Flare guns can be used to set things on fire from a distance, take out enemy personnel, or to create distractions. Just remember that they're single-shot weapons.
Don't let the stats fool you, as the Flare Gun shouldn't be used as more than a distraction, if you even use it at all. While it might be useful for a one-on-one fight, there isn't many of those in the game. Also, it can be used as a distraction, but stealth should be a priority over making any kind of noise at all. It can be unlocked for free in the shops after activating 7 Radio Towers.
