

Overview

Australia is at a defining moment regarding its natural and built environments. The severity of climate hazards demands a transformation in capital direction and policy formulation. In 2021, the total annual economic loss from extreme events in Australia reached an estimated $38 billion. Projections from the National Climate Risk Assessment indicate that around one million homes will be in ‘very high risk’ climate hazard zones by 2050, potentially becoming uninsurable. In 2025 alone, disasters damaged 145,392 homes nationwide.

Investing in natural infrastructure, such as functioning floodplains and coastal vegetation, offers a proactive alternative to reactive post-event recovery. Nature provides approximately $892b to Australia’s GDP. Evidence shows that every $1 invested in natural capital yields around $9 in benefits, with the highest returns reaching $31.5 for every $1 invested in restoring degraded agricultural land and ecosystems.

Scope and purpose

The report seeks to identify barriers and opportunities for scaling natural infrastructure alongside traditional disaster risk reduction approaches. It provides an overview of necessary reforms at state and national levels to embed climate and nature risks across government portfolios, aiming to create an enabling environment for public and private investment.

Limited investment in natural infrastructure is exacerbating climate impacts

Between 2019 and 2024, over 80% of Australians were exposed to natural hazards, with the financial cost of insured extreme weather rising to approximately $22.5 billion. This represents a 67 per cent jump from the previous five-year period. Despite this, 87% of Commonwealth disaster expenditure between 2018-19 and 2022-23 was directed toward recovery rather than prevention. Low levels of investment in nature protection have led to significant degradation of natural infrastructure, worsening the impacts of intensified climate hazards.

The case for investment in natural infrastructure

Natural infrastructure, or nature-based solutions, can be up to 50% cheaper than traditional ‘grey’ infrastructure. A global review of more than 20,000 economic evaluations found that natural infrastructure was effective in mitigating hazards in 71% of cases. Specific examples include mangroves dissipating wave energy and urban forests cooling cities. For instance, London’s urban forest prevented an estimated 153 heat-related deaths between 2015 and 2022.

Four Australian case studies demonstrate successful implementation. In Tasmania, a $4m healthy waterways programme saved over $58m in damage costs during floods. In South East Queensland, riverbank restoration reduced downstream sediment loads by nearly 20,000 tonnes. Coastal dune strengthening in Perth protects 2.4 million Australians from hazards, while cultural burning in New South Wales reduces bushfire risk by managing fuel loads through traditional knowledge.

Navigating a path to scale natural infrastructure

The paper proposes a policy and investment strategy focused on five interconnected areas. Healthy country healthy people recommends increasing support for First Nations Rangers and Indigenous Protected Areas (IPAs), with an estimated additional resource requirement of less than $100m. Realising cost-effective benefits of natural infrastructure calls for incorporating natural values into government financial decision-making and publishing national measurement guidance (less than $2m).

Catalysing private sector action suggests expanding the Australian Sustainable Finance Taxonomy and specialist investment vehicle mandates to include climate adaptation and natural infrastructure. Increasing supply focuses on providing secure, multi-year funding to key aggregating organisations (less than $100m) and reforming the Disaster Ready Fund. Finally, Building capacity recommends investing in peer-to-peer knowledge networks (less than $2m) and undertaking nationally coordinated climate adaptation investment planning at regional scales (less than $500m).