It was born into an era when politicians and voters were finally waking up to the importance of climate policy. But now, its self-described "centrist, pragmatic advocacy" has run out of financial backing.
It's easy to forget, given the political theatrics we've witnessed over the past decade, just how little attention was being paid to climate policy before the explosion of concern in late 2006.
Climate change was simply not an issue that had traction with the federal government, and the business community had fought itself to a standstill on the topic of whether Australia should ratify the Kyoto Protocol, which John Howard resisted to the end.
Bob Carr, the then premier of New South Wales, had been trying to get carbon trading onto state and federal agendas with limited success.
By 2004 attitudes were shifting, not least because of the ongoing Millennium Drought. In a 2015 interview Clive Hamilton, a climate policy academic and inaugural board chair of the Climate Institute, noted:
"In the early 2000s when the environment groups started to get serious about climate change, they adopted their standard tactics, which had run out of steam," Hamilton said.
"The problem for environmentalism in Australia, as well as internationally, is that they had this glorious period of the 1980s and ‘90s, and then they became institutionalised; their tactics became stale. It wasn't their fault - it's just the world changed."
Hamilton explained that in 2005, Mark Wootton, director of the Poola Foundation, approached him saying that he had A$5 million and wanted to spend it on something that would "cut through" the stagnant climate change debate.
Hamilton thought about it and proposed the Climate Institute, which he put together over the ensuing months. After chairing the board for its first year Hamilton returned to his duties at the Australia Institute.
Launching a tour of rural Australia the following year, Wootton told journalists:
"People have to see there is a solution, that there is a way out," Wootton said.
"It's about people moving on and not feeling that sense of despair, which I've genuinely felt, and that's why we set this up"
The institute opened its doors in October 2005 and was soon in the headlines.
Howard attacked Carr, declaring himself "amazed a former Labor premier should advocate that we should sign up to something that would export the jobs of Australian workers".
A month later, the Climate Institute returned fire with an attack on the Howard government's Asia-Pacific Partnership on Clean Development and Climate, widely interpreted as a way for polluting nations to dodge Kyoto.
This pattern of well-timed reports and timely rebuttals has continued over the past 12 years.
During this time the Climate Institute has challenged successive governments to do more, to create stronger policy and a more predictable investment environment - something that is sorely lacking to this day.
The institute's critics will claim it never escaped the neoliberal paradigm - the idea that the market can and will deliver as long as the right policy levers are pulled at the right time.
In fairness, though, it never pledged to transcend free-market economics anyway, although it also tried along the way to expand the argument to include moral (and religious) values.
In the reporting on the institute's demise, its main claims to fame are listed as helping to expand the renewable energy target in 2008, saving the Climate Change Authority from Tony Abbott's axe in 2014, and building bipartisan support for Australia to ratify the Paris climate agreement in 2016.
But there was much else that the Climate Institute worked on, which is in danger of being forgotten.
It toured rural Australia to listen to farmers' concerns.
It tried to signal to politicians that voters cared. For example, before the "first climate change election" in November 2007, it commissioned a poll of 877 voters in nine key marginal electorates.
It found that 73% of voters thought climate change would have either a strong or a very strong influence on their vote at the election, an increase from 62% in August.
It also played a part in stitching together what political scientists call "advocacy coalitions".
One notable example was its help in producing the Common belief: Australia's faith communities on climate change report, released in December 2006 with input from 16 Australian communities including Aboriginal Australians, Anglicans, Baptists, Catholics, Evangelicals, Hindus, Jews, Muslims, Sikhs and other denominations.
Why it died and what's next?
The institute's outgoing chief executive, John Connor, told Reneweconomy that the decision ultimately comes down to funding:
"We haven't been able to plug the funding gap," Connor said.
"Centrist, pragmatic advocacy is not sexy for many people who want to fund the fighters or pour funds into new technology."
As such, the Climate Institute is another victim of the policy paralysis that has exasperated and bewildered commentators.
It is indeed hard to justify the funding of calm, measured policy advice when the mere mention of the most economically tame of notions - an emissions intensity scheme - causes panic and retreat in the federal government.
Climatologist and Climate Council member Will Steffen, interviewed on the ABC, suggested that over the past two or three years many organisations have begun to take climate change on board, and so the institute's unique role was lessened.
But one piece of the furniture that urgently needs saving is the institute's Climate of the Nation, the longest trend survey of the attitudes of Australians to climate change and its solutions.
Hopefully another organisation (I'm looking at you, Australian Conservation Foundation) will pick this up.
The staff of the Climate Institute will hopefully find new roles within the now smaller ecosystem of environmental policy advice.
With the impacts that the institute and others were warning about in 2005 arriving with depressing predictability, Australia desperately needs three things.
It needs community energy programs. It needs effective opposition to plans for yet more fossil fuel extraction. And most relevantly here, it needs a cacophony of well-informed and relentless voices advocating for the most useful policies to get the carbon out of our economy.
There's a fourth thing, actually - luck. From here on we are going to need an enormous (and undeserved) amount of luck if the lost years of ignoring sensible climate policy advice are not to come back and haunt us.
Mark Hudson is a PhD candidate of the Sustainable Consumption Institute at the University of Manchester.
This article first appeared on The Conversation.