The analysis finds that the costs of climate change to local councils - such as repairing roads, drainage, parks and community facilities after floods, storms, and fires - are increasing far faster than local government revenue.
The insured costs of climate change are now 12 times higher than 20 years ago, while local government revenue is only three times higher.
The findings support calls for the release of the National Climate Risk Assessment, which contains important data for councils to prepare for the impact of climate change.
"If a town or suburb is battered by a storm or a bridge is washed away in a flood, local councils are often left to pick up the tab. It's happening more often and with greater severity," said Rod Campbell, Research Director at The Australia Institute.
"This damage is caused by fossil fuel companies and ratepayers shouldn't be expected to pay for the damage caused by coal, gas and oil companies.
"These huge, multinational companies that extract and export Australian resources are in a far better position to pay for climate impacts than local councils.
"Gas and coal corporations have made huge profits recently, many pay little or no tax, and then leave Australians high and dry with the costs of disasters.
"Big gas, coal and oil companies make a killing from climate change, and it's time they started paying for it.
"The Australia Institute has long argued for a National Climate Disaster Fund, which would help pay for the costs of natural disaster response and recovery for Australian households, businesses and local governments. This could be funded by a levy per tonne of carbon pollution.
"If this levy was set at $30 per tonne, it would raise $44 billion in this year alone."
