department of climate change and energy efficiency annual report 2009-10

200910 Annual Report

Department of Climate Change and Energy Efficiency

Commonwealth of Australia 2010 ISSN 1838-3157 Thisworkiscopyright.ApartfromanyuseaspermittedundertheCopyright Act 1968, no part maybereproducedbyanyprocesswithoutpriorwrittenpermissionfromtheCommonwealth. Requestsandinquiriesconcerningreproductionandrightsshouldbeaddressedtothe CommonwealthCopyrightAdministration,AttorneyGeneralsDepartmentNationalCircuit BartonACT2600orpostedat:http://www.ag.gov.au/cca

More information about this report Enquiriesregardingthisreportmaybedirectedto: AssistantSecretary GovernanceandRiskFrameworksBranch DepartmentofClimateChangeandEnergyEfficiency Telephone: (02) 6159 7828 Fax:(02)61597007 Acopyofthisdocumentcanbelocatedonthedepartmentswebsiteat: www.climatechange.gov.au/annualreport Coordinated and edited by WordsWorth Writing DesignandtypesettingbyZOOAdvertising PrintedbyCanPrintCommunications

2DepartmentofClimateChangeandEnergyEfficiency200910 Annual Report

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Contents

Section 1: Secretarys reviewSecretarysreview Majorachievementsin200910 Outlookandprioritiesfor201011

911 16 24

Section 2: OverviewPortfoliooverview Departmentaloverview How we will report

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34 35 57

Section 3: Report on performanceProgram1.1:ReducingAustraliasgreenhousegasemissions Program1.2:ImprovingAustraliasenergyefficiency Program1.3:Adaptingtoclimatechange Program1.4:Helpingtoshapeaglobalclimatechangesolution

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61 75 93 101

Section 4: Management and accountabilityCorporategovernance Internal audits Externalscrutiny Informationtechnology Managementofhumanresources Asset management Purchasingandprocurement Consultancies

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115 121 123 127 128 138 138 140

Section 5: Financial statementsFinancialsummary

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Section 6: Other statutory reportingOccupationalhealthandsafety Freedomofinformation Advertisingandmarketresearch Ecologicallysustainabledevelopment Grant programs CorrectionstotheDepartmentofClimateChangeAnnualReport200809 Resourcestatements

215217 218 221 222 224 224 225

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Section 7: ReferencesGlossaryandabbreviations List of requirements Subjectindex

229231 232 236

TablesTable1 Program1.1performance Table2 Program1.2performance Table3 Program1.3performance Table4 Program1.4performance Table5 Operativeandpaidinoperativestaff,byclassificationandgender, at 30 June 2010 Table6 SeniorExecutiveServicesalaryscales,200910 Table7 Collectiveagreementsalaryscalesat30June2010 Table8 Staffprofilebyequalemploymentopportunitytargetgroup, at 30 June 2010 Table9 Commissionspaidtoadvertisingandmarketresearchagencies, 200910 Table10 Environmentalperformance,200910 Table11 AgencyResourceStatement,200910 Table12 ExpensesandresourcesforOutcome1 73 91 98 107 131 132 133 134 221 223 225 226

FiguresFigure1 ClimateChangeandEnergyEfficiencyPortfoliostructure, at 30 June 2010 Figure2 ThethreepillarsofAustraliasclimatechangepolicy Figure3 Topmanagementstructurefollowingmachineryofgovernmentchanges on8March2010 Figure4 Topmanagementstructureat1July2010 Figure5 Outcomeandprogramstructureat30June2010 Figure6 Changestooutcomeandprogramreporting Figure7 Governancecommitteestructure 33 36 48 49 54 57 116


Introduction and guide to the report

Thisisthe200910annualreportoftheDepartmentofClimateChangeandEnergy Efficiency,andthefirstannualreportforthenewlycreateddepartmentfollowingthe machineryofgovernmentchangesannouncedon8March2010. Thedepartmentsannualreportoutlinesperformanceagainsttheoutcomeandprograms inthe200910portfoliobudgetstatementsandportfolioadditionalestimatesstatements oftheformerDepartmentofClimateChangeandoftheDepartmentoftheEnvironment, Water,HeritageandtheArts.

Guide to the reportSection 1ofthereportcomprisestheSecretarysreviewfor200910,andincludesthe departmentsmajorachievementsin200910anditsfocusin201011. Section 2includesoverviewsoftheportfolioandthedepartmentanddescribesthe departmentsrole,functions,organisationalstructureandtherevisedoutcomeand programframeworkthenewlycreateddepartmentwillreportagainstinthisreport. Section 3analysesthedepartmentsperformanceagainstthedepartmentspolicy outcomesandprogramsfortheperiod1July2009to30June2010. Section 4reportsonmanagementandaccountabilityinthedepartment. Section 5presentstheauditedfinancialstatementsofthedepartment. Section 6includesotherreportingasrequiredunderlegislationandtheJune2010 Requirements for annual reports for departments, executive agencies and FMA Act bodies. Section 7containstheglossaryandabbreviationslist,thelistofrequirementsandthe subjectindex.

Other sources of informationTheDepartmentofClimateChangeandEnergyEfficiencyreleasesinformationonits activitiesthroughitswebsite,publications,pressreleases,speechesandreports,including theannualreport.Copiesofthedepartmentspublicationsareavailableonitswebsiteat www.climatechange.gov.au.

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Section 1

Secretarys review

Section 1: Secretarys review

Secretarys review Major achievements in 200910ReducingAustraliasgreenhousegasemissions ImprovingAustraliasenergyefficiency Adaptingtoclimatechange Helpingtoshapeaglobalclimatechangesolution

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16 19 21 22

Outlook and priorities for 201011ReducingAustraliasgreenhousegasemissions ImprovingAustraliasenergyefficiency Adaptingtoclimatechange Helpingtoshapeaglobalclimatechangesolution

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24 25 27 29


Secretarys review

Theyearto30June2010hasbeenoneofsignificantchangeand developmentforthedepartment,acrossalmostallareasof activity.Inmeetingthechallengesbroughtbythesechanges, staffinthedepartmenthavedemonstratedoutstanding professionalism,adaptabilityandastrongcommitmentto deliveringtangibleoutcomesinAustraliaseffortstodealwith climatechange. Twomajorchangesdominatedtheyearintermsoftheirimpact ontheoperationsofthedepartment.Firstly,on8March2010, Martin Parkinson, Secretary thedepartmentbecameaportfolioinitsownrightwhenthe formerDepartmentofClimateChangewascombinedwiththe energyefficiencypartsoftheDepartmentoftheEnvironment,Water,Heritageandthe Arts,becomingtheDepartmentofClimateChangeandEnergyEfficiency.Significanteffort andfocusbytheseniormanagementteamwasrequiredtoimplementboththemachinery ofgovernmentchangesandremedialactiononkeyprogramssuchastheHomeInsulation ProgramandtheGreenLoansProgram. Secondly,furtherchangecameon27April2010,whentheformerPrimeMinister announcedthedeferraloftheCarbonPollutionReductionScheme(CPRS).The departmenthadworkedverydiligentlythroughout200910tosupportthedesignand implementationoftheCPRS,includingthroughthepreparationoflegislation,analysisand briefing,andconsultationwithindustryandcommunitystakeholders.Thedepartment hadalsoundertakennecessarypreparationstoestablishtheAustralianClimateChange RegulatoryAuthority,whichwouldhaveadministeredtheCPRS.Withthedeferralofthe CPRS,considerableeffortwasmadetoensurethatthelessonslearnedinrecentyears wouldbeeasilyaccessiblewhentheissueofcarbonpricingwasrevisited. Theimplementationofclimatechangemitigationprogramscontinuedthroughoutthe year.InJanuary2010,thedepartmentestablishedtheAustralianCarbonTrustLimited, aCommonwealthownedcompanythatwillsupportactionbytheprivatesectoron climatechange. ThedepartmentcontinueditsworkontheexpansionoftheRenewableEnergyTarget (RET)scheme,whichaimstoensurethat20percentofAustraliaselectricitysupplyis generatedfromrenewablesourcesby2020.AnagreementbytheCouncilofAustralian Governments(COAG)cameintoeffectinAugust2009,creatingasinglenationalRET scheme.Furtherpolicyandlegislativeworkwasundertakentosupportgovernment decisionsthatwillsplittheRETschemeintosmallscaleandlargescalecomponents effectivefromJanuary2011.

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Section 1:Secretarysreview

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Thedepartmentalsoconductedsignificantworkonthechallengesandopportunities thatclimatechangeposestoAustralianagricultureandforestry.Workbeganona comprehensivedomesticoffsetprogramtocomplementtheCPRSandtheNational CarbonOffsetStandard. Workcontinuedonthedevelopmentandimplementationoftheemissionsintensive tradeexposed(EITE)assistanceprogram.In200910,thedepartmentreleased22activity definitionsfordatacollection(takingthetotalto40)andformallyassessedafurther 10activities.Asaresult,16EITEactivitieswerelistedintheRETregulationsaseligibleto receivepartialexemptionsin2010. Accuratemeasurementandreportingofgreenhousegasemissionsandenergy consumptionandproductionarethecornerstoneofanyefforttochangepatternsof energyusage.During200910,thefirstcycleofmandatoryregistrationandreporting under the National Greenhouse and Energy Reporting Act 2007wascompleted.Over 700corporationsarenowregisteredtoreporttheiremissionsandenergyconsumption andproduction.Atthetimeofreporting,95percentofcorporationsthatwererequiredto reporthaddonesoforthe200809financialyear. ThetransferofenergyefficiencyresponsibilitiestothedepartmentinMarch2010brought withitresponsibilityfortwohighprofileprograms.TheHomeInsulationProgram (HIP)wasdesignedtoimprovetheenergyefficiencyofAustralianhomes,aswellas generateeconomicstimulusandsupportjobsandsmallbusinesses.Thetragicdeaths offourinstallershasbeenlinkedtotheHIP.Therearealsoongoingconcernsregarding noncomplianceandfraudundertheHIP.WiththeclosureofHIP,theHomeInsulation ProgramReviewOfficewasestablishedinMarch2010toimplementtheHomeInsulation SafetyPlan.Majorsafetyprogramshavesubsequentlybeenlaunched,actionisunderway toinvestigatepossiblefraud,andindustryassistancemeasureshavebeendelivered. TheGreenLoansProgramwaslaunchedon1July2009withtheobjectiveofencouraging widescaleimprovementofenergyandwaterefficiencyinexistinghomesandproviding financialassistanceandsoundadvicetohouseholdsonthemostappropriateactions toreducetheenvironmentalimpactofoperatingtheirhome.Therehavebeenongoing concernsaboutthedesignandadministrationofthisprogram.Theunexpectedlevelof demandexperiencedinthefirstsixmonthsoftheGreenLoansProgramledtoarange ofproblemsinadministration,includingdelaysinwaitingtimesfortheGreenLoanscall centre,paymentstohomesustainabilityassessorsanddeliveryofhomesustainability reportstohouseholds.IntheperiodsinceMarch2010,thedepartmenthasexpanded complianceactivities,auditactivityhascommenced,outstandinghomesustainability assessmentreportshavebeendeliveredandthereisnowareductioninthedelaysof paymentstoassessors.


TheproblemswithHIPandGreenLoansresultedintwomajorprogramreviewsinitiated bythegovernment.TheReviewoftheAdministrationoftheHomeInsulationProgram, conductedbyDrAllanHawkeAC,wasreleasedon6April2010.Thereportofthe IndependentInquiryintotheGreenLoansProgram,conductedbyMsPatriciaFaulkner, wasreleasedbythegovernmenton8July2010.Whilethesereportscontainthefindings ofverydifferentreviews,ondifferentscales,withdifferingtermsofreference,boththe HawkeReviewandFaulknerInquiryholdimportantlessonsforthenewDepartmentof ClimateChangeandEnergyEfficiency.TheHawkeReviewandtheFaulknerInquiryboth highlightedanumberofkeyelementswhichledtotheunintendedconsequencesofthe programs,inparticular: theneedforstrongerleadershipandgovernancebalancedtothelevelofrisk the quality of program design, planning and management needforimprovementsinorganisationalculture theconductofrisk,auditandcomplianceactivitieswithintheprograms,andspecifically theneedformuchearlierrolloutofsuchactivities thelackofresources(bothindividualswithappropriateskillsandexperienceand fitforpurposebusinesssystems)devotedtotheprograms. AsSecretary,Iamcommittedtoaddressingtheseissuesandwewilldothisby: promotingstrongleadership,supportedbystrengtheninggovernanceframeworks applying robust program design, planning and management supportingaculturewhichpromotesfiscalresponsibility,prudenceandprobity applyingappropriateframeworksforauditandcompliance,whichareimplementedat thecommencementofprogramdelivery investinginourresources,includingwelltrainedandsupportedstaffthatexemplify professionalbehaviour,integrityandupholdtheAPSValues welldesigned,scalableandflexiblebusinesssystems,especiallyinformationtechnology, humanresourcesandfinancialplatforms. Despitetheseproblems,during200910overhalfamillionhouseholdsdirectlybenefited fromarangeofpopularandsuccessfulprogramsdesignedtohelpAustraliansimprove theirenergyefficiencyanduseofrenewableenergy.Substantialinvestmentsweremade inassistingAustralianhouseholds,communitygroupsandschoolswiththecostofthe purchaseandinstallationofsolarpowersystems,solarhotwatersystemsandother energyefficiencyproducts.UndertheGreenLoansProgram,almost335,000Australian householdsalsoreceivedafreehomesustainabilityassessmentwhichprovidesthem withadviceonwaystoimprovetheirenergyandwaterefficiencyandreducegreenhouse gasemissions.

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ThedepartmentcontinuedtodrivethedevelopmentandimplementationofCOAGs NationalStrategyforEnergyEfficiency,includingthroughenhancementstotheBuilding CodeofAustralia,theintroductionoftheBuilding Energy Efficiency Disclosure Act 2010,andexpandingtherangeofappliancescoveredbyMinimumEnergyPerformance Standardsand,whereappropriate,thestringencyofstandards. HelpingAustraliaadapttotheunavoidableeffectsofclimatechangeisanotherofthe departmentsimportanttasks.In200910,thedepartmentsupportedthegovernments leadershipofthenationaldebateonclimatechangeadaptation,meetingagrowingdemand forinformationandadvice,especiallyfromcoastalcommunities.Duringtheyear,the departmentcontributedtothegovernmentspolicypaperAdapting to climate change in AustraliaandtheNationalCoastalRiskAssessment,whichprovidedwholeofcoast modellingoftheimplicationsofsealevelrises.ThedepartmentalsohostedtheNational ClimateChangeForum,bringingtogether200decisionmakerstobeginadialogueonthe nationalcoastaladaptationagenda. TheUnitedNationsFrameworkConventiononClimateChangeConferenceinCopenhagen inDecember2009producedasolidplatformforaction,evenifitdidnotmeetthehigh expectationsofsomecommentatorsandparticipants.Whilethemeetingdidnotdelivera legallybindingglobalagreement,participantsdidmakesignificantprogress,encapsulated intheCopenhagenAccord.Undertheaccord,abroadgroupofcountriesagreed,forthe firsttime,onadefinitionofdangerousclimatechange,pledgingtokeeptemperature riseswithintwodegrees.Partiestotheaccordalsoagreedtospecifytheircommitments andactionswithinasingleframeworkdocument,pavingthewayforaunitedbutstill differentiatedapproachbydevelopedanddevelopingcountriestotacklingclimate change.ThecountriesthatpledgedactionundertheCopenhagenAccord,includingthe USA,ChinaandIndia,accountforaround80percentofglobalemissions.Amajorfocus ofthedepartmentthisyearhasbeentoensurethefullintegrationofdomesticpolicieswith internationalclimatepolicy. Inourregion,thedepartmenthasbeenactiveinsupportofAustralianGovernment foreignpolicyandclimatechangeobjectives,includingonfinancinginitiativesarising fromtheCopenhagenAccord,indevelopingprogramstoreduceforestdegradation,andby supportingourPacificneighboursastheyrespondtoclimatechange. Withinthedepartment,200910wasachallengingyear.Themachineryofgovernment changesinMarch2010generatedsubstantialorganisationalchanges,effectivelydoubling thesizeofthedepartment.Intheensuingmonths,significantefforthasresultedinthe physicalconsolidationofthedepartmentintheCanberracentralbusinessdistrict,on onecommunicationsnetworkandoperatingwithmuchimprovedfinancialandhuman resourcemanagementsystems.


Theoutlookforthedepartmentin201011isexciting.Wehaveawiderangingagenda acrossallthearmsofclimatepolicyandhaveunfinishedbusinesstosatisfactorilywindup olderprograms,consistentwithourresponsestotheindependentprogramreviews.Work hasalsonowcommencedonnew,greeneraccommodationthatwillbereadyforusto occupyin2012. Finally,Iwouldliketothankthedepartmentsstafffortheiroutstandingeffortsoverthe courseoftheyear,andourstakeholdersforthepositiveandprofessionalwayinwhichthey haveengagedwithusduringourvariousinteractions.

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Major achievements in 200910Reducing Australias greenhouse gas emissionsCarbon Pollution Reduction Scheme design and offsets policyFormuchof200910,thedepartmentworkedonrefiningthepolicydesignfortheCPRS anditssupportinglegislationandregulations. ThedepartmentpreparedamendmentstodraftlegislationinAugustandDecember2009 andinFebruary2010forconsiderationbyparliament,alongwithmaterialstosupportthe MinisterforClimateChange,EnergyEfficiencyandWaterinparliament.Thedepartment alsopreparedpolicyadviceanddraftregulationsonparticularelementsoftheCPRS, includingemissionsunits,theAustralianNationalRegistryofEmissionsUnits,electricity generatorassistanceandemissionsintensivetradeexposedindustriesassistance. Thedepartmentundertooksignificantanalysisandbriefinginsupportofthepolicy changesannouncedbythegovernmenton24November2009.Thesechangesincluded theindefiniteexclusionofagriculturefromtheCPRS;acomprehensiveoffsetspolicyto encourageabatementfromsourcesincludingagriculturenotcoveredbytheCPRS; amechanismtoaccountforvoluntaryactionintargetsetting;andamendedornew industrytransitionalassistancemeasuresforelectricitygenerators,thecoalminingsector, emissionsintensivetradeexposedindustries(EITEs),andmediumtolargeminingand manufacturingfacilities.ThechangeswereincludedintheCPRSlegislationpackage introducedintoparliamenton2February2010. Thegovernmentannouncedon27April2010thatitwouldnotintroducetheCPRSuntil aftertheendofthecurrentcommitmentperiodoftheKyotoProtocol(whichexpiresin 2012)andonlywhenthereisgreaterclarityontheactionsofothermajoreconomies, includingtheUSA,ChinaandIndia.

Enhanced Renewable Energy Target schemeInAugust2009,parliamentpassedlegislationtoimplementtheexpandednationalRET scheme,designedtodeliveronthegovernmentscommitmenttoensurethattheequivalent of20percentofAustraliaselectricitysupplycomesfromrenewablesourcesby2020.The legislationgaveeffecttoanagreementbyCOAGtocreateasinglenationalRETscheme. On26February2010,thegovernmentannouncedthat,fromJanuary2011,theRET schemewouldbeseparatedintotwopartstheSmallscaleRenewableEnergyScheme (SRES)andtheLargescaleRenewableEnergyTarget(LRET).Theseparationwillprovide


greatercertaintyforhouseholds,largescalerenewableenergyprojectsandinstallersof smallscalerenewableenergysystems.Legislationtoimplementthechangeswaspassedby parliamenton24June2010.

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EITE industry assistance programThedepartmentcontinuedtodevelopandimplementtheEITEindustryassistance program.In200910,thedepartmentfinalised22EITEactivitydefinitions,completedthe formalassessmentprocessforanadditional10activities,andreleasedasecondexposure draftofregulationstoimplementEITEpolicyundertheCPRS.Inaddition,thedepartment released,consulteduponandfinalisedregulationsundertheRETtoenablepartial exemptionsfor16EITEactivitiesinthe2010RETyear.ThenumberofEITEactivities eligibleforpartialexemptionsundertheRETin2010isexpectedtoincreasebefore applicationscloseinOctober2010.

National Carbon Offset StandardOn24November2009,thedepartmentreleasedtheNationalCarbonOffsetStandard. Thestandardwillprovidenationalconsistencyandconsumerconfidenceinthevoluntary carbonmarket,andprovideguidanceonwhatconstitutesagenuine,additionalvoluntary offsetwithinthecontextofAustraliasinternationalcommitments. ThedepartmentcertifiedsixnewcarbonneutralparticipantsundertheGreenhouse Friendlyinitiativeinitslastyearofoperation.ThenewNationalCarbonOffset StandardCarbonNeutralProgramwillreplacethecarbonneutralcomponentof GreenhouseFriendly.

Australian Carbon TrustIn January 2010, the department established the Australian Carbon Trust Limited as a Commonwealthownedcompanythatwillsupportactionbybusinessonclimatechange. Thetrustwillimplementtwoprograms:the$100millionEnergyEfficiencyTrust,which willprovidearangeoffinancingandadvisoryservicestoencouragetheuseofenergy efficienttechnologiesandpracticesforcosteffectivecarbonreductions;andtheNational CarbonOffsetStandardCarbonNeutralProgram,whichwillenableorganisationstogain certificationforoffsettingsomeoralloftheemissionsassociatedwiththeiroperations.

Greenhouse and energy reportingThe National Greenhouse and Energy Reporting Act 2007(NGERAct)establisheda mandatoryreportingsystemforgreenhousegasemissions,energyconsumptionand


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productionbyeligibleAustraliancorporations.In200910,thedepartmentadministered theregistrationofmorethan600corporations,bringingthetotalnumberofregistered corporationsto723. Thedepartmentmanagedsubmissionsfrom95percentofregisteredcorporations, coveringapproximately9,000facilities,andvalidatedthedatafromcorporationsthat submittedtheirreports. Asrequiredbythelegislation,thedepartmentsGreenhouseandEnergyDataOfficer publishedtheemissionsandenergyconsumptiondataof233corporationsthathad greenhousegasemissions(scope1andscope2)abovethe200809corporatethresholdof 125kilotonnes. Thedepartmentexpandeditsoutreachandcompliancemonitoringactivitiesduringthe year.Thedevelopmentofauditorregistrationandauditmanagementcapabilitiesbegan. Thedepartmentalsoimplementedarangeofregulatorycapabilitiestoadministerthe NGERActandtoestablishtheframeworktodiscloseNGERdatatoAustralian,stateand territorygovernments. TheNGERActwasamendedon18September2009.In200910,thedepartment amendedfourlegislativeinstrumentstosupporttheoperationoftheAct.Thesewere the National Greenhouse and Energy Reporting (Measurement) Determination 2008, the National Greenhouse and Energy Reporting Regulations 2008, the National Greenhouse and Energy Reporting (Audit) Determination 2009 and the Greenhouse andEnergyReporting(AuditorRegistration)Instrument2010.Together,thesenewand revisedinstrumentsestablishedacomprehensiveframeworkforgreenhouseandenergy auditsundertheNGERAct,whichwillensuretheintegrityofinformationreportedby registeredcorporations.

Emissions accounting and reportingEachyear,thedepartmentpreparesandsubmitsAustraliasNational Inventory Report undertheUNFCCC.Thisyearsreport,fortheperiod19902008,coveredthefirstyear oftheKyotoProtocolcommitmentperiodandincluded,forthefirsttime,greenhousegas emissionsestimatescompiledusingtherulesapplicabletoboththeKyotoProtocoland theUNFCCC. Inaddition,fromAugust2009thedepartmentbegantoprovideindustryandstakeholders with more timely information on Australias national emissions by publishing quarterly emissionsestimatesforthenationalinventory.


Prime Ministers Task Group on Energy EfficiencyFromFebruarytoJuly2010,thedepartmentsupportedthePrimeMinistersTaskGroup onEnergyEfficiency.Inlinewiththetermsofreference,thetaskgrouppresenteda reporttogovernmentinJuly2010onoptionsforintroducingmechanismstodelivera stepchangeimprovementinAustraliasenergyefficiencyby2020andplaceAustraliaat theforefrontofOECDenergyefficiencyimprovement. ThetaskgroupcomprisedtheSecretary,DrMartinParkinson(chair),withdeputy secretariesfromtheDepartmentofthePrimeMinisterandCabinetandtheTreasury, andthethenDeputySecretary,laterSecretary,oftheDepartmentofResources,Energy andTourism.Thetaskgroupwassupportedbyasmallinteragenciessecretariatlocated withinthedepartment.Anexternaladvisorygroupworkedcloselywiththetaskgroupand consistedofrepresentativesfromtheenergymarketbodies,industry,theEnergyRetailers Association,theWorldWildlifeFund,theClimateInstitute,theEnergyEfficiencyCouncil, theAustralianCouncilofSocialService,andtheAustralianCouncilofTradeUnions. Thetaskgroupcanvassedawiderangeofstakeholdersinthedevelopmentofitsreport, includinginanationalconsultationprocess.Some200submissionswerereceivedfrom allsectorsofthecommunityinresponsetothepublicationofanissuespaper.More than300peopleattendedconsultationworkshopsheldinSydney,Melbourne,Brisbane andPerth.

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Improving Australias energy efficiencyEnergy efficiency policiesFollowingmachineryofgovernmentchanges,responsibilityforenergyefficiencyand renewableenergywastransferredtothenewdepartmenton8March2010. Theadversepublicityaroundsomeenergyefficiencyprogramshasmeantthatlimited publicattentionhasfallenonanumberofkeyinitiativesimplementedduring200910. Theseincludepoliciesdesignedtoincreasetheuptakeofenergyefficienttechnologyby householdsandindustry,includingtheBuilding Energy Efficiency Disclosure Act 2010, and the Smart Grid, Smart Cityinitiative.Inaddition,thedepartmenttookcarriageofa newprogram,theRenewableEnergyBonusSchemeSolarHotWaterRebate,announced bythegovernmentinFebruary2010.Thisalsoinvolvedoverseeingthephaseoutofthe previousrebatescheme,whichwaswoundupinMay2010.


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Home Insulation ProgramNotwithstandingitssuccessinencouragingtheinsulationofaround1.2millionhomes,the HomeInsulationProgram(HIP)hasbeenlinkedwiththetragicdeathsoffourinstallers andongoingconcernsregardingcomplianceandfraud.Withthetransferofresponsibility fortheprogramtothenewdepartmentinMarch2010,theHomeInsulationProgram ReviewOffice(HIPRO)wasestablishedandquicklycommencedaprogramofsafety inspections.On1April2010MinisterCombetannouncedtheHomeInsulationSafetyPlan whichconsistedoftheFoilInsulationSafetyProgram,HomeInsulationSafetyProgram, InsulationIndustryAssistanceProgramandaFraudandComplianceProgram.Thisplanis nowwellunderway,withsignificantprogressintheInspectionandRectificationProgram.

Green Loans ProgramSincetheGreenLoansProgramcommencedon1July2009,almost335,000Australian householdshavereceivedafreehomesustainabilityassessmentwhichprovidesthemwith adviceonwaystoimprovetheirenergyandwaterefficiencyandreducegreenhousegas emissions.ThedepartmenttookcarriageoftheGreenLoansProgramon8March2010. Sincethen,substantialimprovementsindeliveryoftheprogramhavebeenachieved, includingclearingthebacklogofassessmentreports,bringingpaymentprocessingtimes within30days,andsignificantlyimprovingcallcentreperformance.

National Solar Schools ProgramIn200910,thedepartmentassistedmorethan2,300schoolstobecomesolarschools andimprovetheirenergyefficiency.Fundingofupto$50,000wasprovidedtoschools wanting to install solar and other renewable power systems, solar hot water systems, rainwatertanksandarangeofenergyefficiencymeasures.Bytheconclusionofthe programat20June2015,theaimisthateveryschoolinAustraliawillbeasolarschool.

Renewable Energy Bonus SchemeSolar Hot Water RebateOn19February2010theAustralianGovernmentannouncedtheRenewableEnergy BonusSchemeSolarHotWaterRebate,toassisthouseholdstoadoptclimatefriendly technologiesandtosavemoneyonpowerbills.Underthisnewscheme,whichreplaces theSolarHotWaterRebateProgramEnergyEfficientHomesPackage,theAustralian Governmentisprovidinghouseholdswitha$1,000rebateforeligiblesolarhotwater systemsand$600forheatpumpsystems.During200910,over122,000Australian householdshavebenefittedfromthegovernmentssolarhotwaterrebates.


Solar Homes and Communities PlanApplicationstotheSolarHomesandCommunitiesPlanclosedon9June2009.During 200910,workcontinuedonassessingtheseapplications,withover76,000Australian householdsreceivingarebateofupto$8,000toassistthemtopurchaseandinstallasolar powersystem.TheAustralianGovernmentcontinuestosupportAustralianhouseholdsand groupstoincreasetheiruseofsolarpowerthroughtheSolarCreditsmechanismunderthe RETscheme.

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Adapting to climate changeAustralian Government adaptation policyThedepartmentmadeconsiderableprogressin200910insupportingAustralias adaptationtotheunavoidableimpactsofclimatechange.Thedepartmentcoordinated thedevelopmentofAdapting to climate change in Australia: an Australian Government position paper,whichwaspublishedinFebruary2010.Thepaperdescribedtheroles oftheAustralianGovernmentinadaptation,identifiedprioritiesforinitialnational adaptationactionandsetoutabroadstrategyforprogressingadaptationreform. TheframeworkoutlinedinthispaperwaswelcomedbydecisionmakersacrossAustralia, andithasprovidedafoundationforreinvigorationofanationaladaptationagendawith thestatesandterritoriesthroughCOAG. Majorprogresswasalsomadeindevelopingaunifiednationalapproachtocoastal adaptation.ThefirstNationalCoastalRiskAssessment,releasedbySenatortheHon PennyWong,thentheMinisterforClimateChange,EnergyEfficiencyandWater,in November2009,providedarobustanalyticalbasetounderpinconsiderationofpolicy reform.Thereportdescribedthemajorchallengesthatclimatechangewillbringtocoastal management,basedonnew,wholeofcoastmodellingoftheimplicationsofsealevelrises. Itfoundthatupto247,600existinghouseswithavalueofaround$60billionwereatrisk ofinundationfromasealevelriseof1.1metresasaresultofclimatechangethatcouldbe expectedtooccuraroundtheturnofthecentury. Theanalysisassessedriskofinundationfora1.1metresealevelriseandstormsurge(1in 100yearevent)forthestateswithstormsurgedatafortheirwholecoastline(Victoria, TasmaniaandNewSouthWales).Fortheremainderofthestates,theanalysiswasbased ona1.1metresealevelriseandahightide. Whileworktodatehasfocusedoninundationimpactsonhousing,muchofAustralias economicandsocialinfrastructure(ports,roads,hospitalsandairports)isalsoatrisk.


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HavinganationalstormtidedatasetforthewholeoftheAustraliancoastlineiscriticaland workisunderwayondevelopingthis.

National coastal adaptation forumTheNationalClimateChangeForum:AdaptationPrioritiesforAustraliasCoastwas convenedbythedepartmentinAdelaideon1819February2010,bringingtogether around200coastaldecisionmakersfromgovernment,professionalassociationsandthe researchcommunity.Theforumachievedabroadconsensusonthebenefitsofenhanced consistencyinpolicysettingsforcoastaladaptation,andontheneedforinformationto supporttheincorporationofadaptationintodecisionmaking.

Helping to shape a global climate change solutionCopenhagen AccordThedepartmentactivelysupportedtheformerPrimeMinisterandMinisterin pursuingAustraliasnationalinterestsattheUNFCCCConferenceinCopenhagenon 718December2009.Australiawasoneofthe30countriesthatworkedtogetherto draftthekeyoutcomeoftheconference,theCopenhagenAccord.Negotiatedbyleaders frombothdevelopedanddevelopingcountries,theaccordrepresentsthehighest levelofpoliticalcommitment.Undertheaccord,developedanddevelopingcountries agreedforthefirsttimeonagoalofholdingtheincreaseinglobaltemperaturetobelow 2degreesCelsius,andagreedtospecifywhattheywoulddotoachievethisgoalandtoa frameworkfortrackingprogress. Followingtheconference,thedepartmentworkedwithothercountriestoimplement keyelementsoftheaccord,notablyintheareasoffinance,reducingemissionsfrom deforestationandforestdegradationindevelopingcountries,andmeasurement,reporting andverificationofemissionsreductions.

Australias faststart financing for mitigation and adaptationAttheCopenhagenConference,developedcountriescommittedtoprovidingfaststart fundingapproachingUS$30billiontosupportdevelopingcountriesclimatechange actionsfortheperiod201012. Thedepartment,incooperationwithAusAID,coordinatedawholeofgovernmentposition onAustraliascontributiontothefaststartfunding.Australiasfaststartpackage,which totals$599millionofgrantbasedofficialdevelopmentassistance,willbedelivered overtheperiodto201213usingexistingpartnerships,mechanismsandrelationships.


ConsistentwiththeCopenhagenAccord,Australiaspackageisbalancedbetween adaptationandmitigation.Atleast25percentofthepackagewillbenefitsmallisland developingstates.

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Reducing emissions from deforestation and forest degradation in developing countriesTheAustralianGovernmentiscommittedtoreducingemissionsfromdeforestation andforestdegradation(REDD),whicharecommoninmanydevelopingcountries.The department,workingcloselywithAusAID,strengthenedAustraliasbilateralclimate changecooperationwithIndonesiain200910,securingagreementbyIndonesiain March2010toasecondlargescalepracticalREDD+activity:the$30millionSumatra ForestCarbonPartnership.TheprojectwillbelocatedonmineralsoilsintheJambi provinceoftheislandofSumatra.ThefirstjointprojectwithIndonesiaunderthe partnership,theKalimantanForestsandClimatePartnership,waslocatedinCentral Kalimantanandisongoing. ThedepartmentledAustraliasparticipationinacollaborativeefforttoproducean internationalREDD+Partnershipagreement.DevelopedthroughtheParisOslo process,itbuildsontheCopenhagenAccordsagreementontheurgentneedforaREDD+ mechanism.Thepartnershipagreement,endorsedinMay2010byover50countries (includingAustralia),providesaplatformforcountriestoincreaseREDD+actionsand finance,andtoimprovetheeffectiveness,efficiency,transparencyandcoordinationof REDD+initiatives.ItwilladvanceREDD+actionintheimmediateterm,withoutcomesto feedbackintotheUNFCCCprocess. AspartoftheParisOsloprocess,thedepartment,incooperationwithcounterpartsin FranceandPapuaNewGuinea,conductedasurveyofREDD+financingandactivitiesin early2010.Thesurveysynthesisreportformsthebasisofatransparentglobaldatabaseof REDD+financingandactivitiestosupporttheREDD+Partnership.Thesurveyisavailable onlineathttp://www.oslocfc2010.no.

Engagement with Pacific island neighboursAtthe40thPacificIslandsForum,hostedbyAustraliainAugust2009,thePrimeMinister launchedtheAustralianGovernmentsPacificclimatechangepolicydocument,Engaging our Pacific island neighbours on climate change: Australias approach.Producedby thedepartment,thedocumentwasthefirstcomprehensivestatementoftheAustralian GovernmentscommitmenttoassistPacificislandcountriestorespondtoclimatechange. ItdefinedthechallengesofclimatechangeinthePacificandprovidedclearguidanceon futuresupport.


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Outlook and priorities for 201011Reducing Australias greenhouse gas emissionsAdvise and implement climate change mitigation policyIn201011,atoppriorityforthedepartmentwillbetoadviseonandimplementthe governmentsclimatechangemitigationpolicies. Thedepartmentwilladviseon,andimplementasrequired,anintegratedsuiteofmeasures toreducegreenhousegasemissions,promoteandimproveenergyefficiency,andaccelerate thedevelopmentanddeploymentofrenewableenergytechnologies.

Enhanced Renewable Energy Target schemePrimarylegislationtoseparatetheRETschemeintotheSRESandtheLRETwaspassed bytheparliamenton24June2010.Inthesecondhalfof2010,thedepartmentwillwork withindustrystakeholdersandtheRenewableEnergyRegulatortodevelopsubordinate legislationtosupportthesechanges. Thedepartmentwillcontinuetoworkwithstateandterritorygovernmentstofinalisethe COAGReviewofSpecificRETIssues.Areportontheoutcomesofthereviewisexpectedto beconsideredbyCOAGinthesecondhalfof2010. Thedepartmentwillalsobeworkingwithstakeholdersonenhancementstothecompliance andperformancerequirementsforsmallgenerationunits,includingnewregulationsto implementcomplianceinspectionsofastatisticallysignificantselectionofinstallations.

Assess potential emissionsintensive tradeexposed activitiesThedepartmentexpectstoundertakeupto25assessmentsofpotentialemissions intensivetradeexposed(EITE)activitiesin201011.Activitiesformallyassessedasbeing moderatelyorhighlyemissionsintensivewillbeeligibleforpartialexemptionsunder theRET.

Greenhouse and energy reportingThedepartmentwillenhanceitsregulatoryandadministrativecapabilitiesinmeasuring, monitoringandreportingonAustraliasgreenhouseandenergydata. In201011,theOnlineSystemforComprehensiveActivityReportingreportingtoolwillbe updatedtoincorporatechangestotheNationalGreenhouseandEnergyReporting(NGER)


measurementdetermination.Workwillalsocontinueonimprovingfunctionalityfor reportersandthedepartment. Thedepartmentwillcontinueitscollaborationwiththestates,territoriesandother Australiangovernmentagenciestoalignthereportingrequirementsofexistingprograms withtheNGERlegislativeframeworkandtheNGERStreamliningProtocol.Aspartofthe streamliningprocess,thedepartmentwilldiscloseNGERdatatocertainotherAustralian Governmentagenciesandauthoritiesandthestatesandterritoriesforusebytheseparties intheadministrationoftheirprograms. During201011,thedepartmentwillcontinuetobuildawarenessamongcorporations oftheirobligationsundertheNGERActandwillalsofurtherdevelopandrefineits capacitytodetectandrespondtononcompliance.Thedepartmentwilldevelopgreater organisationalcapacityintheareasofintelligencecollectionanddataanalysis,risk assessmentandtargetcomplianceoperationstoensuretheintegrityofthemandatory greenhouseandenergyreportingscheme. HavingintroducedtheGreenhouseandEnergyAuditorRegistrationSystemin March2010,thedepartmentwillcommencethefirstannualGreenhouseandEnergyAudit Programinthefirsthalfof201011.

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National Carbon Offset StandardThe department will work with the Australian Carbon Trust to establish and promote thestandardsnewCarbonNeutralProgramandtoincreaseparticipationbyAustralian businesses.ThedepartmentwillreviewtheoperationoftheNationalCarbonOffset Standardin201011.

Emissions accounting and reportingDatacollectedthroughtheNationalGreenhouseandEnergyReportingSystem(NGERS) isnowavailabletoassistinthepreparationofAustraliasNationalInventoryReport2009. Apriorityfor201011willbetodecidehowbesttousetheNGERSfacilityleveldatato improvetheaccuracyandcoverageofthenationalgreenhousegasinventoryandhowto equiptheinventoryinformationsystemstomanagethedata.

Improving Australias energy efficiencyHome Insulation Safety PlanApriorityforthedepartmentistocontinuetoaddressissuesraisedinthe10March2010 ministerial statement by the then Minister Assisting the Minister for Climate Change and


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EnergyEfficiency,theHonGregCombet,AM,MP,inparticular,safetyconcernsregarding thediscontinuedHomeInsulationProgram(HIP).Keyelementsofthework,assetoutin theHomeInsulationSafetyPlanannouncedbytheMinisteron1April2010,are: aHomeInsulationSafetyProgramtoconductsafetyinspectionsofatleast 150,000 houses that had non-foil insulation installed under the HIP aFoilInsulationSafetyProgramtoinspectandrectifyeveryhousethathadfoil insulation installed under the HIP industryassistancethroughtheInsulationWorkerAdjustmentPackage(administered bytheDepartmentofEducation,EmploymentandWorkplaceRelations)andthe InsulationIndustryAssistancePackage(administeredbyAusIndustry) strongfraudandcomplianceactionstoidentifyandappropriatelymanage noncomplianceundertheHIP.

National Strategy for Energy EfficiencyThedepartmentwillcontinuetoimplementtheNationalStrategyforEnergyEfficiency,the headlineagreementbetweentheAustralian,stateandterritorygovernmentsonimproving energyefficiency.ThestrategywasagreedbyCOAGtoaccelerateenergyefficiencyefforts, streamlinerolesandresponsibilitiesacrosslevelsofgovernment,andhelphouseholdsand businessesprepareforalowcarbonfuture. In201011,thedepartmentwillimplementtheBuilding Energy Efficiency Disclosure Act 2010anddeveloplegislationtoimplementtheGreenhouseandEnergyMinimum Standards. Beyondthelegislativesphere,thedepartmentwillimprovebuildingenergyefficiency performancethroughaNationalFrameworkforBuildingStandardSetting,Ratings andAssessment.

National Energy Efficiency InitiativeInJune2010,SenatorWongannouncedthecityofNewcastleasthewinningbidderfor theNationalEnergyEfficiencyInitiative(Smart Grid, Smart City)demonstrationproject. Thedepartmentwillimplementthecommercialscaleprojectinpartnershipwiththe EnergyAustraliaconsortium.


Renewable energy programsIn201011,thedepartmentwilldeliverprogramstohelpAustralianhouseholdsreduce theirenergyandwaterusage,whilealsoensuringtheaccountabilityofgovernment spendingontheseprograms. On8July2010,SenatorWongannouncedthediscontinuationoftheGreenLoans ProgramandthetransitiontoagrantsbasedGreenStartprogram.Overthecomingyear, apriorityforthedepartmentwillbetoeffectivelymanagethephaseoutoftheGreen LoansProgram,anditstransitiontothenewGreenStartprogram.ThenewGreenStart programwillbedeliveredthroughCommonwealthgrantsintworoundsandapplications forfundingunderbothoftheseroundswillopeninthesecondhalfof2010. ThenewGreenStartarrangementswillparticularlybenefitlowincomeanddisadvantaged Australiansbyhelpingthemtosaveenergyandreduceenergybills.Thearrangements willalsogivegreatercertaintytohomesustainabilityassessorsabouttheirfuturework. ThedepartmentwillbeworkingtoensurethattheGreenStartprogramisdeliveredwith transparentandrobustadministration. ThedepartmentwillmanagetheclosureoftheSolarHomesandCommunitiesPlan, includingfinalisingoutstandingrebatepayments. ThedepartmentwillcontinuetorollouttheredesignedNationalSolarSchoolsProgram andwillworktoensureitseffectiveness,includingthroughprovidinginformationtothe educationsector.Thedepartmentwillalsoestablishagreementswithstateandterritory educationagenciesandblockgrantauthoritiesforthedeliveryoftheNationalSolar SchoolsProgram. TheRenewableEnergyBonusSchemeSolarHotWaterRebate,announcedby SenatorWonginFebruary2010,willcontinuetobeimplementedin201011.

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Adapting to climate changeAdaptation policyIn201011,thedepartmentwillworkacrossgovernmenttoembedclimatechange adaptationintopolicydevelopment,programdeliveryandassetmanagement.The departmentwillworkwithstatesandterritoriesthroughCOAGtodevelopandimplement anationaladaptationpositiononrolesandresponsibilities,andtodevelopcollaborative actionsonadaptationinthecoastalzone.


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FurtherworkwillbedirectedtodevelopingAustralianGovernmentadaptationapproaches toensurethatnationalinfrastructureisresilienttolikelyclimatechangeimpacts.This willinvolvecloseliaisonwiththeagenciesresponsibleforinfrastructureandregional development,industrypolicy,criticalinfrastructureprotection,andenergyandresources.

Adaptation capacityIn201011,thedepartmentwillcoordinateresearchthatequipsdecisionmakersto manageemergingrisksfromclimatechangeimpacts.Akeyfocusoftheseeffortswillbe workingwiththeNationalClimateChangeAdaptationResearchFacilitytoimplement improvements,theresultofamidtermoperationalreview.Theaimistoensurethat researchtargetshighpriorityknowledgegapsfordecisionmakersthroughoutAustralia. Tobuildcapacityforadaptationinthecoastalzone,thedepartmentwillmakeavailable mapsshowingmajorurbanareasatriskofinundationfromsealevelrisesunderseveral climatechangescenarios.Thisinitiativewillrespondtowidespreaddemandforbetter informationonthedistributionofrisks.Tofurtherinformcoastalcommunitiesabout possibleadaptationapproaches,thedepartmentwillsupportseveralcoastaladaptation partnerships.Thepartnershipswillimproveunderstandingofthecostsandbenefitsof adaptationoptionsandthecosteffectivetimingofimplementation,andwillencourage informationsharing.

Climate change scienceIn201011,thedepartmentwillcontinuetoworkwithAustraliasChiefScientistand othermembersofthegovernmentsHighLevelCoordinationGrouptodeliveran implementationplanforthe2009NationalClimateChangeScienceFramework.The frameworkidentifiesnationalclimatechangescienceprioritiesforthecomingdecadeand setsoutwaystoharnessAustraliassciencecapacity.Theframeworkwillenablebetter deliveryofscienceinformationtogovernmentanddecisionmakers. ThedepartmentwillalsoassistinthecoordinationoftheFourthLeadAuthormeetingfor theIntergovernmentalPanelonClimateChangespecialreportonmanagingtherisksof extremeeventsanddisasterstoadvanceclimatechangeadaptation.Themeetingwillbe hostedbytheNationalClimateChangeAdaptationResearchFacilityontheGoldCoast inQueensland.Thereportwillbethefirstglobalscientificefforttoexaminethelinkages betweendisasterriskreductionandadaptationtoclimatechange.


Helping to shape a global climate change solutionThedepartmentsinternationaleffortsin201011willfocusonbroadbasedinternational climateactionthatcansupportorleadtoglobalagreement. AspartoftheUNFCCCprocess,Australiawillcontinuetoworkwithothercountries towardsastrongoutcomeattheConferenceofPartiesinMexicoattheendof2010.Ifthe conferenceimplementskeyaspectsoftheBalimandateandoperationalisestheprovisions oftheCopenhagenAccord,itwillbeapositivesteptowardsalongerterm,comprehensive climateregimethatincludesadurable,environmentallyeffectiveandlegallybinding outcomeundertheFrameworkConvention. Australiawilllooktobringforwardinternationalactiononkeyelementsparticularly wherewecandemonstratethebenefitofclimateactionandwherethisactioncanbuild confidence.Demonstratingthebenefitsofactingtoreduceemissionsinwaysthatcontinue todeliverstrongdomesticgrowthwillreinforcethattheglobalcommunitycanputinplace arrangementsthatprovidebenefitstoallparticipants.Thistypeofactionwillbepursued inanumberofways,includingthroughtheUNFCCC,theMajorEconomiesForumon EnergyandClimate,theGroupofTwenty(G20),andtheCartagenaGroupofcountries. TheAustralianGovernmentsworktoreduceemissionsfromdeforestationandforest degradationindevelopingcountriesisanexampleofhowthisapproachcandelivera mutuallybeneficialoutcome. ThedepartmentsupportstheHonBobMcMullansparticipation,inhispersonalcapacity, intheUNSecretaryGeneralsHighlevelAdvisoryGrouponClimateChangeFinancing. ThedepartmenthasprovidedMrMcMullanwithanalyticalsupportandhasactedon hisbehalfinworkinggroupmeetings.Theadvisorygroupsconclusionsonsourcesof financingtomeettheCopenhagenAccordgoalofmobilisingUS$100billionperyearby 2020willassistpolicymakerstodevelopfeasibleapproachestomeetthechallengeina mannerconsistentwithAustraliasnationalinterests. Thedepartmentwillcontinuetodeliverpracticaloutcomesonclimatechangethrough bilateralpartnershipswithChina,NewZealand,SouthAfrica,theUSA,theUnited Kingdom,JapanandtheEuropeanUnion.Australiawillcontinuetohelpvulnerable developingcountriesmeethighpriorityclimatechangeadaptationneedsthroughthe InternationalClimateChangeAdaptationInitiative.

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Section 2

Overview

Section 2: Overview

Portfolio overview Departmental overviewOrganisationalchange Organisationalstructure Executivemanagement Outcomeandprogramframework

34 3538 44 50 53

How we will report

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Figure 1 Climate Change and Energy Efficiency Portfolio structure, at 30 June 2010Minister for Climate Change, Energy Efficiency and Water Senator the Hon Penny Wong Minister Assisting the Minister for Climate Change and Energy Efficiency The Hon Greg Combet, AM, MP

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Department of Climate Change Portfolio Secretary Dr Martin ParkinsonOutcome 1 Reduction of Australias greenhouse gas emissions, adaptation to the impacts of climate change, and negotiation of an effective global solution, through the development and implementation of a national response to climate change; and bilateral, regional and multilateral engagement internationally

Office of the Renewable Energy Regulator Renewable Energy Regulator Mr Andrew LivingstonOutcome 1 Administer and regulate the national Renewable Energy Target scheme to encourage increased renewable electricity generation

Section 2:Overview

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Portfolio overview

TheDepartmentofClimateChangeandEnergyEfficiencywascreatedasastandalone portfolioagencyfollowingmachineryofgovernmentchangesannouncedbyPrimeMinister RuddandapprovedbytheGovernorGeneralon8March2010.Thedepartmentisthelead agencyintheAustralianGovernmentsresponsetoclimatechangeandisanactiveand constructiveparticipantininternationalclimatechangenegotiations. TheDepartmentofClimateChangeandEnergyEfficiencyisadepartmentofstate staffed under the Public Service Act 1999andaprescribedagencyundertheFinancial Management and Accountability Act 1997(FMAAct).Effective14September2010,the Minister responsible for the department is the Hon Greg Combet, AM, MP, the Minister forClimateChangeandEnergyEfficiency.TheMinisterisassistedbytheParliamentary SecretaryforClimateChangeandEnergyEfficiency,MarkDreyfus,MP.Inthe200910 reporting period, the Minister responsible for the portfolio department was Senator the HonPennyWong. ThedepartmentisresponsiblefortheoversightoftheOfficeoftheRenewableEnergy RegulatorandtheAustralianCarbonTrustLimited. TheOfficeoftheRenewableEnergyRegulatorisresponsibleforimplementingthe governments20percentrenewableenergytarget,whichistobeachievedby2020.The OfficeoftheRenewableEnergyRegulatorisastatutoryandprescribedagencyoperating under the Renewable Energy (Electricity) Act 2000. TheAustralianCarbonTrustLimitedisresponsibleforprovidinginformationandtoolsfor householdsandbusinessestoparticipateeffectivelyinAustraliasclimatechangeresponse. TheAustralianCarbonTrustLimitedwillmanagetheEnergyEfficiencyTrust. Thisannualreportcoverstheperformance,accountabilityandfinancialreportingofthe DepartmentofClimateChangeandEnergyEfficiency.TheOfficeoftheRenewableEnergy Regulatorisrequiredtopublishitsownannualreportasaprescribedagencyunderthe FMAAct. On14January2010theAustralianCarbonTrustLimitedwasregisteredasapublic companylimitedbyguarantee.TheAustralianCarbonTrustLimitedisaCommonwealth authorityandisrequiredtoprepareitsownannualreportinaccordancewiththe guidelines set out in the Commonwealth Authorities and Companies Act 1997.


Departmental overviewTheDepartmentofClimateChangeandEnergyEfficiencyleadsthedevelopmentand coordinationofAustraliasclimatechangeandenergyefficiencypolicyandisresponsible forpolicyadvice,policyimplementation,programdeliveryandregulatoryoversightin four areas: reducingAustraliasgreenhousegasemissions improvingAustraliasenergyefficiency adaptingtoclimatechange helpingtoshapeaglobalclimatechangesolution. ThosefourareasarecloselyalignedtothethreepillarsoftheAustralianGovernments climatechangepolicy;namely,mitigation,adaptationandinternational,asillustratedin Figure2. Underthemitigationpillar,thegovernmenthasbeendevelopingandimplementing arangeofdomesticpoliciesandmeasurestodeliverandreportagainstAustralias greenhousegasemissionsreductiontargets: acceleratingthedevelopmentanddeploymentofrenewableenergytechnologiesto deliverthelegislatedtargetof20percentrenewableenergyinAustraliaselectricity generation by 2020 buildingbroadcommunityconsensustocapAustraliasemissionsandtopricecarbon pollutionwiththeintroductionofanemissionstradingscheme promotingandimprovingenergyefficiencytosupportthesmoothtransitionofthe economytosupportafuturepriceoncarbonandtoencouragepracticalhousehold, communityandbusinessactiononclimatechange effectivelymeasuring,monitoring,reportingandprojectingcurrentand futureemissions. Undertheadaptationpillar,thegovernmenthasdevelopedawholeofgovernmentpolicy frameworkforclimatechangeadaptationandisbuildingcapacitytoadapttotheimpacts ofclimatechangethroughresearchinitiativesandriskassessments. Inpursuitofourinternationalagenda,thegovernmentisinfluencingthedevelopmentof internationalpoliciesandmeasuresinrelationtoclimatechangetowardsbroadbased internationalclimateactionandagreement. Aspartofitsresponsibilityforpolicydevelopmentandadviceonclimatechangeissues, thedepartmentworkscloselywithothergovernmentdepartments,stateandterritory agencies,andcorrespondinggovernmentbodiesinothercountries.Italsoliaisesclosely withindustry,business,environmentandcommunitygroups.

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Section 2:Overview

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Figure 2 The three pillars of Australias climate change policy

Transforming Australias economy and society

Capping emissions and establishing a price on carbon pollutionthrough the Carbon Pollution Reduction Scheme

Mitigation

Renewable energy technologies Energy efficiency measures

Commonwealth policy and program responsesAdaptation

Science, research and information Leading national reform

Multilateral negotiationincluding the UNFCCC and Copenhagen Accord International

Regional and bilateral partnerships Policy, analysis and legalincluding targets, finance, and measurement, reporting and verification


VisionThedepartmentsvisionistoimproveAustraliaswellbeingbycontributingtoeffective nationalandglobalresponsestoclimatechange,includingthenecessarytransformation oftheAustralianeconomy.

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MissionThedepartmentsmissionistosupportgovernmentindevelopingamoreprosperousand sustainableAustraliabyleadingandcoordinatingthemitigationofgreenhouseemissions, promotionofenergyefficiency,adaptationtoclimatechange,andshapingofglobal solutions, through: advicetothegovernmentthatisofthehighestquality,isintegrated,objectiveand well informed ensuringqualityoutcomesthrougheffectivedesignanddeliveryofprograms,services, and regulatory administration buildingimprovedunderstandingofclimatechangerisks,opportunities,andresponses effectiveengagementandcommunicationwiththeAustralianpublicandstakeholders.

ValuesThedepartmentsemployeesexemplifytheAustralianPublicServiceValuesandCodeof Conductandthebehavioursofahighperformanceworkforce,whichinclude: ethicalbehaviour accountability honesty respectforothers opencommunication commitment teamwork.

PeopleAhighlyprofessionalandcommittedworkforceisfundamentaltothedeliveryofourvision andmission.Wearecommittedtorecruitingandretainingexcellentpeoplethrough: ongoingdevelopment encouragingflexible,healthyandsafeworkpractices competitiverewardsandrecognition encouragingandsupportinginnovationandcontinuousimprovement providingaproductiveandsupportiveworkingenvironment.

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2 Organisational change

Inearly2010,twogovernmentannouncementshadamajorimpactonthedepartments workforceandbusinessoperations.Theywerethemachineryofgovernmentchanges thatcameintoeffecton8March2010,whichledtotheestablishmentofanewportfolio, theDepartmentofClimateChangeandEnergyEfficiency,andthegovernments announcementon27April2010todelaytheimplementationoftheCarbonPollution ReductionScheme(CPRS).

Machinery of government changesThemachineryofgovernmentchangesformalisedthroughtheAdministrative ArrangementsOrderon8March2010weredesignedtoachievestrongercoordinationand greaterefficiencyinthedevelopmentanddeliveryofclimatechangepoliciesandprograms, especiallyinrelationtoenergyefficiencyandrenewableenergy. The responsibilities transferred to the new Department of Climate Change and Energy EfficiencyfromtheDepartmentoftheEnvironment,Water,HeritageandtheArts (DEWHA)undertheAdministrativeArrangementsOrderwere: renewable energy programs energyefficiency greenhouse gas abatement programs communityandhouseholdclimateaction. Amongstthefunctionsthatweretransferredtothedepartmentweredeliveryofthe NationalEnergyEfficiencyInitiativeSmart Grid, Smart City;theSolarCitiesProgram; theRenewableRemotePowerGenerationProgram;EnergyEfficiencyinGovernment Operations;andtheLivingGreenerwebsite. ElementsoftheCouncilofAustralianGovernmentsNationalStrategyonEnergyEfficiency thatweretransferredtothedepartmentincluded: enhancedenergyefficiencylabelling expansionofminimumperformancestandardsforappliancesandequipment theHeating,VentilationandAirConditioningHighEfficiencySystemsStrategy theEquipmentandApplianceEnergyEfficiencyProgram enhancedstandardsforbuildingenergyefficiency(residentialandcommercial)and mandatorydisclosureofstandards greenhouse and energy minimum standards legislation


appliancelabelling phaseoutofinefficientincandescentlighting phaseoutofinefficienthotwatersystems. Approximately411staffassociatedwiththoseactivitiesinDEWHAwereformally transferredtotheDepartmentofClimateChangeandEnergyEfficiencythrougha section72processunderthePublic Service Act 1999. Atthetime,thedepartmentmovedquicklytoestablishadedicatedintegrationteamto ensurethatthenecessarymechanismswereinplacetoeffectasmoothtransitionofstaff andfunctionstothenewdepartment,andthesafe,effectivedeliveryofthegovernments energyefficiencyprograms.Thedepartmentquicklycommencedworkonaddressing issuesraisedinMinisterCombetsministerialstatementof10March2010,inparticular addressingsafetyconcernsregardingtheHomeInsulationProgram.

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Delay of the CPRSOn27April2010,thegovernmentannouncedthatitwouldnotintroducetheCPRSuntil aftertheendofthecurrentcommitmentperiodoftheKyotoProtocolandthatitwould introduceitonlywhentherewasgreaterclarityontheactionsofothermajoreconomies, includingtheUSA,ChinaandIndia.Asaresult,thegovernmentannounceditwouldnot movetolegislatetheCPRSbeforetheendof2012,andtheestablishmentoftheAustralian ClimateChangeRegulatoryAuthority(ACCRA)wouldbedelayed. Aftertheannouncement,thedepartmentrevieweditsmitigationpolicyadvicefunctions andrestructuredtoprovideadviceonmitigationpolicyandtofocusondomestic mitigationstrategy,internationalcarbonmarketsandlandbasedabatement.Fromthe period27Aprilto30June2010,theEmissionsTradingDivisiondocumenteditsworkon theCPRS,completedemissionsintensivetradeexposedassessmentstoprovideeligible industrieswithpartialexemptionsundertheRenewableEnergyTarget(RET),andadvised onnonCPRSclimatechangemitigationpolicy.At30June2010,theEmissionsTrading Divisionceasedtoexistanditsmitigationpolicyfunctionsweredividedbetweentwonew divisions:theClimateStrategyandMarketsDivisionandtheLandDivision.TheLand DivisionalsoincludesAustraliasNationalCarbonAccountingSystemandtheNational GreenhouseAccountsandadministerstheNationalCarbonOffsetStandard. TheACCRAGroupwassetupon29June2009toestablishACCRA.Theauthoritywasto be responsible for implementing and administering the CPRS, the National Greenhouse and Energy Reporting Act 2007(NGERAct)andtheRenewable Energy (Electricity) Act 2000.

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Followingthegovernmentsannouncementon27April2010,thegroupwasdisbanded witheffectfrom30June2010.Itsongoingelementsarenowincorporatedinanumber oftheworkunitsofthedepartmentandoftheOfficeoftheRenewableEnergyRegulator. SomeoftheprojectssupportingtheimplementationoftheCPRSandintegrationof existinglegislationwerediscontinued. Againstthebackdropofthegovernmentspolicyandadministrativedecisions,the departmentisundergoingasignificanttransition.TheSecretaryhasestablishedachange managementtaskforcetoeffectthedepartmentstransitiontoanintegrated,high performingorganisationthatmeetstheexpectationsofgovernment.Thetaskforcewill takeintoaccountreportsfromexternaladvisers,staffandstakeholderstodeviseacultural andbusinesstransformationprogram.Theprogramwillbeamajorareaoffocusforthe departmentin201011. Intheshorttermthegovernmentwillboostexistinginvestmentsincleanandrenewable energyandsupportgreaterenergyefficiencymeasuresinordertoreducegreenhouse gasemissions.Thatmeansafasterandmoreacceleratedinvestmentinrenewablesand renewableenergytechnologytohelpAustraliameetitsemissionsreductiontargets.During thebudgetandforwardyears,thedepartmentwillcontinuetobeattheforefrontofthe governmentsresponsetoclimatechange.


Feature: Hawke Review of the Home Insulation Feature: and Faulkner Inquiry into the Green Program Loans ProgramDuringthefinancialyeartherewereanumberofreviewsofdepartmentalactivitieswhichprovided valuablelessonsforthedepartment.Ofparticularnotearetworeviewsoriginallycommissioned intheEnvironment,Water,HeritageandtheArtsPortfoliotheHawkeReviewoftheHome InsulationProgramandtheFaulknerInquiryintotheGreenLoansProgram.Bothreportshavebeen releasedpublicly. TheHawkeReviewoftheHomeInsulationProgramreportedtothesecretariesofthedepartment andDEWHAontheeffectivenessoftheprogramdesign,administrationanddeliveryarrangements thatwereinplacefortheHomeInsulationProgram.TheFaulknerInquiryreportedtotheMinister andtheSecretaryontheprobityofthecontractualarrangementsandprocurementprocessesand decisionsthatformedpartofthefinaldesignandimplementationoftheGreenLoansProgram. WhiletheHawkeReportandtheFaulknerInquirywereverydifferent,theybothhaveimportant lessonsforthedepartment.

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Key findingsTheHawkeReviewandtheFaulknerInquiryhighlightedanumberofelementsofthedepartments programdeliverywhichledtounintendedconsequencesfortheprograms: leadershipandgovernancewerenotappropriateforthelevelofrisk program design, planning and management were not of the quality required weaknesseswereevidentinthecultureoftheorganisation risk,auditandcomplianceactivitieswerenotconductedappropriatelyand,inparticular,werenot alignedwiththeimplementationaspectsoftheprogram resources,staffandbusinesssystemswerenotadequate.

How the department will respondThedepartmentiscommittedtoaddressingtheshortcomingsidentifiedinthosereportsandwill: promotestrongleadership,andsupportthisbystrengtheninggovernanceframeworks apply robust program design, planning and management supportaculturethatpromotesfiscalresponsibility,prudenceandprobity applyappropriateframeworksforauditandcomplianceandimplementthoseatthestartof programdelivery investinthedepartmentsresources,ensuringthatstaffarewelltrainedandsupportedandthat informationtechnologyiswelldesigned,scalableandflexible. Atapracticallevelthedepartmentwillachievethisbytakingactionsinthefollowingareas: improvinggovernance strengthening the skills of our program managers improvingbusinessplatformsandsystems implementingachangemanagementtaskforce. ThedepartmentiscommittedtoanindependentreviewofitsresponsebetweenJuneand December2011.TheAuditCommitteewillmonitortheinternalactionplantodeliverthis responsebetweennowandtheconductoftheindependentreview.

Section 2:Overview

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Feature: Setting up a regulatory authoritythe Australian Climate Change Regulatory Authority modelEstablishingtheAustralianClimateChangeRegulatoryAuthority(ACCRA)wasasignificant undertakingintherelativelynewareaofclimatechangeregulation.ACCRAwasintended tohaveadministrativeoversightoftheNationalGreenhouseandEnergyReportingSystem, theRenewableEnergyTarget,andtheCarbonPollutionReductionScheme(CPRS),akey strategyforreducinggreenhousegasemissionsandmeetingAustraliascommitmenttothe KyotoProtocol.ACCRAwasneverformallyestablishedduetothegovernmentsdecisionon 27April2010todelaytheimplementationoftheCPRS;however,muchoftheworknecessaryto setuptheorganisationhadalreadybeenundertakenbythattime. AlthoughACCRAdidnoteventuate,theACCRAestablishmentprocess,whichwasanintensive andwelldocumentedone,willprovideatemplateforACCRAspossibleestablishmentwhen thereisaneedbasedongovernmentpolicyandforothergovernmentdepartmentssettingup regulatoryagencies. AsummaryoftheACCRAregulatoryframework,establishmentstrategiesandgovernance processesissetoutbelow.

The modelACCRA regulatory frameworkTheACCRAregulatoryframework,developedearlyintheestablishmentprocess,andbasedon thebestpracticecomplianceapproachesintheANAOBetterPracticeGuide,Administering Regulation,underpinnedallsubsequentstrategies,plansandprocesses.

ACCRA establishment strategyTheACCRAestablishmentstrategysetoutthevision,missionandobjectivesofACCRA.Itset out the strategy for establishing ACCRA as a single, fully integrated regulator, as required by the draftlegislation.Italsospecifiedtheobjectivesoftheestablishmentprocessandtheprinciples thatshouldunderpintheapproachtoplanningandbuildingACCRA.


ACCRA establishment blueprintTheACCRAestablishmentblueprintwasthehighlevelstatementofwhatACCRAwouldbe, whatitwoulddo,andhowitwoulddoit.Theblueprintnotonlyhighlightedthecapability requiredforACCRAtoperformitsfunctionsandobligationsbutalsosetoutthetimelineand keylegislativemilestonesinvolved.

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Governance bodiesThe ACCRA Establishment Integration Authority was set up to ensure that the ACCRA Group hadprocessesandproceduresinplacetoimplementtheCPRSonceACCRAwasformally established.ItwasintendedthattheintegrationauthoritywouldbecomepartofACCRAs governancestructurewhentheenablinglegislationwaspassed. TheProgramManagementOfficewasestablishedtohelpbuildACCRAsorganisational capability,including,forexample,tosupportgovernanceatprogramandprojectlevelsandto developanorganisationalcultureofcontinualimprovementandonethathadtheflexibilityand responsivenesstomeettheregulatorsrequirements.

The outcomeTheACCRAprogramwasclosedon30June2010anditsmaterialstoredsothatrelevant informationwouldbeavailableforfutureuse.Materialsrelatedtotheclosureoftheproject wereconsolidatedintoasingleprogramclosurereportandalldocumentsfordiscontinued projectswerecompletedandclosedinaccordancewiththemodellingconventionsforthe ACCRAestablishmentprogram. TheIntegrationAuthoritymonitoredtheclosureoftheACCRAprogrambywindingdown allactivities,documentingprocessesandhistoriesandsigningoffclosuredocuments.The authorityceasedoperationsinaccordancewithitstermsofreferenceatitsfinalmeetingon 29June2010.

Section 2:Overview

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2 Organisational structureFigure3showsthedepartmentsorganisationalstructureafterthemachineryof governmentchangesof8March,whenthenewDepartmentofClimateChangeandEnergy Efficiencywascreated. Figure4showstheorganisationalstructurethatwasformallyimplementedon1July2010. Thestructuresupportsthedepartmentsroleinthedeliveryofabroaderrangeoffunctions andresponsibilitiesthanhadpreviouslybeenthecase. Thedepartmentsdivisionsandtheirrolesin200910areasfollows.

Emissions Trading DivisionTheEmissionsTradingDivisionwasestablishedtoundertakethewholeofgovernment developmentandimplementationofAustraliasCPRS.Followingthegovernments announcementtodelaytheimplementationoftheCPRS,thedivisionsworkprogram changed.From27Aprilto30June2010,thedivisionwasresponsiblefordocumenting workontheCPRS;completingemissionsintensivetradeexposedassessmentsinorderto provideeligibleindustrieswithpartialexemptionsfromtheRET;andadvisingonclimate changemitigationpolicy.

Adaptation, Land and Communications DivisionTheAdaptation,LandandCommunicationsDivisionisresponsiblefordeveloping andimplementingclimatechangeadaptationandlandmanagementstrategiesand coordinatingclimatechangescienceactivities.Thedivisionisalsoresponsiblefor departmentwidecommunicationsandpublicaffairsactivities.

International DivisionInternationalDivisionisresponsiblefordevelopingandimplementingAustralias internationalclimatechangepolicy.Thedivisionsworkfallsintothreebroadcategories: analysisandpolicyadvice,internationalnegotiationsandregionalandbilateral engagement.ThedivisionprovidesstrategicpolicyadviceonAustraliasapproachto internationalclimatechangeissues,suchasmitigation,carbonmarketsandfinancing, andreducingemissionsfromdeforestationandforestdegradationindevelopingcountries (REDD+).ItleadsAustraliasparticipationininternationalclimatechangenegotiations, includingundertheUnitedNationsFrameworkConventiononClimateChangeand theKyotoProtocol.ItalsoleadsbilateralengagementonREDD+andadaptation,and implementsbilateralpartnershipswithcountriesincludingChina,theUSA,Indonesiaand Pacificislandcountries.


Strategies and Coordination DivisionTheStrategiesandCoordinationDivisionplayedacentralroleincoordinatingand implementingclimatechangepolicyacrossthedepartmentandAustralianGovernment agencies.Thedivisionledpolicyworkoncomplementarymeasures,includingby engagingthestatesandterritories.ItledworkonlegislationfortheexpandedRET, onvoluntaryaction,onenergyefficiencypolicyandimplementation,includingforthe National Carbon Offset Standard and the Australian Carbon Trust Limited, and on the designandimplementationoftheClimateChangeActionFund.Thedivisionalsoled greenhouseemissionsreportingbyprovidingpolicysupportfortheNationalGreenhouse andEnergyReportingSystemlegislativeframeworkandpreparingtheannualNational GreenhouseAccounts.

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Renewables and Energy Efficiency DivisionWorkinginpartnershipwithgovernments,schools,industry,thecommunityand households,theRenewablesandEnergyEfficiencyDivisionfocusesonthedelivery ofenhancedregulatoryframeworksforappliancesandbuildings,onresearchand demonstrationprojects,andonpolicydevelopment.

Demand Driven Programs DivisionTheDemandDrivenProgramsDivisiondesignsandadministerspoliciesandprograms thatsupporthouseholdsandcommunitygroupstakingpracticalactiontoimproveenergy efficiencyandincreasetheiruseofrenewableenergy.ThoseprogramsincludetheGreen LoansProgramandGreenStartprogram;theRenewableEnergyBonusSchemeSolar HotWaterRebate;theSolarHomesandCommunitiesPlan;andtheNationalSolar SchoolsProgram.

Home Insulation Program Review OfficeTheHomeInsulationProgramReviewOfficewasestablishedinFebruary2010tomanage theclosureoftheHomeInsulationProgram,mitigatetherisksassociatedwiththework carriedoutundertheHomeInsulationProgramandprovidetransitionalassistancetothe insulationindustry.

Greenhouse and Energy Reporting DivisionTheGreenhouseandEnergyReportingDivisionsupportstheGreenhouseEnergyData OfficerintheadministrationoftheNGERAct.TheNGERActprovidesasinglenational reportingframeworkforreportinganddisseminatinginformationrelatedtocorporations greenhousegasemissions,greenhousegasprojects,andenergyconsumptionandenergy

Section 2:Overview

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production.Thedivisionisresponsiblefordevelopingandimplementingcapabilitiesfor registrationandreportingactivities,datamanagement,compliancemonitoring,audit registration,auditmanagement,stakeholderengagement,publishingdata,anddisclosing datatoothergovernmentagencies.

Stakeholder Support and Engagement DivisionTheStakeholderSupportandEngagementDivisionwasestablishedinJanuary2010to supportandeducatetheregulatedcommunitytovoluntarilycomplywithlegislation. Thedivisionwasresponsibleforstakeholderengagementandeducation,compliance monitoringandinvestigations,andauditormanagementforexistingnationalgreenhouse andenergyreportinglegislationandfordevelopingthesecapabilitiesforfuturelegislation, includingfortheproposedCPRS. FollowingthedelayoftheCPRS,staffandfunctionsfromtheStakeholderSupportand EngagementDivisionweretransferredtotheDataReportingandRegistrationDivision, whichwasrenamedtheGreenhouseandEnergyReportingDivisionon1July2010 (seeabove).

ACCRA Establishment and CPRS Implementation DivisionTheACCRAEstablishmentandCPRSImplementationDivisionwasresponsiblefor implementingtheCPRSlegislationandcombiningthiswiththefunctionsofthe GreenhouseandEnergyDataOfficerandtheRenewableEnergyRegulator.Thedivision wasalsoresponsiblefordevelopingACCRAsregulatorypolicies,CPRSprocedures, businessarchitectureandprocesses,informationandcommunicationstechnology(ICT) systemsandgovernanceprocesses. FollowingthedelayoftheCPRS,somefunctionsfromtheACCRAEstablishmentandCPRS ImplementationDivisionwerewoundupandothersweretransferredtothenewlyformed GovernanceandProgramSupportDivisionandtheCorporateSupportDivision.Staff eithermovedwiththeirfunctionorwereredeployedacrossthedepartment. Corporate,governanceandprogramsupportservicesareprovidedbytheGovernanceand ProgramSupportDivisionandtheCorporateSupportDivision.

Governance and Program Support DivisionThemachineryofgovernmentchangesinearly2010allocatedmajornewprogram functionstothedepartmentsexistingpolicyandregulatoryresponsibilities.The GovernanceandProgramSupportDivisionsupportsthedepartmentwithadviceand toolsforbestpracticeprogramdesignandmanagement;effectiveriskanalysis,planning


andmanagementprocesses;andlegalsupportandadviceunderpinningpolicyand programdesignanddelivery.Thedivisionprovidessupportthroughthedevelopment andimplementationofrobustgovernancemechanismstosupportdecisionmakingacross theorganisation,andthroughfraudinvestigationsandtheirmanagementwithrelated agencies(suchastheAustralianFederalPolice).Additionallythedivisionprovidessupport forministersandthedepartmentsExecutive,includingbymanaginginformationflows (providingadvice,briefings,QuestionTimebriefsandotherparliamentarysupport).

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Corporate Support DivisionTheCorporateSupportDivision,whichwasknownastheCorporateandGovernance Divisionbeforethemachineryofgovernmentchangesof8March,hasresponsibilitiesfor servicedeliveryacrossthefunctionalareasofhumanresources,finance,ICTandbusiness servicesaswellastheassociatedpoliciesandpracticesthatunderpinthoseservicesthat buildandsustainthedepartmentscapabilities. ThedivisionwaselevatedfrombranchstatusinNovember2009,inlinewiththe departmentsgrowthandincreasingneeds.

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Figure 3 Top management structure following machinery of government changes on 8 March 2010Martin Parkinson

Secretary

Deputy SecretaryMartin Bowles Geoff Leeper

Blair Comley

Malcolm Thompson

Deputy Secretary

Deputy Secretary

Deputy Secretary

Emissions Trading Division First Assistant Secretary Barry Sterland Data Reporting and Registration Division First Assistant Secretary David Rossiter

Renewables and Energy Division First Assistant Secretary Clare Walsh (Acting)

Home Insulation Program Review Division First Assistant Secretary Bernadette Welch (Acting) Renewable Energy Bonus Scheme First Assistant Secretary Cathy Skippington ACCRA Establishment and CPRS Implementation Division First Assistant Secretary Natalie Howson

Corporate and Governance Division First Assistant Secretary Penny Weir

48DepartmentofClimateChangeandEnergyEfficiency200910 Annual ReportGroup Systems and Support First Assistant Secretary Ian Williams Stakeholder Support and Engagement Division First Assistant Secretary Natalie Howson Strategies and Coordination Division First Assistant Secretary Shayleen Thompson

Adaptation, Land and Communications Division First Assistant Secretary Ian Carruthers

Demand Driven Programs Division First Assistant Secretary Alex Rankin

International Division First Assistant Secretary Louise Hand Chief Adviser Harinder Sidhu

Prime Ministers Task Group on Energy Efficiency Secretariat Howard Bamsey Head of Secretariat Ross Carter Bridget Brill

Figure 4 Top management structure at 1 July 2010Martin Parkinson

Secretary

Adaptation, Greenhouse Reporting and Governance Group Frameworks GroupDeputy Secretary Blair Comley Deputy Secretary Martin Bowles

Deputy Secretary Geoff Leeper

Deputy Secretary Malcolm Thompson

Energy Efficiency Group

Home Insulation Group

Governance and Program Support Division First Assistant Secretary Bernadette Welch (Acting) Land Division First Assistant Secretary Shayleen Thompson Home Insulation Program Review Division First Assistant Secretary Andrew Bailey Climate Strategy and Markets Division First Assistant Secretary Jenny Wilkinson (Acting)

Renewables and Energy Efficiency Division First Assistant Secretary Clare Walsh (Acting)

Corporate Support Division First Assistant Secretary Penny Weir

Change Management Task Force First Assistant Secretary Natalie Howson

Adaptation, Science and Communications Division First Assistant Secretary Ian Carruthers

Demand Driven Programs Division First Assistant Secretary Alex Rankin

Greenhouse and Energy Reporting Division First Assistant Secretary David Rossiter

International Division First Assistant Secretary Louise Hand Chief Adviser Harinder Sidhu

Prime Ministers Task Group on Energy Efficiency Head of Secretariat Howard Bamsey First Assistant Secretary Ross Carter Assistant Secretary Bridget Brill

Section 2:Overview

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2 Executive management

TheSecretaryofthedepartmentisDrMartinParkinson.Attheendof200910 DrParkinsonwassupportedbyfivedeputysecretaries:MrHowardBamsey,MrBlair Comley,MrGeoffLeeper,MrMalcolmThompsonandMrMartinBowles.

Secretary, Martin ParkinsonTheSecretaryisresponsibleforprovidingoverallleadership to the department: he determines the departments priorities, deliversorganisationalperformanceanddirectshigherpriority initiatives.Inconsultationwiththedeputysecretaries,the Secretaryisresponsibleforoverseeingcorporategovernance andresourceallocationsandprovidingstrategicdirection.The SecretaryisaccountabletotheMinisterforClimateChangeand EnergyEfficiency. DrParkinsonwasappointedasSecretarywhentheDepartment ofClimateChangewasestablishedon3December2007.DrParkinsonsappointment followedsixyearsasExecutiveDirector(DeputySecretary)intheDepartmentofthe Treasury,withresponsibilityfordomesticandinternationalmacroeconomicissues, andasDeputySecretaryoftheClimateChangeGroupintheDepartmentofthePrime MinisterandCabinet,withresponsibilityforleadingandcoordinatingimplementation oftheemissionstradingschemeandcoordinatingclimatechangepolicy.Hehasalso workedattheInternationalMonetaryFundonissuesrelatingtothereformoftheglobal financialsystem.

Deputy Secretary, Howard BamseyHowardBamseyisaDeputySecretaryinthedepartmentand AustraliasSpecialEnvoyonClimateChange.Inthelaterpartof 200910,heledtheSecretariattothePrimeMinistersTaskGroup onEnergyEfficiency. Before joining the department, Mr Bamsey was head of the AustralianGreenhouseOffice,theformerAustralianGovernment agencywithresponsibilityforclimatechange.In2006and2007 hewascochairoftheUnitedNationsDialogueonLongterm CooperativeActiononClimateChange,whichlaunched negotiationsonlongtermcooperativeclimatechangeaction.


MrBamseyspentmorethan20yearsintheAustralianforeignservice.Heservedinthe mainUnitedNationscentresofNewYork,GenevaandViennaaswellasothercapitals. HispositionsincludedAmbassadortotheUnitedNationsinGenevaandAmbassadorfor theEnvironment.

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Deputy Secretary, Blair ComleyBlairComleyistheDeputySecretaryoftheFrameworksGroup. MrComleyhasexecutiveoversightfortheclimatechangestrategy andmarketinstruments,internationalclimatechangepolicy,and issuesrelatedtothelandsector. PreviouslyMrComleyheldarangeofseniorpositionsinthe Treasury,includingasGeneralManageroftheBusinessTax Division,IndirectTaxDivision,MacroeconomicPolicyDivision andDebtManagementReviewTeam.Healsorepresented AustraliaoneconomicmattersattheOECDforthreeyearsand wastheActingChiefExecutiveOfficeroftheAustralianOfficeofFinancialManagement withresponsibilityformanagingtheAustralianGovernmentsdebtandrelated derivativeportfolio.

Deputy Secretary, Geoff LeeperGeoffLeeperjoinedthedepartmentasDeputySecretaryofthe ACCRAGroupon29June2009.Heiscurrentlyresponsibleforthe Adaptation,ScienceandCommunicationsDivision;Greenhouse andEnergyReportingDivision;andGovernanceandProgram SupportDivision. Priortojoiningthedepartment,hewasDeputySecretaryofthe DepartmentofFamilies,Housing,CommunityServicesand IndigenousAffairs(200709)andtheDepartmentofHuman Services(200507)andDeputyChiefExecutiveOfficerofMedicare Australia(200105).

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Deputy Secretary, Malcolm ThompsonMalcolmThompsonjoinedthedepartmentwhenthemachineryof governmentchangestookeffecton8March2010.MrThompson istheDeputySecretaryoftheEnergyEfficiencyGroupand isresponsibleforrenewablesandenergyefficiencypolicy andprograms. Priortothemachineryofgovernmentchanges,MrThompson workedatDeputySecretaryandFirstAssistantSecretarylevelsin theDepartmentoftheEnvironment,Water,HeritageandtheArts (200710)andspentfouryearsonwaterpolicyattheNational Water Commission and in the Department of the Prime Minister and Cabinet helping to developandimplementthe2004NationalWaterInitiative(200307).

Deputy Secretary, Martin BowlesMartinBowlesjoinedthedepartmenton8March2010,whenthe machineryofgovernmentchangestookeffect.MrBowlesisthe DeputySecretaryoftheHomeInsulationGroupandiscurrently oversightingtherolloutoftheHomeInsulationSafetyPlanandthe closureoftheHomeInsulationProgram. From2006toMarch2010,MrBowleswasDeputySecretary DefenceSupportintheDepartmentofDefence.Beforejoining theAustralianPublicService,hewasaseniorexecutivein educationandhealthareasoftheNewSouthWalespublicsector (19952006).Priorto1995,heheldseniorcorporateservicesandgeneralmanagement positionsinQueensland.


Outcome and program framework

ThedepartmentcontributestothewellbeingofallAustraliansbydeliveringarangeof programsthatsupportthefollowingoutcome: Reduction of Australias greenhouse gas emissions, adaptation to the impacts of climate change, and negotiation of an effective global solution, through the development and implementation of a national response to climate change; and bilateral, regional and multilateral engagement internationally. Supportingthisoutcome,thedepartmenthasfourprograms.

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Program 1.1: Reducing Australias greenhouse gas emissionsTheProgram1.1objectiveistodevelopandimplementdomesticpoliciesandmeasures todeliverAustraliasgreenhousegasemissionsreductiontargets,includingalegislated targetof20percentrenewableenergyinAustraliaselectricitygenerationby2020; considerationoftheintroductionoftheCPRSaftertheKyotoProtocolcommitmentperiod (200812)andwhenthereissufficientinternationalaction;developinganintegratedsuite ofmeasurestoreducegreenhousegasemissions,promoteandimproveenergyefficiency, andacceleratethedevelopmentanddeploymentofrenewableenergytechnologies; anddevelopingeffectivemeasuring,monitoringandreportingsystemsforcurrentand futureemissions.

Program 1.2: Improving Australias energy efficiencyTheProgram1.2objectivesaretoworkinpartnershipswithgovernments,industry, schools,individualhouseholdsandthecommunitytodeliverimprovedenergyefficiency andgreateruseofrenewableenergy,aswellastoefficientlyandeffectivelyclosethe HomeInsulationProgram,manageongoingrisk,andmitigatestakeholderconcerns (includingthroughappropriategovernanceandreportingframeworks,andcomplianceand fraudprocesses).

Program 1.3: Adapting to climate changeTheProgram1.3objectiveistodevelopawholeofgovernmentpolicyframeworkfor climatechangeadaptationandtheadvancementofsciencebasedresearch.

Program 1.4: Helping to shape a global climate change solutionTheProgram1.4objectiveistoinfluencethedevelopmentofinternationalpoliciesand measuresinrelationtoclimatechangethroughthepursuitofbroadbasedinternational climateactionandagreement.

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Figure 5 Outcome and program structure at 30 June 2010Outcome 1Reduction of Australias greenhouse gas emissions, adaptation to the impacts of climate change, and negotiation of an effective global solution, through the development and implementation of a national response to climate change; and bilateral, regional and multilateral engagement internationally

Reducing Australias greenhouse gas emissions

Program 1.1

Improving Australias energy efficiency

Program 1.2

Adapting to climate change

Program 1.3

Helping to shape a global climate change solution

Program 1.4

Administered programsThedepartmentadministersanumberofprogramsonbehalfofthegovernment.

Program 1.1: Reducing Australias greenhouse gas emissionsThe Australian Carbon Trustwasestablishedtosupportactiononclimatechangeby businessesandhouseholds.Itwasestablishedtomanagetwoinitiatives: theEnergyEfficiencyTrust,whichprovides$101.2millioninseedfundingtopromote energyefficiencyinthebusinesssector theEnergyEfficiencySavingsPledgeFund,whichhasbeendeferred,pendingfuture decisionsontheCPRS. The Climate Change Action Fundwasdesignedtoprovidetargetedassistanceto businesses,communitysectororganisations,workers,regionsandcommunitiestohelp smooththetransitiontoalowemissionseconomy.Implementationofthefundhasbeen postponedaspartofthedeferraloftheCPRS. The Climate ChangeFoundation Campaignprovides$30millionforapublic educationandengagementprogram.Itwillbeinformedbymarketresearchand willprovideallAustralianswiththeopportunitytobetterunderstandtheissueof climatechange.

Program 1.2: Improving Australias energy efficiencyThe Green Loans Program helped Australian households identify better ways to saveenergyandwater,savemoneyonbills,andprotecttheenvironmentforthefuture byofferingfreehomesustainabilityassessmentstohouseholds.Thereplacement


Green Start programwillbedeliveredthroughtwoseparateroundsofcompetitive grantfunding.Roundonewillprovidegrantstoindividualsororganisationstodeliver onsiteenergyassessmentsforhouseholds.Roundtwowillassistlowincomeand disadvantagedhouseholdstoimprovetheirenergyefficiencyandreducehousehold energyexpenditure. Solar Citiesisapartnershipbetweenalllevelsofgovernment,industry,businessand localcommunitiestotrialsustainableenergysolutions. ThedemonstrationprojectNational Energy Efficiency InitiativeSmart Grid, Smart Citywilldeployalive,integrated,smartgridofcommercialsizeandscopeina communitywithinasingleelectricitydistributorsnetwork.Newcastlewillbethesiteof Australiasfirstcommercialscalesmartgrid. The Solar Homes and Communities Planhelpedover110,000Australianhomes andcommunityorganisationsreducetheirenergyuse,helptheenvironmentandsaveon energybillsbyprovidingrebatesofupto$8,000fortheinstallationofsolarphotovoltaic systems.WhileapplicationsforthisprogramclosedinJune2009,rebatesarestill beingprocessedaspreapprovedinstallationsarefinalised. The Renewable Remote Power Generation Programprovidesfinancialsupportto increasetheuseofrenewablegenerationinremotepartsofAustraliathatpresentlyrelyon fossilfuelsforelectricitysupply.Rebateswerepaidtohouseholds,communities,notfor profit,business,governmentandotherorganisations. The National Solar Schools Programassistsschoolstotakepracticalactiontotackle climatechangeandprovideeducationoutcomesbyprovidinggrantsofupto$50,000for eachschooltoinstallsolarpowersystemsandotherenergyandwatersavingmeasures. The Home Insulation Safety Programmitigatestherisksassociatedwithworkcarried outundertheHomeInsulationProgrambyprovidingatargeted,riskbasedprogramof inspectionsandrectifications.Theprogramwillcoveraminimumof150,000housesthat had non-foil insulation installed as well as anyone who rings the Safety Hotlines with concernsaboutthesafetyoftheirinstallation. The Foil Insulation Safety Programmitigatestherisksassociatedwithworkcarried outundertheHomeInsulationProgrambyprovidingforinspectionsofeveryhousethat hadfoilinsulationinstalledand,atthehouseholdersdiscretionontheadviceofalicensed electricalcontractor,installingasafetyswitchorremovingtheinsulation. The Insulation Industry Assistance Programwasdesignedtoprovidefinancial assistancetoreputablehomeceilinginsulationbusinessesforinventoryheldwhenthe HomeInsulationProgramwasterminated.Applicationsclosedon4June2010.

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The Renewable Energy Bonus SchemeSolar Hot Water Rebate assists householdstosavemoneyonpowerbillsandreducetheircarbonemissionsbyassisting eligiblehomeowners,landlordsortenantstoreplacetheirelectricstoragehotwater systemswithsolarorheatpumphotwatersystems. The Low Emissions Plan for Rentersprovidedfinancialassistancetolandlords (ortenantswithlandlordauthorisation)forinstallationofceilinginsulationinexisting rentalhomes.TheprogramwasincorporatedintotheEnergyEfficientHomesPackage, whichhasnowclosed.

Program 1.3: Adapting to climate changeThe Australian Climate Change Science Programaimstoimproveour understandingofthecauses,nature,timingandconsequencesofclimatechangesothat industry,communityandgovernmentdecisionsarebetterinformed. The Australian Centre for Climate Change Adaptation promotes and supports adaptationactioninthreekeyways:bydeliveringpublicgoodinformationforadaptation; bycontributingtonationaladaptationreforminprioritysectors,includingcoastsand infrastructure;andbyworkingacrossgovernmenttoembedadaptationinpolicy,programs andassetmanagement.

Program 1.4: Helping to shape a global climate change solutionInfluencing International Climate Change Policyprovidesspecialistadviceon internationalclimatechangearrangementsandonbuildingthecapacityofkeydeveloping countriestotakeeffectiveclimatechangeactionthroughbilateralpartnerships.

LegislationThe department administers the following legislation: National Greenhouse and Energy Reporting Act 2007 Renewable Energy (Electricity) Act 2000 Renewable Energy (Electricity) (Charge) Act 2000 Building Energy Efficiency Disclosure Act 2010.


How we will report

Thedepartmentsoutcomeandreportingframeworkwasrevisedfollowingthe AdministrativeArrangementsOrderof8March2010.Thenewframework,whichreflects theenergyefficiencyfunctionstransferredfromDEWHA,istheframeworkusedinthe departments201011PortfolioBudgetStatementsandunderwhichthedepartmenthas operatedsince8March. InaccordancewiththeRequirements for Annual Reports published by the Department ofthePrimeMinisterandCabinet,thedepartmentwillreportitsperformanceforthe 12monthperiodfromJuly2009toJune2010againsttherelevantprogramobjectives, deliverablesandkeyperformanceindicatorspublishedintheDepartmentofClimate Change200910PortfolioBudgetStatementsandtheDEWHA200910Portfolio BudgetStatements.

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Figure 6 Changes to outcome and program reporting200910 Portfolio Budget Statements Department of Climate Change Outcome 1: Reduction of Australias greenhouse gas emissions, adaptation to the impacts of climate change, and negotiation of an effective global solution, through the development and implementation of a national response to climate change, and bilateral, regional and multilateral engagement internationally. Program 1.1: Reducing Australias greenhouse gas emissions Program 1.2: Adapting to climate change Program 1.3: Helping to shape a global climate change solution 200910 Portfolio Budget Statements Department of the Environment, Water, Heritage and the Arts Outcome 2: Program 2.1: Energy efficiency and climate changea The outcome st

department of climate change and energy efficiency annual report 2009-10

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