This paper examines the role of local institutions in supporting climate change adaptation action from a public policy perspective. While certain adaptation actions will provide public benefits, many others will offer private benefits. The paper argues that adaptation investments and assigning the adaptation responsibility across various actors should be guided by a clear public-private benefit framework.
A case study of adapting to a 'low water future' in North East Victoria is used to discuss the role of local institutions and industries in formulating climate change adaptation strategies. The findings indicate that formulating adaptation strategies, at the local level, has been complicated by the existence of considerable uncertainty in the nature and magnitude of adverse climatic impacts. The planning problem is further exacerbated by considerable information asymmetries and moral hazard issues inhibiting climate change adaptation for reduced water supply by local institutions and industries.