Department of Climate Change and Energy Efficiency Annual Report 2009-10

Department of Climate Change and Energy Efficiency
2009–10 Annual Report
© Commonwealth of Australia 2010

ISSN 1838-3157
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More information about this report

Enquiries regarding this report may be directed to:
Assistant Secretary
Governance and Risk Frameworks Branch
Telephone: (02) 6159 7828
Fax: (02) 6159 7007
A copy of this document can be located on the department’s website at:
www.climatechange.gov.au/annualreport
Coordinated and edited by WordsWorth Writing
Design and typesetting by ZOO Advertising
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2 Department of Climate Change and Energy Efficiency 2009–10 Annual Report

3
Contents
Section 1: Secretary’s review 9

Secretary’s review 11
Major achievements in 2009–10 16
Outlook and priorities for 2010–11 24
Section 2: Overview 31
Portfolio overview 34
Departmental overview 35
How we will report 57
Section 3: Report on performance 59
Program 1.1: Reducing Australia’s greenhouse gas emissions 61
Program 1.2: Improving Australia’s energy efficiency 75
Program 1.3: Adapting to climate change 93
Program 1.4: Helping to shape a global climate change solution 101
Section 4: Management and accountability 113
Corporate governance 115
Internal audits 121
External scrutiny 123
Information technology 127
Management of human resources 128
Asset management 138
Purchasing and procurement 138
Consultancies 140
Section 5: Financial statements 143
Financial summary 145
Section 6: Other statutory reporting 215

Occupational health and safety 217
Freedom of information 218
Advertising and market research 221
Ecologically sustainable development 222
Grant programs 224
Corrections to the Department of Climate Change Annual Report 2008–09 224
Resource statements 225
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Section 7: References 229
Glossary and abbreviations 231
List of requirements 232
Subject index 236
Tables
Table 1 Program 1.1 performance 73
Table 5 Operative and paid inoperative staff, by classification and gender,
at 30 June 2010 131
Table 6 Senior Executive Service salary scales, 2009–10 132
Table 7 Collective agreement salary scales at 30 June 2010 133
Table 8 Staff profile by equal employment opportunity target group,
at 30 June 2010 134
Table 9 Commissions paid to advertising and market research agencies,
2009–10 221
Table 10 Environmental performance, 2009–10 223
Table 11 Agency Resource Statement, 2009–10 225
Table 12 Expenses and resources for Outcome 1 226
Figures
Figure 1 Climate Change and Energy Efficiency Portfolio structure,
at 30 June 2010 33
Figure 2 The three pillars of Australia’s climate change policy 36
Figure 3 Top management structure following machinery of government changes
on 8 March 2010 48
Figure 4 Top management structure at 1 July 2010 49
Figure 5 Outcome and program structure at 30 June 2010 54
Figure 6 Changes to outcome and program reporting 57
Figure 7 Governance committee structure 116

Introduction and guide to the report
This is the 2009–10 annual report of the Department of Climate Change and Energy
Efficiency, and the first annual report for the newly created department following the
machinery of government changes announced on 8 March 2010.
The department’s annual report outlines performance against the outcome and programs
in the 2009–10 portfolio budget statements and portfolio additional estimates statements
of the former Department of Climate Change and of the Department of the Environment,
Water, Heritage and the Arts.
Guide to the report

Section 1 of the report comprises the Secretary’s review for 2009–10, and includes the
department’s major achievements in 2009–10 and its focus in 2010–11.
Section 2 includes overviews of the portfolio and the department and describes the
department’s role, functions, organisational structure and the revised outcome and
program framework the newly created department will report against in this report.
Section 3 analyses the department’s performance against the department’s policy
outcomes and programs for the period 1 July 2009 to 30 June 2010.
Section 4 reports on management and accountability in the department.
Section 5 presents the audited financial statements of the department.
Section 6 includes other reporting as required under legislation and the June 2010
Requirements for annual reports for departments, executive agencies and FMA Act bodies.
Section 7 contains the glossary and abbreviations list, the list of requirements and the
subject index.
Other sources of information

The Department of Climate Change and Energy Efficiency releases information on its
activities through its website, publications, press releases, speeches and reports, including
the annual report. Copies of the department’s publications are available on its website at
www.climatechange.gov.au.
7
Section 1
Secretary’s review
Section 1: Secretary’s review
Secretary’s review 11
Major achievements in 2009–10 16
Reducing Australia’s greenhouse gas emissions 16
Improving Australia’s energy efficiency 19
Adapting to climate change 21
Helping to shape a global climate change solution 22
Outlook and priorities for 2010–11 24
Reducing Australia’s greenhouse gas emissions 24
Improving Australia’s energy efficiency 25
Adapting to climate change 27

Secretary’s review
1
The year to 30 June 2010 has been one of significant change and
development for the department, across almost all areas of
activity. In meeting the challenges brought by these changes,
staff in the department have demonstrated outstanding
professionalism, adaptability and a strong commitment to
delivering tangible outcomes in Australia’s efforts to deal with
climate change.
Two major changes dominated the year in terms of their impact
on the operations of the department. Firstly, on 8 March 2010,
Martin Parkinson, Secretary the department became a portfolio in its own right when the
former Department of Climate Change was combined with the
energy efficiency parts of the Department of the Environment, Water, Heritage and the
Arts, becoming the Department of Climate Change and Energy Efficiency. Significant effort
and focus by the senior management team was required to implement both the machinery
of government changes and remedial action on key programs such as the Home Insulation
Program and the Green Loans Program.
Secondly, further change came on 27 April 2010, when the former Prime Minister
announced the deferral of the Carbon Pollution Reduction Scheme (CPRS). The
department had worked very diligently throughout 2009–10 to support the design and
implementation of the CPRS, including through the preparation of legislation, analysis and
briefing, and consultation with industry and community stakeholders. The department
had also undertaken necessary preparations to establish the Australian Climate Change
Regulatory Authority, which would have administered the CPRS. With the deferral of the
CPRS, considerable effort was made to ensure that the lessons learned in recent years
would be easily accessible when the issue of carbon pricing was revisited.
The implementation of climate change mitigation programs continued throughout the
year. In January 2010, the department established the Australian Carbon Trust Limited,
a Commonwealth‑owned company that will support action by the private sector on
climate change.
The department continued its work on the expansion of the Renewable Energy Target
(RET) scheme, which aims to ensure that 20 per cent of Australia’s electricity supply is
generated from renewable sources by 2020. An agreement by the Council of Australian
Governments (COAG) came into effect in August 2009, creating a single national RET
scheme. Further policy and legislative work was undertaken to support government
decisions that will split the RET scheme into small‑scale and large‑scale components
effective from January 2011.
The department also conducted significant work on the challenges and opportunities
1 that climate change poses to Australian agriculture and forestry. Work began on a
comprehensive domestic offset program to complement the CPRS and the National
Carbon Offset Standard.
Work continued on the development and implementation of the emissions‑intensive
trade‑exposed (EITE) assistance program. In 2009–10, the department released 22 activity
definitions for data collection (taking the total to 40) and formally assessed a further
10 activities. As a result, 16 EITE activities were listed in the RET regulations as eligible to
receive partial exemptions in 2010.
Accurate measurement and reporting of greenhouse gas emissions and energy
consumption and production are the cornerstone of any effort to change patterns of
energy usage. During 2009–10, the first cycle of mandatory registration and reporting
under the National Greenhouse and Energy Reporting Act 2007 was completed. Over
700 corporations are now registered to report their emissions and energy consumption
and production. At the time of reporting, 95 per cent of corporations that were required to
report had done so for the 2008–09 financial year.
The transfer of energy efficiency responsibilities to the department in March 2010 brought
with it responsibility for two high‑profile programs. The Home Insulation Program
(HIP) was designed to improve the energy efficiency of Australian homes, as well as
generate economic stimulus and support jobs and small businesses. The tragic deaths
of four installers has been linked to the HIP. There are also ongoing concerns regarding
non‑compliance and fraud under the HIP. With the closure of HIP, the Home Insulation
Program Review Office was established in March 2010 to implement the Home Insulation
Safety Plan. Major safety programs have subsequently been launched, action is underway
to investigate possible fraud, and industry assistance measures have been delivered.
The Green Loans Program was launched on 1 July 2009 with the objective of encouraging
wide‑scale improvement of energy and water efficiency in existing homes and providing
financial assistance and sound advice to households on the most appropriate actions
to reduce the environmental impact of operating their home. There have been ongoing
concerns about the design and administration of this program. The unexpected level of
demand experienced in the first six months of the Green Loans Program led to a range
of problems in administration, including delays in waiting times for the Green Loans call
centre, payments to home sustainability assessors and delivery of home sustainability
reports to households. In the period since March 2010, the department has expanded
compliance activities, audit activity has commenced, outstanding home sustainability
assessment reports have been delivered and there is now a reduction in the delays of
payments to assessors.

The problems with HIP and Green Loans resulted in two major program reviews initiated
by the government. The Review of the Administration of the Home Insulation Program,
1
conducted by Dr Allan Hawke AC, was released on 6 April 2010. The report of the
Independent Inquiry into the Green Loans Program, conducted by Ms Patricia Faulkner,
was released by the government on 8 July 2010. While these reports contain the findings
of very different reviews, on different scales, with differing terms of reference, both the
Hawke Review and Faulkner Inquiry hold important lessons for the new Department of
Climate Change and Energy Efficiency. The Hawke Review and the Faulkner Inquiry both
highlighted a number of key elements which led to the unintended consequences of the
programs, in particular:
• the need for stronger leadership and governance balanced to the level of risk
• the quality of program design, planning and management
• need for improvements in organisational culture
• the conduct of risk, audit and compliance activities within the programs, and specifically
the need for much earlier rollout of such activities
• the lack of resources (both individuals with appropriate skills and experience and
fit‑for‑purpose business systems) devoted to the programs.
As Secretary, I am committed to addressing these issues and we will do this by:
• promoting strong leadership, supported by strengthening governance frameworks
• applying robust program design, planning and management
• supporting a culture which promotes fiscal responsibility, prudence and probity
• applying appropriate frameworks for audit and compliance, which are implemented at
the commencement of program delivery
• investing in our resources, including well‑trained and supported staff that exemplify
professional behaviour, integrity and uphold the APS Values
• well designed, scalable and flexible business systems, especially information technology,
human resources and financial platforms.
Despite these problems, during 2009–10 over half a million households directly benefited
from a range of popular and successful programs designed to help Australians improve
their energy efficiency and use of renewable energy. Substantial investments were made
in assisting Australian households, community groups and schools with the cost of the
purchase and installation of solar power systems, solar hot water systems and other
energy efficiency products. Under the Green Loans Program, almost 335,000 Australian
households also received a free home sustainability assessment which provides them
with advice on ways to improve their energy and water efficiency and reduce greenhouse
gas emissions.
The department continued to drive the development and implementation of COAG’s
1 National Strategy for Energy Efficiency, including through enhancements to the Building
Code of Australia, the introduction of the Building Energy Efficiency Disclosure Act
2010, and expanding the range of appliances covered by Minimum Energy Performance
Standards and, where appropriate, the stringency of standards.
Helping Australia adapt to the unavoidable effects of climate change is another of the
department’s important tasks. In 2009–10, the department supported the government’s
leadership of the national debate on climate change adaptation, meeting a growing demand
for information and advice, especially from coastal communities. During the year, the
department contributed to the government’s policy paper Adapting to climate change
in Australia and the National Coastal Risk Assessment, which provided whole‑of‑coast
modelling of the implications of sea level rises. The department also hosted the National
Climate Change Forum, bringing together 200 decision‑makers to begin a dialogue on the
national coastal adaptation agenda.
The United Nations Framework Convention on Climate Change Conference in Copenhagen
in December 2009 produced a solid platform for action, even if it did not meet the high
expectations of some commentators and participants. While the meeting did not deliver a
legally binding global agreement, participants did make significant progress, encapsulated
in the Copenhagen Accord. Under the accord, a broad group of countries agreed, for the
first time, on a definition of dangerous climate change, pledging to keep temperature
rises within two degrees. Parties to the accord also agreed to specify their commitments
and actions within a single framework document, paving the way for a united—but still
differentiated—approach by developed and developing countries to tackling climate
change. The countries that pledged action under the Copenhagen Accord, including the
USA, China and India, account for around 80 per cent of global emissions. A major focus
of the department this year has been to ensure the full integration of domestic policies with
international climate policy.
In our region, the department has been active in support of Australian Government
foreign policy and climate change objectives, including on financing initiatives arising
from the Copenhagen Accord, in developing programs to reduce forest degradation, and by
supporting our Pacific neighbours as they respond to climate change.
Within the department, 2009–10 was a challenging year. The machinery of government
changes in March 2010 generated substantial organisational changes, effectively doubling
the size of the department. In the ensuing months, significant effort has resulted in the
physical consolidation of the department in the Canberra central business district, on
one communications network and operating with much‑improved financial and human
resource management systems.

The outlook for the department in 2010–11 is exciting. We have a wide‑ranging agenda
across all the arms of climate policy and have unfinished business to satisfactorily wind up
1
older programs, consistent with our responses to the independent program reviews. Work
has also now commenced on new, greener accommodation that will be ready for us to
occupy in 2012.
Finally, I would like to thank the department’s staff for their outstanding efforts over the
course of the year, and our stakeholders for the positive and professional way in which they
have engaged with us during our various interactions.
1 Major achievements in 2009–10
Reducing Australia’s greenhouse gas emissions
Carbon Pollution Reduction Scheme design and offsets policy
For much of 2009–10, the department worked on refining the policy design for the CPRS
and its supporting legislation and regulations.
The department prepared amendments to draft legislation in August and December 2009
and in February 2010 for consideration by parliament, along with materials to support the
Minister for Climate Change, Energy Efficiency and Water in parliament. The department
also prepared policy advice and draft regulations on particular elements of the CPRS,
including emissions units, the Australian National Registry of Emissions Units, electricity
generator assistance and emissions‑intensive trade‑exposed industries assistance.
The department undertook significant analysis and briefing in support of the policy
changes announced by the government on 24 November 2009. These changes included
the indefinite exclusion of agriculture from the CPRS; a comprehensive offsets policy to
encourage abatement from sources—including agriculture—not covered by the CPRS;
a mechanism to account for voluntary action in target setting; and amended or new
industry transitional assistance measures for electricity generators, the coal mining sector,
emissions‑intensive trade‑exposed industries (EITEs), and medium to large mining and
manufacturing facilities. The changes were included in the CPRS legislation package
introduced into parliament on 2 February 2010.
The government announced on 27 April 2010 that it would not introduce the CPRS until
after the end of the current commitment period of the Kyoto Protocol (which expires in
2012) and only when there is greater clarity on the actions of other major economies,
including the USA, China and India.
Enhanced Renewable Energy Target scheme
In August 2009, parliament passed legislation to implement the expanded national RET
scheme, designed to deliver on the government’s commitment to ensure that the equivalent
of 20 per cent of Australia’s electricity supply comes from renewable sources by 2020. The
legislation gave effect to an agreement by COAG to create a single national RET scheme.
On 26 February 2010, the government announced that, from January 2011, the RET
scheme would be separated into two parts—the Small‑scale Renewable Energy Scheme
(SRES) and the Large‑scale Renewable Energy Target (LRET). The separation will provide

greater certainty for households, large‑scale renewable energy projects and installers of
small‑scale renewable energy systems. Legislation to implement the changes was passed by
1
parliament on 24 June 2010.
EITE industry assistance program
The department continued to develop and implement the EITE industry assistance
program. In 2009–10, the department finalised 22 EITE activity definitions, completed the
formal assessment process for an additional 10 activities, and released a second exposure
draft of regulations to implement EITE policy under the CPRS. In addition, the department
released, consulted upon and finalised regulations under the RET to enable partial
exemptions for 16 EITE activities in the 2010 RET year. The number of EITE activities
eligible for partial exemptions under the RET in 2010 is expected to increase before
applications close in October 2010.
National Carbon Offset Standard
On 24 November 2009, the department released the National Carbon Offset Standard.
The standard will provide national consistency and consumer confidence in the voluntary
carbon market, and provide guidance on what constitutes a genuine, additional voluntary
offset within the context of Australia’s international commitments.
The department certified six new carbon‑neutral participants under the Greenhouse
Friendly initiative in its last year of operation. The new National Carbon Offset
Standard Carbon Neutral Program will replace the carbon‑neutral component of
Greenhouse Friendly.
Australian Carbon Trust
In January 2010, the department established the Australian Carbon Trust Limited as a
Commonwealth‑owned company that will support action by business on climate change.
The trust will implement two programs: the $100 million Energy Efficiency Trust, which
will provide a range of financing and advisory services to encourage the use of energy‑
efficient technologies and practices for cost‑effective carbon reductions; and the National
Carbon Offset Standard Carbon Neutral Program, which will enable organisations to gain
certification for offsetting some or all of the emissions associated with their operations.
Greenhouse and energy reporting
The National Greenhouse and Energy Reporting Act 2007 (NGER Act) established a

mandatory reporting system for greenhouse gas emissions, energy consumption and
production by eligible Australian corporations. In 2009–10, the department administered
1 the registration of more than 600 corporations, bringing the total number of registered
corporations to 723.
The department managed submissions from 95 per cent of registered corporations,
covering approximately 9,000 facilities, and validated the data from corporations that
submitted their reports.
As required by the legislation, the department’s Greenhouse and Energy Data Officer
published the emissions and energy consumption data of 233 corporations that had
greenhouse gas emissions (scope 1 and scope 2) above the 2008–09 corporate threshold of
125 kilotonnes.
The department expanded its outreach and compliance monitoring activities during the
year. The development of auditor registration and audit management capabilities began.
The department also implemented a range of regulatory capabilities to administer the
NGER Act and to establish the framework to disclose NGER data to Australian, state and
territory governments.
The NGER Act was amended on 18 September 2009. In 2009–10, the department
amended four legislative instruments to support the operation of the Act. These were
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
and Energy Reporting (Auditor Registration) Instrument 2010. Together, these new and
revised instruments established a comprehensive framework for greenhouse and energy
audits under the NGER Act, which will ensure the integrity of information reported by
registered corporations.
Emissions accounting and reporting
Each year, the department prepares and submits Australia’s National Inventory Report

under the UNFCCC. This year’s report, for the period 1990–2008, covered the first year
of the Kyoto Protocol commitment period and included, for the first time, greenhouse gas
emissions estimates compiled using the rules applicable to both the Kyoto Protocol and
the UNFCCC.
In addition, from August 2009 the department began to provide industry and stakeholders
with more timely information on Australia’s national emissions by publishing quarterly
emissions estimates for the national inventory.

Prime Minister’s Task Group on Energy Efficiency
1
From February to July 2010, the department supported the Prime Minister’s Task Group
on Energy Efficiency. In line with the terms of reference, the task group presented a
report to government in July 2010 on options for introducing mechanisms to deliver a
step‑change improvement in Australia’s energy efficiency by 2020 and place Australia at
the forefront of OECD energy efficiency improvement.
The task group comprised the Secretary, Dr Martin Parkinson (chair), with deputy
secretaries from the Department of the Prime Minister and Cabinet and the Treasury,
and the then Deputy Secretary, later Secretary, of the Department of Resources, Energy
and Tourism. The task group was supported by a small inter‑agencies secretariat located
within the department. An external advisory group worked closely with the task group and
consisted of representatives from the energy market bodies, industry, the Energy Retailers
Association, the World Wildlife Fund, the Climate Institute, the Energy Efficiency Council,
the Australian Council of Social Service, and the Australian Council of Trade Unions.
The task group canvassed a wide range of stakeholders in the development of its report,
including in a national consultation process. Some 200 submissions were received from
all sectors of the community in response to the publication of an issues paper. More
than 300 people attended consultation workshops held in Sydney, Melbourne, Brisbane
and Perth.
Improving Australia’s energy efficiency

Energy efficiency policies
Following machinery of government changes, responsibility for energy efficiency and
renewable energy was transferred to the new department on 8 March 2010.
The adverse publicity around some energy efficiency programs has meant that limited
public attention has fallen on a number of key initiatives implemented during 2009–10.
These include policies designed to increase the uptake of energy efficient technology by
households and industry, including the Building Energy Efficiency Disclosure Act 2010,
and the Smart Grid, Smart City initiative. In addition, the department took carriage of a
new program, the Renewable Energy Bonus Scheme—Solar Hot Water Rebate, announced
by the government in February 2010. This also involved overseeing the phase‑out of the
previous rebate scheme, which was wound up in May 2010.
Home Insulation Program
1
Notwithstanding its success in encouraging the insulation of around 1.2 million homes, the
Home Insulation Program (HIP) has been linked with the tragic deaths of four installers
and ongoing concerns regarding compliance and fraud. With the transfer of responsibility
for the program to the new department in March 2010, the Home Insulation Program
Review Office (HIPRO) was established and quickly commenced a program of safety
inspections. On 1 April 2010 Minister Combet announced the Home Insulation Safety Plan
which consisted of the Foil Insulation Safety Program, Home Insulation Safety Program,
Insulation Industry Assistance Program and a Fraud and Compliance Program. This plan is
now well underway, with significant progress in the Inspection and Rectification Program.
Green Loans Program
Since the Green Loans Program commenced on 1 July 2009, almost 335,000 Australian
households have received a free home sustainability assessment which provides them with
advice on ways to improve their energy and water efficiency and reduce greenhouse gas
emissions. The department took carriage of the Green Loans Program on 8 March 2010.
Since then, substantial improvements in delivery of the program have been achieved,
including clearing the backlog of assessment reports, bringing payment processing times
within 30 days, and significantly improving call centre performance.
National Solar Schools Program
In 2009–10, the department assisted more than 2,300 schools to ‘become solar schools’
and improve their energy efficiency. Funding of up to $50,000 was provided to schools
wanting to install solar and other renewable power systems, solar hot water systems,
rainwater tanks and a range of energy efficiency measures. By the conclusion of the
program at 20 June 2015, the aim is that every school in Australia will be a solar school.
Renewable Energy Bonus Scheme—Solar Hot Water Rebate
On 19 February 2010 the Australian Government announced the Renewable Energy
Bonus Scheme—Solar Hot Water Rebate, to assist households to adopt climate‑friendly
technologies and to save money on power bills. Under this new scheme, which replaces
the Solar Hot Water Rebate Program—Energy Efficient Homes Package, the Australian
Government is providing households with a $1,000 rebate for eligible solar hot water
systems and $600 for heat pump systems. During 2009–10, over 122,000 Australian
households have benefitted from the government’s solar hot water rebates.

Solar Homes and Communities Plan
1
Applications to the Solar Homes and Communities Plan closed on 9 June 2009. During
2009–10, work continued on assessing these applications, with over 76,000 Australian
households receiving a rebate of up to $8,000 to assist them to purchase and install a solar
power system. The Australian Government continues to support Australian households and
groups to increase their use of solar power through the Solar Credits mechanism under the
RET scheme.
Adapting to climate change

Australian Government adaptation policy
The department made considerable progress in 2009–10 in supporting Australia’s
adaptation to the unavoidable impacts of climate change. The department coordinated
the development of Adapting to climate change in Australia: an Australian Government
position paper, which was published in February 2010. The paper described the roles
of the Australian Government in adaptation, identified priorities for initial national
adaptation action and set out a broad strategy for progressing adaptation reform.
The framework outlined in this paper was welcomed by decision‑makers across Australia,
and it has provided a foundation for reinvigoration of a national adaptation agenda with
the states and territories through COAG.
Major progress was also made in developing a unified national approach to coastal
adaptation. The first National Coastal Risk Assessment, released by Senator the Hon
Penny Wong, then the Minister for Climate Change, Energy Efficiency and Water, in
November 2009, provided a robust analytical base to underpin consideration of policy
reform. The report described the major challenges that climate change will bring to coastal
management, based on new, whole‑of‑coast modelling of the implications of sea level rises.
It found that up to 247,600 existing houses with a value of around $60 billion were at risk
of inundation from a sea level rise of 1.1 metres as a result of climate change that could be
expected to occur around the turn of the century.
The analysis assessed risk of inundation for a 1.1 metre sea level rise and storm surge (1 in
100‑year event) for the states with storm surge data for their whole coastline (Victoria,
Tasmania and New South Wales). For the remainder of the states, the analysis was based
on a 1.1 metre sea level rise and a high tide.
While work to date has focused on inundation impacts on housing, much of Australia’s
economic and social infrastructure (ports, roads, hospitals and airports) is also at risk.
Having a national storm tide dataset for the whole of the Australian coastline is critical and
1 work is underway on developing this.
National coastal adaptation forum
The National Climate Change Forum: Adaptation Priorities for Australia’s Coast was
convened by the department in Adelaide on 18–19 February 2010, bringing together
around 200 coastal decision‑makers from government, professional associations and the
research community. The forum achieved a broad consensus on the benefits of enhanced
consistency in policy settings for coastal adaptation, and on the need for information to
support the incorporation of adaptation into decision‑making.
Helping to shape a global climate change solution

Copenhagen Accord
The department actively supported the former Prime Minister and Minister in
pursuing Australia’s national interests at the UNFCCC Conference in Copenhagen on
7–18 December 2009. Australia was one of the 30 countries that worked together to
draft the key outcome of the conference, the Copenhagen Accord. Negotiated by leaders
from both developed and developing countries, the accord represents the highest
level of political commitment. Under the accord, developed and developing countries
agreed for the first time on a goal of holding the increase in global temperature to below
2 degrees Celsius, and agreed to specify what they would do to achieve this goal and to a
framework for tracking progress.
Following the conference, the department worked with other countries to implement
key elements of the accord, notably in the areas of finance, reducing emissions from
deforestation and forest degradation in developing countries, and measurement, reporting
and verification of emissions reductions.
Australia’s fast‑start financing for mitigation and adaptation
At the Copenhagen Conference, developed countries committed to providing fast‑start
funding approaching US$30 billion to support developing countries’ climate change
actions for the period 2010–12.
The department, in cooperation with AusAID, coordinated a whole‑of‑government position
on Australia’s contribution to the fast‑start funding. Australia’s fast‑start package, which
totals $599 million of grant‑based official development assistance, will be delivered
over the period to 2012–13 using existing partnerships, mechanisms and relationships.

Consistent with the Copenhagen Accord, Australia’s package is balanced between
adaptation and mitigation. At least 25 per cent of the package will benefit small island
1
developing states.
Reducing emissions from deforestation and forest degradation in

developing countries
The Australian Government is committed to reducing emissions from deforestation
and forest degradation (REDD), which are common in many developing countries. The
department, working closely with AusAID, strengthened Australia’s bilateral climate
change cooperation with Indonesia in 2009–10, securing agreement by Indonesia in
March 2010 to a second large‑scale practical REDD+ activity: the $30 million Sumatra
Forest Carbon Partnership. The project will be located on mineral soils in the Jambi
province of the island of Sumatra. The first joint project with Indonesia under the
partnership, the Kalimantan Forests and Climate Partnership, was located in Central
Kalimantan and is ongoing.
The department led Australia’s participation in a collaborative effort to produce an
international REDD+ Partnership agreement. Developed through the ‘Paris–Oslo
process’, it builds on the Copenhagen Accord’s agreement on the urgent need for a REDD+
mechanism. The partnership agreement, endorsed in May 2010 by over 50 countries
(including Australia), provides a platform for countries to increase REDD+ actions and
finance, and to improve the effectiveness, efficiency, transparency and coordination of
REDD+ initiatives. It will advance REDD+ action in the immediate term, with outcomes to
feed back into the UNFCCC process.
As part of the Paris–Oslo process, the department, in cooperation with counterparts in
France and Papua New Guinea, conducted a survey of REDD+ financing and activities in
early 2010. The survey synthesis report forms the basis of a transparent global database of
REDD+ financing and activities to support the REDD+ Partnership. The survey is available
online at http://www.oslocfc2010.no.
Engagement with Pacific island neighbours
At the 40th Pacific Islands Forum, hosted by Australia in August 2009, the Prime Minister
launched the Australian Government’s Pacific climate change policy document, Engaging
our Pacific island neighbours on climate change: Australia’s approach. Produced by
the department, the document was the first comprehensive statement of the Australian
Government’s commitment to assist Pacific island countries to respond to climate change.
It defined the challenges of climate change in the Pacific and provided clear guidance on
future support.
1 Outlook and priorities for 2010–11
Reducing Australia’s greenhouse gas emissions
Advise and implement climate change mitigation policy
In 2010–11, a top priority for the department will be to advise on and implement the
government’s climate change mitigation policies.
The department will advise on, and implement as required, an integrated suite of measures
to reduce greenhouse gas emissions, promote and improve energy efficiency, and accelerate
the development and deployment of renewable energy technologies.
Enhanced Renewable Energy Target scheme
Primary legislation to separate the RET scheme into the SRES and the LRET was passed
by the parliament on 24 June 2010. In the second half of 2010, the department will work
with industry stakeholders and the Renewable Energy Regulator to develop subordinate
legislation to support these changes.
The department will continue to work with state and territory governments to finalise the
COAG Review of Specific RET Issues. A report on the outcomes of the review is expected to
be considered by COAG in the second half of 2010.
The department will also be working with stakeholders on enhancements to the compliance
and performance requirements for small generation units, including new regulations to
implement compliance inspections of a statistically significant selection of installations.
Assess potential emissions‑intensive trade‑exposed activities
The department expects to undertake up to 25 assessments of potential emissions‑
intensive trade‑exposed (EITE) activities in 2010–11. Activities formally assessed as being
moderately or highly emissions‑intensive will be eligible for partial exemptions under
the RET.
Greenhouse and energy reporting
The department will enhance its regulatory and administrative capabilities in measuring,
monitoring and reporting on Australia’s greenhouse and energy data.
In 2010–11, the Online System for Comprehensive Activity Reporting reporting tool will be
updated to incorporate changes to the National Greenhouse and Energy Reporting (NGER)

measurement determination. Work will also continue on improving functionality for
reporters and the department.
1
The department will continue its collaboration with the states, territories and other
Australian government agencies to align the reporting requirements of existing programs
with the NGER legislative framework and the NGER Streamlining Protocol. As part of the
streamlining process, the department will disclose NGER data to certain other Australian
Government agencies and authorities and the states and territories for use by these parties
in the administration of their programs.
During 2010–11, the department will continue to build awareness among corporations
of their obligations under the NGER Act and will also further develop and refine its
capacity to detect and respond to non‑compliance. The department will develop greater
organisational capacity in the areas of intelligence collection and data analysis, risk
assessment and target compliance operations to ensure the integrity of the mandatory
greenhouse and energy reporting scheme.
Having introduced the Greenhouse and Energy Auditor Registration System in
March 2010, the department will commence the first annual Greenhouse and Energy Audit
Program in the first half of 2010–11.
National Carbon Offset Standard
The department will work with the Australian Carbon Trust to establish and promote
the standard’s new Carbon Neutral Program and to increase participation by Australian
businesses. The department will review the operation of the National Carbon Offset
Standard in 2010–11.
Emissions accounting and reporting
Data collected through the National Greenhouse and Energy Reporting System (NGERS)
is now available to assist in the preparation of Australia’s National Inventory Report 2009.
A priority for 2010–11 will be to decide how best to use the NGERS facility‑level data to
improve the accuracy and coverage of the national greenhouse gas inventory and how to
equip the inventory information systems to manage the data.

Home Insulation Safety Plan
A priority for the department is to continue to address issues raised in the 10 March 2010
ministerial statement by the then Minister Assisting the Minister for Climate Change and
Energy Efficiency, the Hon Greg Combet, AM, MP, in particular, safety concerns regarding
1 the discontinued Home Insulation Program (HIP). Key elements of the work, as set out in
the Home Insulation Safety Plan announced by the Minister on 1 April 2010, are:
• a Home Insulation Safety Program to conduct safety inspections of at least
150,000 houses that had non-foil insulation installed under the HIP
• a Foil Insulation Safety Program to inspect and rectify every house that had foil
insulation installed under the HIP
• industry assistance through the Insulation Worker Adjustment Package (administered
by the Department of Education, Employment and Workplace Relations) and the
Insulation Industry Assistance Package (administered by AusIndustry)
• strong fraud and compliance actions to identify and appropriately manage
non‑compliance under the HIP.
National Strategy for Energy Efficiency
The department will continue to implement the National Strategy for Energy Efficiency, the
headline agreement between the Australian, state and territory governments on improving
energy efficiency. The strategy was agreed by COAG to accelerate energy efficiency efforts,
streamline roles and responsibilities across levels of government, and help households and
businesses prepare for a low‑carbon future.
In 2010–11, the department will implement the Building Energy Efficiency Disclosure

Act 2010 and develop legislation to implement the Greenhouse and Energy Minimum
Standards.
Beyond the legislative sphere, the department will improve building energy efficiency
performance through a National Framework for Building Standard Setting, Ratings
and Assessment.
National Energy Efficiency Initiative
In June 2010, Senator Wong announced the city of Newcastle as the winning bidder for
the National Energy Efficiency Initiative (Smart Grid, Smart City) demonstration project.
The department will implement the commercial‑scale project in partnership with the
EnergyAustralia consortium.

Renewable energy programs
1
In 2010–11, the department will deliver programs to help Australian households reduce
their energy and water usage, while also ensuring the accountability of government
spending on these programs.
On 8 July 2010, Senator Wong announced the discontinuation of the Green Loans
Program and the transition to a grants‑based Green Start program. Over the coming year,
a priority for the department will be to effectively manage the phase‑out of the Green
Loans Program, and its transition to the new Green Start program. The new Green Start
program will be delivered through Commonwealth grants in two rounds and applications
for funding under both of these rounds will open in the second half of 2010.
The new Green Start arrangements will particularly benefit low‑income and disadvantaged
Australians by helping them to save energy and reduce energy bills. The arrangements
will also give greater certainty to home sustainability assessors about their future work.
The department will be working to ensure that the Green Start program is delivered with
transparent and robust administration.
The department will manage the closure of the Solar Homes and Communities Plan,
including finalising outstanding rebate payments.
The department will continue to roll out the redesigned National Solar Schools Program
and will work to ensure its effectiveness, including through providing information to the
education sector. The department will also establish agreements with state and territory
education agencies and block grant authorities for the delivery of the National Solar
Schools Program.
The Renewable Energy Bonus Scheme—Solar Hot Water Rebate, announced by
Senator Wong in February 2010, will continue to be implemented in 2010–11.
Adapting to climate change

Adaptation policy
In 2010–11, the department will work across government to embed climate change
adaptation into policy development, program delivery and asset management. The
department will work with states and territories through COAG to develop and implement
a national adaptation position on roles and responsibilities, and to develop collaborative
actions on adaptation in the coastal zone.
Further work will be directed to developing Australian Government adaptation approaches
1 to ensure that national infrastructure is resilient to likely climate change impacts. This
will involve close liaison with the agencies responsible for infrastructure and regional
development, industry policy, critical infrastructure protection, and energy and resources.
Adaptation capacity
In 2010–11, the department will coordinate research that equips decision‑makers to
manage emerging risks from climate change impacts. A key focus of these efforts will be
working with the National Climate Change Adaptation Research Facility to implement
improvements, the result of a mid‑term operational review. The aim is to ensure that
research targets high‑priority knowledge gaps for decision‑makers throughout Australia.
To build capacity for adaptation in the coastal zone, the department will make available
maps showing major urban areas at risk of inundation from sea level rises under several
climate change scenarios. This initiative will respond to widespread demand for better
information on the distribution of risks. To further inform coastal communities about
possible adaptation approaches, the department will support several coastal adaptation
partnerships. The partnerships will improve understanding of the costs and benefits of
adaptation options and the cost‑effective timing of implementation, and will encourage
information‑sharing.
Climate change science
In 2010–11, the department will continue to work with Australia’s Chief Scientist and
other members of the government’s High Level Coordination Group to deliver an
implementation plan for the 2009 National Climate Change Science Framework. The
framework identifies national climate change science priorities for the coming decade and
sets out ways to harness Australia’s science capacity. The framework will enable better
delivery of science information to government and decision‑makers.
The department will also assist in the coordination of the Fourth Lead Author meeting for
the Intergovernmental Panel on Climate Change special report on managing the risks of
extreme events and disasters to advance climate change adaptation. The meeting will be
hosted by the National Climate Change Adaptation Research Facility on the Gold Coast
in Queensland. The report will be the first global scientific effort to examine the linkages
between disaster risk reduction and adaptation to climate change.

The department’s international efforts in 2010–11 will focus on broad‑based international
climate action that can support or lead to global agreement.
As part of the UNFCCC process, Australia will continue to work with other countries
towards a strong outcome at the Conference of Parties in Mexico at the end of 2010. If the
conference implements key aspects of the Bali mandate and operationalises the provisions
of the Copenhagen Accord, it will be a positive step towards a longer‑term, comprehensive
climate regime that includes a durable, environmentally effective and legally binding
outcome under the Framework Convention.
Australia will look to bring forward international action on key elements—particularly
where we can demonstrate the benefit of climate action and where this action can build
confidence. Demonstrating the benefits of acting to reduce emissions in ways that continue
to deliver strong domestic growth will reinforce that the global community can put in place
arrangements that provide benefits to all participants. This type of action will be pursued
in a number of ways, including through the UNFCCC, the Major Economies Forum on
Energy and Climate, the Group of Twenty (G20), and the Cartagena Group of countries.
The Australian Government’s work to reduce emissions from deforestation and forest
degradation in developing countries is an example of how this approach can deliver a
mutually beneficial outcome.
The department supports the Hon Bob McMullan’s participation, in his personal capacity,
in the UN Secretary‑General’s High‑level Advisory Group on Climate Change Financing.
The department has provided Mr McMullan with analytical support and has acted on
his behalf in working group meetings. The advisory group’s conclusions on sources of
financing to meet the Copenhagen Accord goal of mobilising US$100 billion per year by
2020 will assist policy makers to develop feasible approaches to meet the challenge in a
manner consistent with Australia’s national interests.
The department will continue to deliver practical outcomes on climate change through
bilateral partnerships with China, New Zealand, South Africa, the USA, the United
Kingdom, Japan and the European Union. Australia will continue to help vulnerable
developing countries meet high‑priority climate change adaptation needs through the
International Climate Change Adaptation Initiative.
1

Section 2
Overview
Section 2: Overview
Portfolio overview 34
Organisational change 38
Organisational structure 44
Executive management 50
Outcome and program framework 53
How we will report 57

Figure 1 Climate Change and Energy Efficiency Portfolio structure,
at 30 June 2010
2
Minister for Climate Change, Minister Assisting the Minister for

Energy Efficiency and Water Climate Change and Energy Efficiency
Senator the Hon Penny Wong The Hon Greg Combet, AM, MP
Department of Climate Change

Portfolio Secretary
Dr Martin Parkinson
Outcome 1
Reduction of Australia’s 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 Livingston
Outcome 1
Administer and regulate the national Renewable
Energy Target scheme to encourage increased
renewable electricity generation
2 Portfolio overview
The Department of Climate Change and Energy Efficiency was created as a stand‑alone
portfolio agency following machinery of government changes announced by Prime Minister
Rudd and approved by the Governor‑General on 8 March 2010. The department is the lead
agency in the Australian Government’s response to climate change and is an active and
constructive participant in international climate change negotiations.
The Department of Climate Change and Energy Efficiency is a department of state
staffed under the Public Service Act 1999 and a prescribed agency under the Financial
Management and Accountability Act 1997 (FMA Act). Effective 14 September 2010, the
Minister responsible for the department is the Hon Greg Combet, AM, MP, the Minister
for Climate Change and Energy Efficiency. The Minister is assisted by the Parliamentary
Secretary for Climate Change and Energy Efficiency, Mark Dreyfus, MP. In the 2009–10
reporting period, the Minister responsible for the portfolio department was Senator the
Hon Penny Wong.
The department is responsible for the oversight of the Office of the Renewable Energy
Regulator and the Australian Carbon Trust Limited.
The Office of the Renewable Energy Regulator is responsible for implementing the
government’s 20 per cent renewable energy target, which is to be achieved by 2020. The
Office of the Renewable Energy Regulator is a statutory and prescribed agency operating
under the Renewable Energy (Electricity) Act 2000.
The Australian Carbon Trust Limited is responsible for providing information and tools for
households and businesses to participate effectively in Australia’s climate change response.
The Australian Carbon Trust Limited will manage the Energy Efficiency Trust.
This annual report covers the performance, accountability and financial reporting of the
Department of Climate Change and Energy Efficiency. The Office of the Renewable Energy
Regulator is required to publish its own annual report as a prescribed agency under the
FMA Act.
On 14 January 2010 the Australian Carbon Trust Limited was registered as a public
company limited by guarantee. The Australian Carbon Trust Limited is a Commonwealth
authority and is required to prepare its own annual report in accordance with the
guidelines set out in the Commonwealth Authorities and Companies Act 1997.

The Department of Climate Change and Energy Efficiency leads the development and
coordination of Australia’s climate change and energy efficiency policy and is responsible
for policy advice, policy implementation, program delivery and regulatory oversight in
four areas:
• reducing Australia’s greenhouse gas emissions
• improving Australia’s energy efficiency
• adapting to climate change
• helping to shape a global climate change solution.
Those four areas are closely aligned to the ‘three pillars’ of the Australian Government’s
climate change policy; namely, mitigation, adaptation and international, as illustrated in
Figure 2.
Under the mitigation pillar, the government has been developing and implementing
a range of domestic policies and measures to deliver and report against Australia’s
greenhouse gas emissions reduction targets:
• accelerating the development and deployment of renewable energy technologies to
deliver the legislated target of 20 per cent renewable energy in Australia’s electricity
generation by 2020
• building broad community consensus to cap Australia’s emissions and to price carbon
pollution with the introduction of an emissions trading scheme
• promoting and improving energy efficiency to support the smooth transition of the
economy to support a future price on carbon and to encourage practical household,
community and business action on climate change
• effectively measuring, monitoring, reporting and projecting current and
future emissions.
Under the adaptation pillar, the government has developed a whole‑of‑government policy
framework for climate change adaptation and is building capacity to adapt to the impacts
of climate change through research initiatives and risk assessments.
In pursuit of our international agenda, the government is influencing the development of
international policies and measures in relation to climate change towards broad‑based
international climate action and agreement.
As part of its responsibility for policy development and advice on climate change issues,
the department works closely with other government departments, state and territory
agencies, and corresponding government bodies in other countries. It also liaises closely
with industry, business, environment and community groups.
Figure 2 The three pillars of Australia’s climate change policy
2
Transforming Australia’s
economy and society
Capping emissions and establishing
a price on carbon pollution
through the Carbon Pollution Reduction Scheme
Mitigation Renewable energy technologies
Energy efficiency measures
Commonwealth policy and

program responses
Adaptation Science, research and information
Leading national reform
Multilateral negotiation
including the UNFCCC and Copenhagen Accord
International Regional and bilateral partnerships
Policy, analysis and legal

including targets, finance, and measurement,
reporting and verification

Vision
The department’s vision is to improve Australia’s wellbeing by contributing to effective
national and global responses to climate change, including the necessary transformation
2
of the Australian economy.
Mission
The department’s mission is to support government in developing a more prosperous and
sustainable Australia by leading and coordinating the mitigation of greenhouse emissions,
promotion of energy efficiency, adaptation to climate change, and shaping of global
solutions, through:
• advice to the government that is of the highest quality, is integrated, objective and
well informed
• ensuring quality outcomes through effective design and delivery of programs, services,
and regulatory administration
• building improved understanding of climate change risks, opportunities, and responses
• effective engagement and communication with the Australian public and stakeholders.
Values
The department’s employees exemplify the Australian Public Service Values and Code of
Conduct and the behaviours of a high‑performance workforce, which include:
• ethical behaviour
• accountability
• honesty
• respect for others
• open communication
• commitment
• teamwork.
People
A highly professional and committed workforce is fundamental to the delivery of our vision
and mission. We are committed to recruiting and retaining excellent people through:
• ongoing development
• encouraging flexible, healthy and safe work practices
• competitive rewards and recognition
• encouraging and supporting innovation and continuous improvement
• providing a productive and supportive working environment.
2 Organisational change
In early 2010, two government announcements had a major impact on the department’s
workforce and business operations. They were the machinery of government changes
that came into effect on 8 March 2010, which led to the establishment of a new portfolio,
the Department of Climate Change and Energy Efficiency, and the government’s
announcement on 27 April 2010 to delay the implementation of the Carbon Pollution
Reduction Scheme (CPRS).
Machinery of government changes
The machinery of government changes formalised through the Administrative
Arrangements Order on 8 March 2010 were designed to achieve stronger coordination and
greater efficiency in the development and delivery of climate change policies and programs,
especially in relation to energy efficiency and renewable energy.
The responsibilities transferred to the new Department of Climate Change and Energy
Efficiency from the Department of the Environment, Water, Heritage and the Arts
(DEWHA) under the Administrative Arrangements Order were:
• renewable energy programs
• energy efficiency
• greenhouse gas abatement programs
• community and household climate action.
Amongst the functions that were transferred to the department were delivery of the
National Energy Efficiency Initiative—Smart Grid, Smart City; the Solar Cities Program;
the Renewable Remote Power Generation Program; Energy Efficiency in Government
Operations; and the LivingGreener website.
Elements of the Council of Australian Governments’ National Strategy on Energy Efficiency
that were transferred to the department included:
• enhanced energy efficiency labelling
• expansion of minimum performance standards for appliances and equipment
• the Heating, Ventilation and Air Conditioning High Efficiency Systems Strategy
• the Equipment and Appliance Energy Efficiency Program
• enhanced standards for building energy efficiency (residential and commercial) and
mandatory disclosure of standards
• greenhouse and energy minimum standards legislation

• appliance labelling
2
• phase‑out of inefficient incandescent lighting
• phase‑out of inefficient hot water systems.
Approximately 411 staff associated with those activities in DEWHA were formally
transferred to the Department of Climate Change and Energy Efficiency through a
section 72 process under the Public Service Act 1999.
At the time, the department moved quickly to establish a dedicated integration team to
ensure that the necessary mechanisms were in place to effect a smooth transition of staff
and functions to the new department, and the safe, effective delivery of the government’s
energy efficiency programs. The department quickly commenced work on addressing
issues raised in Minister Combet’s ministerial statement of 10 March 2010, in particular
addressing safety concerns regarding the Home Insulation Program.
Delay of the CPRS
On 27 April 2010, the government announced that it would not introduce the CPRS until
after the end of the current commitment period of the Kyoto Protocol and that it would
introduce it only when there was greater clarity on the actions of other major economies,
including the USA, China and India. As a result, the government announced it would not
move to legislate the CPRS before the end of 2012, and the establishment of the Australian
Climate Change Regulatory Authority (ACCRA) would be delayed.
After the announcement, the department reviewed its mitigation policy advice functions
and restructured to provide advice on mitigation policy and to focus on domestic
mitigation strategy, international carbon markets and land‑based abatement. From the
period 27 April to 30 June 2010, the Emissions Trading Division documented its work on
the CPRS, completed emissions‑intensive trade‑exposed assessments to provide eligible
industries with partial exemptions under the Renewable Energy Target (RET), and advised
on non‑CPRS climate change mitigation policy. At 30 June 2010, the Emissions Trading
Division ceased to exist and its mitigation policy functions were divided between two new
divisions: the Climate Strategy and Markets Division and the Land Division. The Land
Division also includes Australia’s National Carbon Accounting System and the National
Greenhouse Accounts and administers the National Carbon Offset Standard.
The ACCRA Group was set up on 29 June 2009 to establish ACCRA. The authority was to
be responsible for implementing and administering the CPRS, the National Greenhouse
and Energy Reporting Act 2007 (NGER Act) and the Renewable Energy (Electricity)
Act 2000.
Following the government’s announcement on 27 April 2010, the group was disbanded
2 with effect from 30 June 2010. Its ongoing elements are now incorporated in a number
of the work units of the department and of the Office of the Renewable Energy Regulator.
Some of the projects supporting the implementation of the CPRS and integration of
existing legislation were discontinued.
Against the backdrop of the government’s policy and administrative decisions, the
department is undergoing a significant transition. The Secretary has established a change
management task force to effect the department’s transition to an integrated, high‑
performing organisation that meets the expectations of government. The task force will
take into account reports from external advisers, staff and stakeholders to devise a cultural
and business transformation program. The program will be a major area of focus for the
department in 2010–11.
In the short term the government will boost existing investments in clean and renewable
energy and support greater energy efficiency measures in order to reduce greenhouse
gas emissions. That means a faster and more accelerated investment in renewables and
renewable energy technology to help Australia meet its emissions reduction targets. During
the budget and forward years, the department will continue to be at the forefront of the
government’s response to climate change.

Feature:
Hawke Review of the Home Insulation
Feature:
Program and Faulkner Inquiry into the Green
Loans Program 2
During the financial year there were a number of reviews of departmental activities which provided
valuable lessons for the department. Of particular note are two reviews originally commissioned
in the Environment, Water, Heritage and the Arts Portfolio—the Hawke Review of the Home
Insulation Program and the Faulkner Inquiry into the Green Loans Program. Both reports have been
released publicly.
The Hawke Review of the Home Insulation Program reported to the secretaries of the department
and DEWHA on the effectiveness of the program design, administration and delivery arrangements
that were in place for the Home Insulation Program. The Faulkner Inquiry reported to the Minister
and the Secretary on the probity of the contractual arrangements and procurement processes and
decisions that formed part of the final design and implementation of the Green Loans Program.
While the Hawke Report and the Faulkner Inquiry were very different, they both have important
lessons for the department.
Key findings
The Hawke Review and the Faulkner Inquiry highlighted a number of elements of the department’s
program delivery which led to unintended consequences for the programs:
• leadership and governance were not appropriate for the level of risk
• program design, planning and management were not of the quality required
• weaknesses were evident in the culture of the organisation
• risk, audit and compliance activities were not conducted appropriately and, in particular, were not
aligned with the implementation aspects of the program
• resources, staff and business systems were not adequate.
How the department will respond

The department is committed to addressing the shortcomings identified in those reports and will:
• promote strong leadership, and support this by strengthening governance frameworks
• apply robust program design, planning and management
• support a culture that promotes fiscal responsibility, prudence and probity
• apply appropriate frameworks for audit and compliance and implement those at the start of
program delivery
• invest in the department’s resources, ensuring that staff are well trained and supported and that
information technology is well designed, scalable and flexible.
At a practical level the department will achieve this by taking actions in the following areas:
• improving governance
• strengthening the skills of our program managers
• improving business platforms and systems
• implementing a change management task force.
The department is committed to an independent review of its response between June and
December 2011. The Audit Committee will monitor the internal action plan to deliver this
response between now and the conduct of the independent review.
Feature:
2 Setting up a regulatory authority—the
Australian Climate Change Regulatory
Authority model
Establishing the Australian Climate Change Regulatory Authority (ACCRA) was a significant
undertaking in the relatively new area of climate change regulation. ACCRA was intended
to have administrative oversight of the National Greenhouse and Energy Reporting System,
the Renewable Energy Target, and the Carbon Pollution Reduction Scheme (CPRS), a key
strategy for reducing greenhouse gas emissions and meeting Australia’s commitment to the
Kyoto Protocol. ACCRA was never formally established due to the government’s decision on
27 April 2010 to delay the implementation of the CPRS; however, much of the work necessary to
set up the organisation had already been undertaken by that time.
Although ACCRA did not eventuate, the ACCRA establishment process, which was an intensive
and well‑documented one, will provide a template for ACCRA’s possible establishment when
there is a need based on government policy and for other government departments setting up
regulatory agencies.
A summary of the ACCRA regulatory framework, establishment strategies and governance
processes is set out below.
The model
ACCRA regulatory framework
The ACCRA regulatory framework, developed early in the establishment process, and based on
the best practice compliance approaches in the ANAO Better Practice Guide, Administering
Regulation, underpinned all subsequent strategies, plans and processes.
ACCRA establishment strategy
The ACCRA establishment strategy set out the vision, mission and objectives of ACCRA. It set
out the strategy for establishing ACCRA as a single, fully integrated regulator, as required by the
draft legislation. It also specified the objectives of the establishment process and the principles
that should underpin the approach to planning and building ACCRA.

ACCRA establishment blueprint
2
The ACCRA establishment blueprint was the high‑level statement of what ACCRA would be,
what it would do, and how it would do it. The blueprint not only highlighted the capability
required for ACCRA to perform its functions and obligations but also set out the time line and
key legislative milestones involved.
Governance bodies
The ACCRA Establishment Integration Authority was set up to ensure that the ACCRA Group
had processes and procedures in place to implement the CPRS once ACCRA was formally
established. It was intended that the integration authority would become part of ACCRA’s
governance structure when the enabling legislation was passed.
The Program Management Office was established to help build ACCRA’s organisational
capability, including, for example, to support governance at program and project levels and to
develop an organisational culture of continual improvement and one that had the flexibility and
responsiveness to meet the regulator’s requirements.
The outcome
The ACCRA program was closed on 30 June 2010 and its material stored so that relevant
information would be available for future use. Materials related to the closure of the project
were consolidated into a single program closure report and all documents for discontinued
projects were completed and closed in accordance with the modelling conventions for the
ACCRA establishment program.
The Integration Authority monitored the closure of the ACCRA program by winding down
all activities, documenting processes and histories and signing off closure documents. The
authority ceased operations in accordance with its terms of reference at its final meeting on
29 June 2010.
2 Organisational structure
Figure 3 shows the department’s organisational structure after the machinery of
government changes of 8 March, when the new Department of Climate Change and Energy
Efficiency was created.
Figure 4 shows the organisational structure that was formally implemented on 1 July 2010.
The structure supports the department’s role in the delivery of a broader range of functions
and responsibilities than had previously been the case.
The department’s divisions and their roles in 2009–10 are as follows.
Emissions Trading Division
The Emissions Trading Division was established to undertake the whole‑of‑government
development and implementation of Australia’s CPRS. Following the government’s
announcement to delay the implementation of the CPRS, the division’s work program
changed. From 27 April to 30 June 2010, the division was responsible for documenting
work on the CPRS; completing emissions‑intensive trade‑exposed assessments in order to
provide eligible industries with partial exemptions from the RET; and advising on climate
change mitigation policy.
Adaptation, Land and Communications Division
The Adaptation, Land and Communications Division is responsible for developing
and implementing climate change adaptation and land management strategies and
coordinating climate change science activities. The division is also responsible for
department‑wide communications and public affairs activities.
International Division
International Division is responsible for developing and implementing Australia’s
international climate change policy. The division’s work falls into three broad categories:
analysis and policy advice, international negotiations and regional and bilateral
engagement. The division provides strategic policy advice on Australia’s approach to
international climate change issues, such as mitigation, carbon markets and financing,
and reducing emissions from deforestation and forest degradation in developing countries
(REDD+). It leads Australia’s participation in international climate change negotiations,
including under the United Nations Framework Convention on Climate Change and
the Kyoto Protocol. It also leads bilateral engagement on REDD+ and adaptation, and
implements bilateral partnerships with countries including China, the USA, Indonesia and
Pacific island countries.

Strategies and Coordination Division
2
The Strategies and Coordination Division played a central role in coordinating and
implementing climate change policy across the department and Australian Government
agencies. The division led policy work on complementary measures, including by
engaging the states and territories. It led work on legislation for the expanded RET,
on voluntary action, on energy efficiency policy and implementation, including for the
National Carbon Offset Standard and the Australian Carbon Trust Limited, and on the
design and implementation of the Climate Change Action Fund. The division also led
greenhouse emissions reporting by providing policy support for the National Greenhouse
and Energy Reporting System legislative framework and preparing the annual National
Greenhouse Accounts.
Renewables and Energy Efficiency Division
Working in partnership with governments, schools, industry, the community and
households, the Renewables and Energy Efficiency Division focuses on the delivery
of enhanced regulatory frameworks for appliances and buildings, on research and
demonstration projects, and on policy development.
Demand Driven Programs Division
The Demand Driven Programs Division designs and administers policies and programs
that support households and community groups taking practical action to improve energy
efficiency and increase their use of renewable energy. Those programs include the Green
Loans Program and Green Start program; the Renewable Energy Bonus Scheme—Solar
Hot Water Rebate; the Solar Homes and Communities Plan; and the National Solar
Schools Program.
Home Insulation Program Review Office
The Home Insulation Program Review Office was established in February 2010 to manage
the closure of the Home Insulation Program, mitigate the risks associated with the work
carried out under the Home Insulation Program and provide transitional assistance to the
insulation industry.
Greenhouse and Energy Reporting Division
The Greenhouse and Energy Reporting Division supports the Greenhouse Energy Data
Officer in the administration of the NGER Act. The NGER Act provides a single national
reporting framework for reporting and disseminating information related to corporations’
greenhouse gas emissions, greenhouse gas projects, and energy consumption and energy
production. The division is responsible for developing and implementing capabilities for
2 registration and reporting activities, data management, compliance monitoring, audit
registration, audit management, stakeholder engagement, publishing data, and disclosing
data to other government agencies.
Stakeholder Support and Engagement Division
The Stakeholder Support and Engagement Division was established in January 2010 to
support and educate the regulated community to voluntarily comply with legislation.
The division was responsible for stakeholder engagement and education, compliance
monitoring and investigations, and auditor management for existing national greenhouse
and energy reporting legislation and for developing these capabilities for future legislation,
including for the proposed CPRS.
Following the delay of the CPRS, staff and functions from the Stakeholder Support and
Engagement Division were transferred to the Data Reporting and Registration Division,
which was renamed the Greenhouse and Energy Reporting Division on 1 July 2010
(see above).
ACCRA Establishment and CPRS Implementation Division
The ACCRA Establishment and CPRS Implementation Division was responsible for
implementing the CPRS legislation and combining this with the functions of the
Greenhouse and Energy Data Officer and the Renewable Energy Regulator. The division
was also responsible for developing ACCRA’s regulatory policies, CPRS procedures,
business architecture and processes, information and communications technology (ICT)
systems and governance processes.
Following the delay of the CPRS, some functions from the ACCRA Establishment and CPRS
Implementation Division were wound up and others were transferred to the newly formed
Governance and Program Support Division and the Corporate Support Division. Staff
either moved with their function or were redeployed across the department.
Corporate, governance and program support services are provided by the Governance and
Program Support Division and the Corporate Support Division.
Governance and Program Support Division
The machinery of government changes in early 2010 allocated major new program
functions to the department’s existing policy and regulatory responsibilities. The
Governance and Program Support Division supports the department with advice and
tools for best practice program design and management; effective risk analysis, planning

and management processes; and legal support and advice underpinning policy and
program design and delivery. The division provides support through the development
2
and implementation of robust governance mechanisms to support decision making across
the organisation, and through fraud investigations and their management with related
agencies (such as the Australian Federal Police). Additionally the division provides support
for ministers and the department’s Executive, including by managing information flows
(providing advice, briefings, Question Time briefs and other parliamentary support).
Corporate Support Division
The Corporate Support Division, which was known as the Corporate and Governance
Division before the machinery of government changes of 8 March, has responsibilities for
service delivery across the functional areas of human resources, finance, ICT and business
services as well as the associated policies and practices that underpin those services that
build and sustain the department’s capabilities.
The division was elevated from branch status in November 2009, in line with the
department’s growth and increasing needs.
2
Figure 3 Top management structure following machinery of government changes on 8 March 2010
Secretary
Martin Parkinson
Deputy Secretary Deputy Secretary Deputy Secretary Deputy Secretary

Blair Comley Malcolm Thompson Martin Bowles Geoff Leeper
Home Insulation
Emissions Trading Renewables and Energy Program Review Data Reporting and Corporate and
Division Division Division Registration Division Governance Division
First Assistant Secretary First Assistant Secretary First Assistant Secretary First Assistant Secretary First Assistant Secretary
Barry Sterland Clare Walsh (Acting) Bernadette Welch David Rossiter Penny Weir
(Acting)
Adaptation, Land ACCRA Establishment

Demand Driven Renewable Energy
and Communications and CPRS
Programs Division Bonus Scheme
Division Implementation Division
First Assistant Secretary First Assistant Secretary
Alex Rankin Cathy Skippington
Ian Carruthers Natalie Howson
International Division
Stakeholder Support

Group Systems and
First Assistant Secretary
and Engagement
Support
Louise Hand
Division
Chief Adviser
Ian Williams
Harinder Sidhu
Natalie Howson
Prime Minister’s Task Group on

Energy Efficiency Strategies and
Secretariat Coordination Division
Howard Bamsey First Assistant Secretary
Head of Secretariat Shayleen Thompson
Ross Carter
Bridget Brill
Figure 4 Top management structure at 1 July 2010
Secretary
Martin Parkinson
Adaptation,
Greenhouse Energy Efficiency Home Insulation
Frameworks Group
Reporting and Group Group
Deputy Secretary
Governance Group Deputy Secretary Deputy Secretary
Blair Comley
Deputy Secretary Malcolm Thompson Martin Bowles
Geoff Leeper
Governance and
Home Insulation
Program Support Renewables and Energy Corporate Support Change Management
Land Division Program Review
Division Efficiency Division Division Task Force
First Assistant Secretary Division
First Assistant Secretary First Assistant Secretary First Assistant Secretary First Assistant Secretary
Shayleen Thompson First Assistant Secretary
Bernadette Welch Clare Walsh (Acting) Penny Weir Natalie Howson

Andrew Bailey
(Acting)
Adaptation, Science
Demand Driven Climate Strategy and
and Communications
Programs Division Markets Division
Division
Alex Rankin Jenny Wilkinson (Acting)
Ian Carruthers
Prime Minister’s Task Group on
Energy Efficiency
Head of Secretariat
International Division Howard Bamsey
Greenhouse and Energy

Reporting Division
Louise Hand Ross Carter

Chief Adviser Assistant Secretary

David Rossiter
Harinder Sidhu Bridget Brill
Section 2: Overview
2
49
2 Executive management
The Secretary of the department is Dr Martin Parkinson. At the end of 2009–10
Dr Parkinson was supported by five deputy secretaries: Mr Howard Bamsey, Mr Blair
Comley, Mr Geoff Leeper, Mr Malcolm Thompson and Mr Martin Bowles.
Secretary, Martin Parkinson
The Secretary is responsible for providing overall leadership
to the department: he determines the department’s priorities,
delivers organisational performance and directs higher priority
initiatives. In consultation with the deputy secretaries, the
Secretary is responsible for overseeing corporate governance
and resource allocations and providing strategic direction. The
Secretary is accountable to the Minister for Climate Change and
Energy Efficiency.
Dr Parkinson was appointed as Secretary when the Department
of Climate Change was established on 3 December 2007. Dr Parkinson’s appointment
followed six years as Executive Director (Deputy Secretary) in the Department of the
Treasury, with responsibility for domestic and international macroeconomic issues,
and as Deputy Secretary of the Climate Change Group in the Department of the Prime
Minister and Cabinet, with responsibility for leading and coordinating implementation
of the emissions trading scheme and coordinating climate change policy. He has also
worked at the International Monetary Fund on issues relating to the reform of the global
financial system.
Deputy Secretary, Howard Bamsey
Howard Bamsey is a Deputy Secretary in the department and
Australia’s Special Envoy on Climate Change. In the later part of
2009–10, he led the Secretariat to the Prime Minister’s Task Group
on Energy Efficiency.
Before joining the department, Mr Bamsey was head of the

Australian Greenhouse Office, the former Australian Government
agency with responsibility for climate change. In 2006 and 2007
he was co‑chair of the United Nations ‘Dialogue on Long‑term
Cooperative Action on Climate Change’, which launched
negotiations on long‑term cooperative climate change action.

Mr Bamsey spent more than 20 years in the Australian foreign service. He served in the
main United Nations centres of New York, Geneva and Vienna as well as other capitals.
2
His positions included Ambassador to the United Nations in Geneva and Ambassador for
the Environment.
Deputy Secretary, Blair Comley
Blair Comley is the Deputy Secretary of the Frameworks Group.
Mr Comley has executive oversight for the climate change strategy
and market instruments, international climate change policy, and
issues related to the land sector.
Previously Mr Comley held a range of senior positions in the
Treasury, including as General Manager of the Business Tax
Division, Indirect Tax Division, Macroeconomic Policy Division
and Debt Management Review Team. He also represented
Australia on economic matters at the OECD for three years and
was the Acting Chief Executive Officer of the Australian Office of Financial Management
with responsibility for managing the Australian Government’s debt and related
derivative portfolio.
Deputy Secretary, Geoff Leeper
Geoff Leeper joined the department as Deputy Secretary of the
ACCRA Group on 29 June 2009. He is currently responsible for the
Adaptation, Science and Communications Division; Greenhouse
and Energy Reporting Division; and Governance and Program
Support Division.
Prior to joining the department, he was Deputy Secretary of the
Department of Families, Housing, Community Services and
Indigenous Affairs (2007–09) and the Department of Human
Services (2005–07) and Deputy Chief Executive Officer of Medicare
Australia (2001–05).
Deputy Secretary, Malcolm Thompson
2
Malcolm Thompson joined the department when the machinery‑of‑
government changes took effect on 8 March 2010. Mr Thompson
is the Deputy Secretary of the Energy Efficiency Group and
is responsible for renewables and energy efficiency policy
and programs.
Prior to the machinery of government changes, Mr Thompson
worked at Deputy Secretary and First Assistant Secretary levels in
the Department of the Environment, Water, Heritage and the Arts
(2007–10) and spent four years on water policy at the National
Water Commission and in the Department of the Prime Minister and Cabinet helping to
develop and implement the 2004 National Water Initiative (2003–07).
Deputy Secretary, Martin Bowles
Martin Bowles joined the department on 8 March 2010, when the
machinery of government changes took effect. Mr Bowles is the
Deputy Secretary of the Home Insulation Group and is currently
oversighting the rollout of the Home Insulation Safety Plan and the
closure of the Home Insulation Program.
From 2006 to March 2010, Mr Bowles was Deputy Secretary
Defence Support in the Department of Defence. Before joining
the Australian Public Service, he was a senior executive in
education and health areas of the New South Wales public sector
(1995–2006). Prior to 1995, he held senior corporate services and general management
positions in Queensland.

Outcome and program framework
2
The department contributes to the wellbeing of all Australians by delivering a range of
programs that support the following outcome:
Reduction of Australia’s 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.
Supporting this outcome, the department has four programs.
Program 1.1: Reducing Australia’s greenhouse gas emissions
The Program 1.1 objective is to develop and implement domestic policies and measures
to deliver Australia’s greenhouse gas emissions reduction targets, including a legislated
target of 20 per cent renewable energy in Australia’s electricity generation by 2020;
consideration of the introduction of the CPRS after the Kyoto Protocol commitment period
(2008–12) and when there is sufficient international action; developing an integrated suite
of measures to reduce greenhouse gas emissions, promote and improve energy efficiency,
and accelerate the development and deployment of renewable energy technologies;
and developing effective measuring, monitoring and reporting systems for current and
future emissions.
Program 1.2: Improving Australia’s energy efficiency
The Program 1.2 objectives are to work in partnerships with governments, industry,
schools, individual households and the community to deliver improved energy efficiency
and greater use of renewable energy, as well as to efficiently and effectively close the
Home Insulation Program, manage ongoing risk, and mitigate stakeholder concerns
(including through appropriate governance and reporting frameworks, and compliance and
fraud processes).
Program 1.3: Adapting to climate change
The Program 1.3 objective is to develop a whole‑of‑government policy framework for
climate change adaptation and the advancement of science‑based research.
Program 1.4: Helping to shape a global climate change solution
The Program 1.4 objective is to influence the development of international policies and
measures in relation to climate change through the pursuit of broad‑based international
climate action and agreement.
Figure 5 Outcome and program structure at 30 June 2010
2
Outcome 1
Reduction of Australia’s 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 Program 1.2 Program 1.3 Program 1.4

Reducing Australia’s Improving Australia’s Adapting to Helping to shape
greenhouse gas energy efficiency climate change a global climate
emissions change solution
Administered programs
The department administers a number of programs on behalf of the government.
Program 1.1: Reducing Australia’s greenhouse gas emissions

The Australian Carbon Trust was established to support action on climate change by
businesses and households. It was established to manage two initiatives:
• the Energy Efficiency Trust, which provides $101.2 million in seed funding to promote
energy efficiency in the business sector
• the Energy Efficiency Savings Pledge Fund, which has been deferred, pending future
decisions on the CPRS.
The Climate Change Action Fund was designed to provide targeted assistance to

businesses, community sector organisations, workers, regions and communities to help
smooth the transition to a low‑emissions economy. Implementation of the fund has been
postponed as part of the deferral of the CPRS.
The Climate Change—Foundation Campaign provides $30 million for a public

education and engagement program. It will be informed by market research and
will provide all Australians with the opportunity to better understand the issue of
climate change.
Program 1.2: Improving Australia’s energy efficiency

The Green Loans Program helped Australian households identify better ways to
save energy and water, save money on bills, and protect the environment for the future
by offering free home sustainability assessments to households. The replacement

Green Start program will be delivered through two separate rounds of competitive
grant funding. Round one will provide grants to individuals or organisations to deliver
2
on‑site energy assessments for households. Round two will assist low‑income and
disadvantaged households to improve their energy efficiency and reduce household
energy expenditure.
Solar Cities is a partnership between all levels of government, industry, business and
local communities to trial sustainable energy solutions.
The demonstration project National Energy Efficiency Initiative—Smart Grid,

Smart City will deploy a live, integrated, smart grid of commercial size and scope in a
community within a single electricity distributor’s network. Newcastle will be the site of
Australia’s first commercial‑scale smart grid.
The Solar Homes and Communities Plan helped over 110,000 Australian homes

and community organisations reduce their energy use, help the environment and save on
energy bills by providing rebates of up to $8,000 for the installation of solar photovoltaic
systems. While applications for this program closed in June 2009, rebates are still
being processed as pre‑approved installations are finalised.
The Renewable Remote Power Generation Program provides financial support to

increase the use of renewable generation in remote parts of Australia that presently rely on
fossil fuels for electricity supply. Rebates were paid to households, communities, not‑for‑
profit, business, government and other organisations.
The National Solar Schools Program assists schools to take practical action to tackle

climate change and provide education outcomes by providing grants of up to $50,000 for
each school to install solar power systems and other energy and water saving measures.
The Home Insulation Safety Program mitigates the risks associated with work carried

out under the Home Insulation Program by providing a targeted, risk‑based program of
inspections and rectifications. The program will cover a minimum of 150,000 houses that
had non-foil insulation installed as well as anyone who rings the Safety Hotlines with
concerns about the safety of their installation.
The Foil Insulation Safety Program mitigates the risks associated with work carried

out under the Home Insulation Program by providing for inspections of every house that
had foil insulation installed and, at the householder’s discretion on the advice of a licensed
electrical contractor, installing a safety switch or removing the insulation.
The Insulation Industry Assistance Program was designed to provide financial

assistance to reputable home ceiling insulation businesses for inventory held when the
Home Insulation Program was terminated. Applications closed on 4 June 2010.
The Renewable Energy Bonus Scheme–Solar Hot Water Rebate assists
2 households to save money on power bills and reduce their carbon emissions by assisting
eligible home‑owners, landlords or tenants to replace their electric storage hot water
systems with solar or heat pump hot water systems.
The Low Emissions Plan for Renters provided financial assistance to landlords

(or tenants with landlord authorisation) for installation of ceiling insulation in existing
rental homes. The program was incorporated into the Energy Efficient Homes Package,
which has now closed.

The Australian Climate Change Science Program aims to improve our
understanding of the causes, nature, timing and consequences of climate change so that
industry, community and government decisions are better informed.
The Australian Centre for Climate Change Adaptation promotes and supports
adaptation action in three key ways: by delivering public good information for adaptation;
by contributing to national adaptation reform in priority sectors, including coasts and
infrastructure; and by working across government to embed adaptation in policy, programs
and asset management.
Program 1.4: Helping to shape a global climate change solution

Influencing International Climate Change Policy provides specialist advice on
international climate change arrangements and on building the capacity of key developing
countries to take effective climate change action through bilateral partnerships.
Legislation
The 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
2
The department’s outcome and reporting framework was revised following the
Administrative Arrangements Order of 8 March 2010. The new framework, which reflects
the energy efficiency functions transferred from DEWHA, is the framework used in the
department’s 2010–11 Portfolio Budget Statements and under which the department has
operated since 8 March.
In accordance with the Requirements for Annual Reports published by the Department

of the Prime Minister and Cabinet, the department will report its performance for the
12‑month period from July 2009 to June 2010 against the relevant program objectives,
deliverables and key performance indicators published in the Department of Climate
Change 2009–10 Portfolio Budget Statements and the DEWHA 2009–10 Portfolio
Budget Statements.
Figure 6 Changes to outcome and program reporting
2010–11 Portfolio Budget Statements

2009–10 Portfolio Budget Statements Department of Climate Change and Energy
Department of Climate Change Efficiency
Outcome 1: Outcome 1
Reduction of Australia’s greenhouse gas Reduction of Australia’s greenhouse gas
emissions, adaptation to the impacts of emissions, adaptation to the impacts of
climate change, and negotiation of an effective climate change, and negotiation of an effective
global solution, through the development and global solution, through the development and
implementation of a national response to climate implementation of a national response to climate
change, and bilateral, regional and multilateral change, and bilateral, regional and multilateral
engagement internationally. engagement internationally.a
Program 1.1: Program 1.1:

Reducing Australia’s greenhouse gas emissions Reducing Australia’s greenhouse gas emissions

Adapting to climate change Improving Australia’s energy efficiency

Helping to shape a global climate change Adapting to climate change
solution
2009–10 Portfolio Budget Statements Program 1.4:

Department of the Environment, Water, Helping to shape a global climate change
Heritage and the Arts solution
Outcome 2:
Program 2.1:
Energy efficiency and climate change
a The outcome statement reported in the department’s 2010–11 Portfolio Budget Statements was revised following
advice received from the Minister for Finance and Deregulation.
2

Section 3
Report on
performance
Section 3: Report on performance
Program 1.1: Reducing Australia’s greenhouse gas emissions 61
Analysis of performance 61
Performance report for Program 1.1 73
Program 1.2: Improving Australia’s energy efficiency 75
Program 1.3: Adapting to climate change 93
Program 1.4: Helping to shape a global climate change solution 101

Program 1.1: Reducing Australia’s greenhouse 3
gas emissions
In 2009–10, the department contributed to Program 1.1: Reducing Australia’s greenhouse
gas emissions through the following deliverables in the department’s 2009–10 Portfolio
Budget Statements:
• design and implement the Carbon Pollution Reduction Scheme (CPRS)
• develop the National Carbon Accounting Toolbox (NCAT), a nationally consistent
emissions estimation tool for forestry and agriculture in the CPRS
• establish the Australian Climate Change Regulatory Authority (ACCRA) to oversee the
operations of the CPRS
• provide assistance to business, industry and community organisations to transition to a
low‑pollution economy through the Climate Change Action Fund (CCAF)
• assist emissions‑intensive trade‑exposed industries and other strongly affected
industries to transition to a low‑carbon economy
• develop appropriate tools to assist Australian business to comply with the National
Greenhouse and Energy Reporting System (NGERS)
• streamline greenhouse emissions and energy reporting through the Council of
Australian Governments (COAG)
• release the National Greenhouse Gas Inventory for 2008
• implement the expanded Renewable Energy Target
• establish the Australian Carbon Trust to support household and business individual
action to cut energy use and reduce emissions.
Analysis of performance
Carbon Pollution Reduction Scheme
In 2009–10, the department focused on refining the policy for the CPRS and on developing
the scheme’s supporting legislation and regulations.
The department released draft regulations on emissions units, the Australian National
Registry of Emissions Units, the Electricity Sector Adjustment Scheme (ESAS) and the
emissions‑intensive trade‑exposed (EITE) assistance program. The department also
provided input into draft Corporations Amendment Regulations relating to emissions units
as financial products.
Work on programs to assist emissions‑intensive and strongly affected industries to
3 transition to a low‑carbon economy continued during the financial year. Detail on this is
provided below under ‘Assisting the transition to a low‑carbon economy’.
At the start of the financial year, the department established a Technical Options
Development Group to develop mitigation policy options for the agricultural sector as
part of the Agriculture Work Program. From July to September, experts and leaders from
industry met on a number of occasions to talk about options for reducing emissions from
each major agricultural industry.
The department’s tenders for an auction solution provider and a settlement solution
provider to assist with the auction of Australian emission units did not proceed because the
CPRS was deferred. The department continued to develop legislative policy related to the
conduct of auctions, including by commissioning experimental work testing various design
possibilities. This work, which was close to conclusion at the time the CPRS was deferred,
has been carefully documented for future reference.
The department worked closely with stakeholders to resolve outstanding policy issues
related to the reforestation scheme. The department issued two discussion papers,
considered numerous forest and carbon industry submissions and held two formal
consultations in September and October 2009. The consultations and further internal
policy development enabled progress on key issues to continue, including on the definition
of forest stands, an overhaul of the NCAT and the policy for issuing credits under the
scheme, and accommodating land held by Indigenous landholders.
Following the Senate’s decision on 13 August 2009 not to pass the CPRS legislation,
the package of 11 bills was re‑introduced into parliament on 22 October 2009. Five
of these bills had been developed by the Treasury and the Department of Families,
Housing, Community Services and Indigenous Affairs to give effect to the government’s
commitments on fuel tax and household assistance.
Following the release of the opposition’s proposed amendments to the CPRS on
19 October 2009, the department analysed and provided briefings on the proposed
amendments to support the negotiations between the government and the opposition.
On 24 November 2009, the government announced a range of modifications to the CPRS
agreed with the opposition. The department developed policy and legislative amendments
to implement the modifications, including wider recognition of voluntary action and
a mechanism to account for this in target setting; the establishment of the Coal Sector
Adjustment Scheme (CSAS) (see separate report below) and the Transitional Electricity Cost
Assistance Program; and modifications to statutory review provisions, the ESAS and the EITE
assistance program. Other amendments included the explicit exclusion of agriculture from
the CPRS and provisions for a domestic offsets program.

In November 2009, the government also released the National Carbon Offset Standard,

which provides guidance on what constitutes a genuine, additional voluntary emissions

3
offset. It sets minimum requirements for the verification and retirement of voluntary
carbon credits and provides guidance for calculating the carbon footprint of an
organisation or product for the purpose of achieving ‘carbon neutrality’.
On 2 December 2009, the CPRS legislation was defeated in the Senate. On the same day,
the Hon Julia Gillard, MP, the then Deputy Prime Minister, Senator the Hon Penny Wong,
the then Minister for Climate Change, Energy Efficiency and Water, and the Hon Greg
Combet, AM, MP, the then Minister Assisting the Minister for Climate Change, announced
that the government would introduce the CPRS into parliament on the first sitting day in
February 2010.
The department revised the CPRS legislation to include the amendments previously agreed
with the opposition. A package of 11 bills, substantively different from the 2009 packages,
was introduced into the House of Representatives on 2 February 2010 but was never
considered by the Senate.
On 27 April 2010, the government announced that it would not introduce the CPRS until
after the end of the current commitment period of the Kyoto Protocol and would do so only
when there was greater clarity on the actions of other major economies, including the USA,
China and India. As a result, the government announced that it would not move to legislate
the CPRS before the end of 2012.
As a result of the announcement, from 27 April to 30 June 2010, the department’s
Emissions Trading Division documented and recorded the work previously undertaken
on the CPRS, completed further EITE assessments in order to provide eligible industries
with partial exemptions from the Renewable Energy Target (RET), and provided advice on
climate change mitigation policy generally.
National Carbon Accounting Toolbox
A prototype, free NCAT enables users to estimate changes in greenhouse gas emissions
resulting from changes in land use management practices. The government provided
funding for further development of the toolbox ($16.1 million over four years) in its 2009
Budget. The new toolbox will feature a user‑friendly web interface that will combine
geographic information and satellite imagery, providing easy‑to‑use navigation tools
to locate activities in forests and on farms. During 2009–10, the toolbox was further
developed to include a new user interface and estimation capability for reforestation,
providing the platform for further development, including for the incorporation of other
land‑based activities.
Australian Climate Change Regulatory Authority
3
The Carbon Pollution Reduction Scheme Bill 2009 and the Australian Climate Change
Regulatory Authority Bill 2009 sought to establish ACCRA as an independent regulator
with responsibility for the National Greenhouse and Energy Reporting Act 2007
(NGER Act), the Renewable Energy (Electricity) Act 2000 and Renewable Energy
(Electricity) (Charge) Act 2000 (RET Acts) and the proposed CPRS.
In June 2009, Geoff Leeper was appointed as Deputy Secretary responsible for the
implementation of ACCRA. The department formed the ACCRA Group, incorporating
the Greenhouse and Energy Reporting Office Division (GEROD) and the new ACCRA
Establishment and CPRS Implementation Division, to set up the future regulator’s core
executive structure, personnel, governance, business architecture and processes and
ICT systems.
In January 2010, the department established the Stakeholder Support and Engagement
Division to support and educate the regulated community to voluntarily comply with the
legislation that ACCRA would administer. It was responsible for stakeholder engagement
and education, compliance monitoring and investigations and auditor management for the
existing NGER legislation as well as the proposed CPRS.
A shared services arrangement was being developed for the delivery of corporate services
to the department and ACCRA. Both agencies would have benefited from the improved
efficiency and potential savings achieved by a shared services arrangement.
A standard, best practice regulatory approach and a high‑level business model for ACCRA
were designed. Business process management principles underpinned the development
of processes and procedures and encouraged collaboration between policy and operating
areas of the department. The development of generic business processes was consistent
with the intent of the legislation to reduce the regulatory burden on stakeholders.
Best practice tools and methodology were applied to managing the complex projects that
needed to run concurrently and to produce the necessary capability for the organisation.
The five major programs of work were:
• market services
• assessment and allocations
• reporting and liability management
• participant management
• corporate support.

Blueprint and road map documents helped to explain the relationships between the
projects, and a project management office ensured a consistent approach to planning and
3
reporting on the progress of each project. Strong governance arrangements allowed senior
managers to respond quickly and effectively to risks and issues as they arose.
By 27 April 2010, 210 staff members were working on projects dedicated to the setting up
of ACCRA and the implementation of the CPRS (including supporting the GEROD while it
continued to operate as a regulator within the department).
The government’s announcement on 27 April 2010 that the CPRS would be delayed saw
activities in the last quarter of the year focus on knowledge capture and the redeployment
of staff. The department moved quickly to formalise, document and close all CPRS‑related
activities while transferring NGER activities into existing structures within the department.
A project team managed the formal closure of all projects, documenting the status of
projects and lessons learned and undertaking the end‑of‑project review.
Action has been taken to identify and leverage work undertaken on any ACCRA projects
that might benefit the department, particularly in relation to its new responsibilities for
energy efficiency programs.
The department in its review concluded that the ACCRA program was meeting its stated
objectives and that, had the legislation creating ACCRA been passed, ACCRA would have
been able to effectively carry out its regulatory responsibilities.
Climate Change Action Fund
The CCAF is a $1.97 billion program that was designed to smooth the transition to
a low‑carbon economy by helping businesses, community organisations, workers,
communities and regions to make energy efficiency and emissions efficiency improvements.
As the CCAF was an integral part of the CPRS package, it was suspended when the delay to
the CPRS was announced.
Assisting the transition to a low‑carbon economy
In 2009–10, the department worked closely with stakeholders to define 22 activities so that
data could be collected under the EITE assistance program. The department also provided
secretariat support to and consulted closely with the EITE Expert Advisory Committee,
which provided advice to the Minister for Climate Change, Energy Efficiency and Water
on the EITE assessment process and played a key role in overseeing the development of
the definitions.
On 9 December 2009, the department also released a second draft of the CPRS regulations,
3 implementing the EITE assistance program, for public comment. The 9 December release
incorporated amendments adopted as a result of public submissions to the first draft of the
CPRS regulations, and included the details of an additional 10 activities assessed as eligible
under the program. The department received 12 public and 11 confidential submissions on
those regulations. The department also developed regulations for the RET incorporating
all activities assessed as eligible to date, allowing eligible entities to apply for partial
exemption certificates under the RET.
In addition to the release of the second draft of the CPRS regulations, the department
updated and re‑released the explanatory paper Establishing the Eligibility of Activities
under the Emissions-intensive Trade-exposed Assistance Program, which provided
information on the further 10 activities eligible for EITE assistance.
In October 2009, the department released draft regulations outlining the information
required of electricity generators applying for a certificate of eligibility for assistance
under the ESAS. The department also developed policy and legislative amendments
to enable the modifications to the ESAS announced on 24 November 2009 to be
implemented. Legislative amendments included those to implement the low‑emissions
transition incentive to allow ESAS recipients to receive direct credit for replacing eligible
emissions‑intensive generation assets with new low‑emissions generation capacity.
The department also developed legislation to implement the CSAS to provide limited
transitional assistance for highly emissions intensive underground coal mines under the
CPRS. This scheme was part of the 24 November amendments to the CPRS Bill, and was
introduced in February 2010. The department consulted closely with the operators of the
most emissions intensive coal mines on technical details to be included in regulations to
support the CSAS.
National Greenhouse and Energy Reporting
In 2009–10, new and revised instruments, including amendments to the NGER Act,
regulations and determination in 2009–10, put in place a comprehensive framework for
greenhouse and energy audits under the Act. These changes were designed to ensure the
integrity of information reported to the Greenhouse and Energy Data Officer (GEDO) by
registered corporations.
The department also published information to help people better understand NGER.
This information is available on the department’s website at www.climatechange.gov.au.
Registrations were processed so that registered corporations could fulfil their reporting
obligations. Other statutory processes required by the legislation were also put in place.

As at 30 June 2010, 723 corporations were registered for NGER and a small number of
those were registered to begin reporting in future years.
3
The department undertook an extensive stakeholder outreach program to build
stakeholders’ awareness of their obligations under the NGER legislation for the 2008–09
and 2009–10 reporting years. Outreach activities included providing face‑to‑face briefings
to 350 corporations and 80 industry associations, training 1,000 individuals to use the
Online System for Comprehensive Activity Reporting (OSCAR), responding to more than
4,000 reporting queries received via email and telephone helplines, and developing five
industry‑specific reporting methodology tools in collaboration with industry associations.
The outreach program helped corporations to determine whether they had NGER
obligations and to fulfil their registration and reporting requirements.
A customer relationship management system was implemented to help track and manage
interactions with stakeholders.
On 26 February 2010, greenhouse gas emissions and energy consumption data from
233 corporations registered under the NGER Act who met the 125 kilotonnes carbon
dioxide equivalent threshold for the 2008–09 reporting year was published by the GEDO
on the department’s website.
A small number of corporations that met the publishing threshold for 2008–09 applied
under section 25 of the NGER Act to have some of their data exempted from publication.
All submitted NGER reports have been validated. A resubmission process put in place
by the department allows corporations to resubmit their NGER report if they believe
the report contains errors. Changes made to reports prior to the data being published in
February led to improvements in the quality of the data published by the department.
The department continued to develop the OSCAR online reporting tool in 2009–10. The
tool allows registered corporations to report their greenhouse gas emissions and energy
production and consumption electronically. Following the first year of reporting, OSCAR
has been updated to incorporate changes to the legislation and to improve functionality.
In 2009–10, the department commissioned the development of a disclosure tool to house
the greenhouse and energy data reported under the NGER Act. This tool will enable the
GEDO to disclose the greenhouse and energy data to other Australian Government and
state and territory agencies in a form that will allow them to use the data in their programs.
Arrangements with a number of Australian Government agencies to grant them access to
this tool were finalised in June 2010. The department is continuing to consult with all state
and territory governments to enable them to gain access to the disclosure tool.
The NGER audit function was also supported by the National Greenhouse and Energy
3 Reporting (Audit) Determination 2009, which sets out the requirements for greenhouse
and energy auditors to meet when preparing for, conducting and reporting on audits. An
online tool to enable greenhouse and energy auditors to apply for registration was made
available on 9 March 2010, and more than 100 greenhouse and energy auditor registration
applications were received to 30 June 2010. The department began processing those
applications and started work on developing audit and auditor management capabilities.
The department continued to work with other Australian Government and state and
territory agencies, as part of the COAG Experts Group on Streamlining Greenhouse and
Energy Reporting, to progress actions aimed at reducing the reporting burden on business.
Council of Australian Governments
The department has been working actively with jurisdictions and Commonwealth
stakeholders to ensure that streamlined program data is available through OSCAR.
The department also worked through the COAG Experts Group on Streamlining
Greenhouse and Energy Reporting to develop the NGER Streamlining Protocol, which
was released in July 2009. The protocol is a basis for governments to streamline reporting
requirements for greenhouse and energy programs and to establish a standard national
approach for collecting greenhouse and energy information.
National Greenhouse Gas Inventory
Parties to the United Nations Framework Convention on Climate Change (UNFCCC)
and its Kyoto Protocol are required to develop, update and publish national emissions
inventories of greenhouse gases on an annual basis. In line with UNFCCC requirements,
the department submitted Australia’s National Inventory Report 2008 to the UNFCCC
on 26 May 2010. The report contains national greenhouse gas emissions estimates for
the period 1990–2008. As this submission covers the first year of the Kyoto Protocol
commitment period, for the first time it also contains estimates for 2008 compiled using
the reporting rules applicable to the Kyoto Protocol along with supplementary information
required under article 7, paragraph 1 of the protocol.
The methodologies used to estimate Australia’s inventory have improved over time and will
continue to be refined as new information emerges and as international practice evolves.
Australia’s national inventory reports are subject to annual review by international experts.
A UNFCCC team of experts reviewed the inventory in September 2009 and found it to be of
high quality.

In addition to the National Inventory Report 2008, the department published the
following set of supporting emissions estimates that together constitute the Australian
3
National Greenhouse Accounts:
• the Australian National Greenhouse Accounts: National Greenhouse Gas Inventory—
Accounting for the Kyoto Target, May 2010, which provided estimates for the
December 2009 quarter as well as a summary of the Kyoto Protocol account
• an overview of the state and territory greenhouse gas inventories
• the Australian National Greenhouse Accounts: National Inventory by Economic Sector
2008, comprising emissions estimates by economic sector.
The department also publishes quarterly emission estimates for the national
inventory, providing industry and stakeholders with timely information on Australia’s
national emissions.
Feature:
3 Expanded Renewable Energy Target
In August 2009, parliament passed legislation to implement the Renewable Energy Target
(RET) scheme, designed to deliver on the government’s commitment to ensure that 20 per cent
of Australia’s electricity will come from renewable sources by 2020.
On 26 February 2010, the government announced changes to the RET scheme. From January
2011, the existing scheme will be separated into two parts: the Small‑scale Renewable Energy
Scheme (SRES) and the Large‑scale Renewable Energy Target (LRET). The changes will
enhance the scheme by:
• encouraging the deployment of large‑scale power generation using Australia’s abundant
renewable energy sources such as wind, solar, biomass and geothermal energy through
the LRET
• supporting households, businesses and community groups looking to play their part in the
move towards Australia’s low‑pollution future by installing renewable energy systems like
rooftop solar panels and solar hot‑water systems through the SRES.
During March and April 2010, the department consulted extensively with stakeholders on the
development of amending legislation to implement the changes. Around 120 submissions on
a discussion paper on the implementation arrangements for the enhanced RET were received.
On 24 June 2010 parliament passed legislation to implement the changes.
The department has also been working with states and territories to finalise the COAG Review
of Specific RET Issues. A report on the outcomes of the review is expected to be considered by
COAG in the second half of 2010.

Feature:
Australian Carbon Trust 3
In January 2010, the department registered the Australian Carbon Trust Limited under the
Corporations Act 2001 as a wholly owned Commonwealth company limited by guarantee. The
government is providing over $100 million to the trust through two programs that will support
action on climate change by businesses:
• By showcasing innovative energy efficiency activities across the private sector, the Energy
Efficiency Trust will demonstrate to businesses how they can make energy efficient
investments. The trust will bring together public and private seed funding, business skills
and culture and technical knowledge to encourage businesses to invest in energy efficiency
activities in commercial buildings and other business operations.
• The National Carbon Offset Standard Carbon Neutral Program will enable participating
organisations to certify either their organisation or products as carbon neutral.
On 24 March 2010, the Minister for Climate Change, Energy Efficiency and Water announced
the directors and management team of the Australian Carbon Trust. The department supported
the management team in establishing the trust’s head office in Brisbane and prepared a funding
agreement that sets out governance and reporting arrangements.
During 2009–10, the department undertook design work on the Energy Efficiency Savings
Pledge Fund, which was to be implemented by the trust. However, as the program was linked
to the CPRS, like other CPRS‑related activities, it was deferred following the announcement in
May 2010 that the CPRS would be delayed.
Feature:
3 NGER corporation emissions
The National Greenhouse and Energy Reporting Act 2007 requires corporations to provide
comprehensive data on their direct and indirect greenhouse gas emissions, energy consumption
and energy production. The data is at the source level, which means that organisations must
report, for example, the amount of emissions from the diesel fuel they use for transport.
Greenhouse gas emissions and energy data for corporations that meet the corporate greenhouse
gas emissions threshold is published by the end of February in the year following the year
in which they reported. For 2008–09, the data was published on 26 February 2010. Of the
702 corporations registered to report in 2008–09, the first reporting year, 666 had reported
by 30 June 2010. Data was published for the 233 registered corporations that met the National
Greenhouse and Energy Reporting (NGER) corporate threshold for greenhouse gas emissions.
The data can be used to understand many aspects of the Australian economy. For example, the
chart below shows the industry sector of the 100 corporations with the largest direct greenhouse
gas emissions. These 100 corporations represent 15 per cent of corporations that have reported,
covering over 90 per cent of the total direct emissions reported under NGER to date. The
corporation industry sector is based on the industry sector of the facilities that contribute most
to the corporation’s emissions.
In the chart, the blue crosses are the cumulative emissions measured against the right‑hand
axis. The emissions of individual corporations are indicated by the coloured shapes measured
against the left‑hand axis. This data was published in February 2010.
30,000 400,000
Corporation Scope 1 Emissions
Cumulative Scope 1 Emissions
350,000
25,000
300,000
(kilotonnes CO2-e)
(kilotonnes CO2-e)
20,000 Electricity, Gas, Water and

Waste Services 250,000
Mining
15,000 200,000
Manufacturing
150,000
10,000 Other
100,000
Cumulative
5,000
50,000
0 0
10 20 30 40 50 60 70 80 90 100
Number of Controlling Corporations
The detailed data provided allows a wide range of Commonwealth, state and territory
government agencies, and, in many cases, corporations, to better understand energy and
greenhouse gas issues.
400,000
350,000
300,000
250,000
72 Department of Climate Change and Energy Efficiency 2009–10 Annual Report 200,000
150,000
Table 1 shows performance information for the program.
Table 1 Program 1.1 performance
Key performance indicators 2009–10 results
Fixed price commencement of The department provided policy analysis and briefing to support the
the CPRS implemented by July government’s negotiations with the opposition in relation to the CPRS
2011, with the transition to full policy, and coordinated the legislative amendments to allow the
market trading from 1 July 2012 consideration of CPRS legislation in the spring 2009 and autumn 2010
sittings of the parliament.
The department released draft regulations on emissions units, the
Australian National Registry of Emissions Units, the EITE assistance
program and ESAS, and provided input into draft Corporations
Regulations relating to emissions units as financial products.
The CPRS legislation was defeated in the Senate in August and
December 2009. On 27 April 2010 the government announced it would
not introduce the CPRS until after the end of the current commitment
period of the Kyoto Protocol and would introduce it only when there
was greater clarity on the actions of other major economies, including
the USA, China and India.
NCAT developed and operational A test version of a new NCAT user interface and initial reforestation
for coverage of forestry estimation capability was established.
from 1 July 2010, before the
commencement of mandatory
obligations under the CPRS
Auction system established The department scoped and released tenders for an auction system
by 2010–11 for the sale and settlement system but, due to the deferral of the CPRS, the
and allocation of carbon tenders were cancelled and the system was not established.
pollution permits The department has documented these processes and guidelines in
anticipation of the implementation of a CPRS at a future date.
Appropriate systems and The department used a business modelling methodology to develop
processes established business processes and standard operating procedures for ACCRA.
for ACCRA Stakeholder support and governance activities were planned and
a shared services arrangement for corporate services was under
negotiation. Action for the procurement of ICT systems commenced.
These activities were discontinued with the decision to delay
the CPRS.
Business, industry and The CCAF was a part of the CPRS package of measures. With the
community organisations deferral of the CPRS, the CCAF has also been deferred.
assistance is targeted and
results in reduced energy use
3 Key performance indicators 2009–10 results
Accurate accounting and The National Greenhouse Gas Inventory 2008 was released in
projection of Australia’s May 2010.
greenhouse gas emissions level Updated projections of Australia’s greenhouse gas emissions were
consistent with requirements released in Australia’s Fifth National Communication on Climate
under the United Nations Change, submitted to the UN on 12 February 2010.
Framework Convention on
Climate Change
Industry national greenhouse A total of 75% of registered corporations submitted their report on time.
emissions and energy reporting These corporations represented 88% of direct (scope 1) emissions
deadline of 31 October 2009 met reported to date. Comprehensive communication activities were
undertaken to inform corporations of their NGER obligations, which
resulted in this high level of compliance.
A range of outreach activities were undertaken to encourage late
reporters to also fulfil their reporting obligations. Late reporting
corporations have continued to submit reports.
As at 30 June 2010, 95% of registered entities had reported. Further
engagement with corporations will be undertaken to aim to get the
remaining corporations to fulfil their NGER obligations.
The NGER Streamlining Protocol was released in July 2009.
Expanded Renewable Energy Legislation to implement the expanded national RET took effect in
Target (RET) implemented September 2009.
Amending legislation to implement the enhanced RET was passed in
June 2010.
Australian Carbon Trust Australian Carbon Trust Limited was registered on 14 January 2010
established by July 2010 under the Corporations Act 2001 as a wholly owned Commonwealth
company limited by guarantee.
In March 2010 the appointment of directors to the board and the
executive management team was announced.
ACCRA = Australian Climate Change Regulatory Authority, CCAF = Climate Change Action Fund, CPRS = Carbon
Pollution Reduction Scheme, NCAT = National Carbon Accounting Toolbox, NGER = National Greenhouse and Energy
Reporting, ESAS = Electricity Sector Adjustment Scheme, EITE = emissions-intensive trade-exposed, ICT = information
and communications technology; RET = Renewable Energy Target

Program 1.2: Improving Australia’s 3
energy efficiency
From 30 June 2009 to 7 March 2010, Program 1.2 was administered by the Department
of the Environment, Water, Heritage and the Arts (DEWHA). The program’s objective
(reported as Program 2.1: Energy Efficiency and Climate Change in the DEWHA 2009–10
Portfolio Budget Statement) was to provide a leadership role in the Commonwealth’s
energy efficiency policy and program agenda by:
• assisting Australians transition to a low‑carbon economy by leading practical action
to tackle climate change working in partnership with governments, industry and the
community. We are responsible for developing policy advice and delivering on a broad
range of climate change programs complementary to the CPRS
• focusing, in particular, on achieving greater energy efficiency in our homes, small
and medium‑sized businesses, local governments and community organisations, and
on community and household education. We pursue carbon emission reductions by
working with industry to improve understanding of climate change issues and to drive
emissions abatement measures
• continuing to assess trends and policy gaps in energy efficiency to advise government on
how best to address emerging issues
• through policy advice and program delivery, facilitating Australian households and
small to medium‑sized businesses having access to a comprehensive set of measures to
assist their adjustment to a low‑carbon future
• providing for greater energy efficiency of Australia’s existing and newly constructed
stock of commercial and residential building, ensure Australia represents world’s best
practice in energy efficiency of appliances and equipment and position government
operations to lead by example
• facilitating access by the community, industry and other stakeholders to relevant and
current information on energy efficiency to enable an effective response to climate
change in a carbon‑constrained economy.
Following the machinery of government changes, the program was moved to the
department on 8 March 2010, where it became Program 1.2: Improving Australia’s energy
efficiency. With machinery of government changes in a reporting period, the established
practice is that the gaining department reports on the function for the entire reporting
period. The department is therefore reporting on the performance of the program (with the
exception of the hazardous chemicals component, which remains with DEWHA) for the full
2009–10 financial year.
Since 8 March, the new department has been responsible for improving Australia’s energy
3 efficiency by working in partnership with governments, industry and the community to
deliver improved energy efficiency and greater use of renewable energy. The department
has also been working to efficiently and effectively close the Home Insulation Program
(HIP) by managing ongoing risks, mitigating stakeholder concerns and pursuing
non‑compliance and fraud incidents.
Renewable Energy Bonus Scheme—Solar Hot Water Rebate
On 19 February 2010 the Australian Government announced the Renewable Energy
Bonus Scheme—Solar Hot Water Rebate, to assist households to adopt climate‑friendly
technologies and to save money on power bills.
This new scheme replaces the Solar Hot Water Rebate Program Energy Efficient Homes
Package, which was discontinued as of close of business on 19 February 2010. The
Renewable Energy Bonus Scheme—Solar Hot Water Rebate offers households $1,000 for
eligible solar hot‑water systems and $600 for heat pump systems.
During 2009–10, the government paid 122,689 rebates totalling $187,353,800 under the
Energy Efficient Homes Package Solar Hot Water Rebate and the Renewable Energy Bonus
Scheme—Solar Hot Water Rebate.
A total of 169,853 rebates have been paid since September 2007. This represents
a total government investment of $244 million in energy efficiency and renewable
energy measures.
Due to the level of demand experienced under both solar hot water rebate programs,
the department has faced some challenges in meeting payment timeframes. These
problems have been addressed by streamlining administrative processes and increasing
staffing levels.
Solar Homes and Communities Plan
Established in 2007, the Solar Homes and Communities Plan provided rebates to
households and community groups who purchased and installed a solar power system. The
plan offered a rebate of up to $8,000 for households (based on a rate of $8/watt) and up to
half the cost of a system installed in buildings designated for community use (capped at the
first 2 kilowatts).

Access to a rebate under the Solar Homes and Communities Plan requires that the solar
power system be installed by an installer accredited by the peak industry body, the Clean
3
Energy Council. Across Australia, there are currently more than 2,000 accredited installers
listed with the Clean Energy Council.
On 9 June 2009, the government announced the closure of the Solar Homes and
Communities Plan and the decision to replace this rebate program with a new ‘Solar
Credits’ scheme for systems installed from that date onwards. Under Solar Credits,
households, community groups and businesses are accessing up‑front cost reductions for
the installation of photovoltaic systems through Renewable Energy Certificates.
In 2009–10, the government invested $693 million through the Solar Homes and
Communities Plan.
In total, the Solar Homes and Communities Plan has funded more than 110,000 solar
power system installations across Australia. As of 28 July 2010 there were approximately
10,000 outstanding installations to be completed. It is expected that funding for all
installations under the program will be finalised by April 2011.
National Solar Schools Program
The National Solar Schools Program commenced on 1 July 2008 and finishes on
30 June 2015.
The program offers eligible primary and secondary schools grants of up to $50,000
(up to $100,000 for eligible multi‑campus schools) to install solar and other renewable
power systems, solar hot‑water systems, rainwater tanks and a range of energy efficiency
measures. The program has been extremely popular, with more than 5,600 schools
(60 per cent of all eligible schools) having already registered to participate.
Since the National Solar Schools Program commenced, more than $116 million in grant
funding has been paid, which is assisting over 2,600 schools to take practical action to
combat climate change.
Demand for funding under the program has been very high, and by late 2009 enough
claims had been received to meet the program’s full budget appropriation for 2009–10.
As a result, on 15 October 2009, the program was temporarily suspended. The program
reopened in July 2010, when schools were able to apply for the 2010–11 funding round.
All claims submitted to the department by the time the program was suspended, and which
met the program’s usual eligibility requirements, were processed and paid in 2009–10.
Total grant funding of just over $79 million was paid to more than 2,300 schools in
3 2009–10. Grant funding included direct payments to individual government and
non‑government schools, as well as payments to state government agencies in New South
Wales, Queensland, Victoria, Western Australia and South Australia under arrangements
to cooperatively deliver funding to government schools in those jurisdictions.
Green Loans Program
Prior to the machinery of government changes announced on 8 March 2010, the Green
Loans Program was administered by DEWHA. The Green Loans Program commenced with
a national rollout on 1 July 2009. The program had three main components:
• a free home sustainability assessment and report (the home sustainability assessments
provide advice to households on ways to improve energy and water efficiency and
reduce greenhouse gas emissions)
• a Green Rewards Card to the value of $50, to be provided to all households who
participated in a home sustainability assessment
• access to interest‑free finance through a subsidy provided to partnering financial
institutions for loans of up to $10,000 over a maximum period of four years to
assist households to implement changes recommended in the home sustainability
assessment report.
The experience of the first six months of the program led the government to announce
significant changes on 19 February 2010. These changes included an additional
600,000 free home sustainability assessments, on top of the 360,000 assessments already
available under the program, and a discontinuation of the loans component of the program
from 22 March 2010.
The key objectives of the program were to:
• encourage wide‑scale improvement of energy and water efficiency in existing homes
• provide sound advice to households on the most appropriate actions to reduce the
environmental impact of operating their home
• reduce annual greenhouse gas emissions.
An additional $102.7 million in funding was announced as part of the 2010–11 Budget,
bringing the total program budget (administered funds) to $259.407 million. The
additional funding is directed to delivering:
• additional home sustainability assessments
• improved performance in call centre operations
• an expanded audit and compliance program.

Also as a part of the budget, the government announced that the Green Rewards
component of the program would cease as of 11 May 2010. The announcement meant
3
that only households that had a home sustainability assessment completed on or prior to
11 May 2010 would be eligible for a $50 Green Reward.
A number of reviews and inquiries into the Green Loans Program have identified that
the rollout of the program was characterised by a widespread lack of compliance with the
principles, guidelines and regulations relating to procurement; a lack of probity; breaches
of the Financial Management and Accountability Act 1997 and the Financial Management
and Accountability Regulations 1997; and significant shortcomings in a number of specific
program arrangements. For more information, see ‘Independent reviews’ in Section 4.
Since taking over responsibility for administration of the program, the department
has invested significant resources to address these issues and has made substantial
improvements in areas such as clearing the backlog of assessment reports, payment
processing times, and call centre performance, and has also procured audit and compliance
services for the program. The department’s response to the Faulkner Inquiry outlines a
number of steps that it is taking to address the shortcomings identified in these reports.
The department’s response is summarised in the feature article ‘Hawke Review of the
Home Insulation Program and Faulkner Inquiry into the Green Loans Program’ on page 41
in Section 2.
On 8 July 2010, the government announced that, following consideration of the range
of issues highlighted in these reviews and inquiries, the Green Loans Program would
be phased out in the coming months and that it would transition to the new Green
Start program.
On 23 April 2010, the department signed a contract with AECOM Australia Pty Ltd for
audit services (desktop and site based) to support the Green Loans Program. The AECOM
contract was established to strengthen audit measures in order to minimise potential cases
of non‑compliance activity under the Green Loans Program. The contract provides for a
combination of desktop and site‑based audit services prioritised in accordance with the
three key areas of concern: assessor organisations, individual assessors and green loans
recipients. Audit program establishment occurred immediately following the signing of
the contract, with targeted audit activity commencing in June 2010 and continuing until
March 2011.
As at 30 June 2010:
• approximately 335,000 free home sustainability assessments had been completed
• participating financial institutions reported that 7,381 interest‑free loans had
been approved.
3
The HIP commenced in 2009 in the context of the global financial crisis and was intended
to deliver both an immediate economic stimulus and also energy efficiency gains.
The main phase of the HIP (HIP Phase 2) ran from 1 July 2009 until 19 February 2010
and was administered by DEWHA. Under HIP Phase 2, rebates were paid directly to the
installer rather than (as under HIP Phase 1) the householder. During Phase 2 a number of
other changes to the program were made:
• Installer competencies and training requirements were increased.
• An audit and compliance framework was implemented by DEWHA and managed by
Medicare Australia.
• The rebate amount was reduced.
During this period more than 1.1 million installation rebates were paid valued at
$1.5 billion.
The program generated jobs at a time when unemployment was projected to rise
substantially. Effective insulation of homes will also provide positive environmental
benefits on a continuing basis while improving comfort for residents.
However, some houses with insulation installations funded through HIP have experienced
safety issues and there were four deaths amongst the employees of installation companies.
These matters contributed to the decision to terminate HIP on 19 February 2010.
Following the machinery of government changes announced on 8 March 2010,
responsibility for HIP and other energy efficiency programs was transferred to the
department. The Review of the Administration of the Home Insulation Program, conducted
by Dr Allan Hawke, AC, was released on 6 April 2010. For further details refer to the
feature article on page 41 in Section 2.
In April 2010, the government announced the Home Insulation Safety Plan to address
the safety concerns associated with HIP and to restore public confidence in the insulation
industry. Funding provided initially for HIP was transferred to cover the costs of this plan.
The Home Insulation Safety Plan has four key elements:

• Foil Insulation Safety Program—consistent with safety advice received from the
electrical regulators and industry bodies, the Australian Government will fund the
removal of foil insulation or, alternatively, the installation of safety switches for the
50,000 houses fitted with foil insulation under HIP.
• Home Insulation Safety Program—funds the inspection of at least 150,000 homes with
non‑foil insulation installed under the program.

• Insulation Industry Assistance Package—the industry assistance component of the
Home Insulation Safety Plan that aims to provide assistance to ceiling insulation
3
businesses (for example, installers, manufacturers and importers) that were adversely
affected by the termination of the HIP.
• Strong fraud and compliance measures—the closure of the HIP requires finalisation
of a number of legacy issues arising from that program which include processing and
payment of valid invoices and claims for payment, managing legal claims or actions
arising and taking appropriate remedial action after conducting an independent
forensic audit.
As at 30 June 2010, the initial implementation of the Home Insulation Safety Plan had
resulted in:
• 1,237 of all houses with foil insulation being inspected, with the foil removed or safety
switches installed under contract with PwC—this built on the interim arrangements
where householders contacted electricians for an inspection (by the end of the financial
year, 18,103 claims were paid by the department from a total of 23,934 claims received)
• approximately 39,700 inspections completed for houses with non‑foil insulation
(39,436 by 27 June 2010)
• agreements in place with service providers to inspect a minimum of 150,000 houses
with non-foil insulation installed
• agreements for the removal of foil insulation
• completion of many of the closure activities in relation to HIP, including processing and
payment of valid invoices and claims for payment.
National Strategy on Energy Efficiency
In July 2009 COAG agreed to a comprehensive 10‑year National Strategy for Energy
Efficiency (NSEE) to accelerate energy efficiency improvements and deliver cost‑effective
energy efficiency gains across all sectors of the economy. The NSEE aims to streamline
roles and responsibilities across government by providing a nationally consistent and
coordinated approach to energy efficiency.
The NSEE targets cost‑effective energy efficiency opportunities in commercial and
residential buildings, appliances and equipment, industry and business, government,
transport, skills, innovation, advice and education.
There are 37 measures in the NSEE, each of which relates to one of the following four
3 key themes:
• measures assisting households and businesses to transition to a low‑carbon future by
providing material assistance as well as the information and skills necessary to improve
the efficiency of energy use
• measures reducing impediments, such as information failures and split incentives, to
the uptake of energy efficiency
• measures to make buildings more efficient (energy consumption in buildings accounts
for approximately 20 per cent of Australia’s greenhouse gas emissions, split equally
between commercial and residential buildings)
• measures to provide for governments to work in partnership and to lead the way
on energy efficiency (improving the energy efficiency of government operations will
contribute to reducing Australia’s energy consumption and will also demonstrate
leadership and encourage wider community acceptance of management tools and other
efforts to increase the efficiency of energy use).
The implementation of measures under the NSEE is progressing, assisted by the Australian
Government’s commitment of $64.6 million towards the implementation of key early start
measures relating to buildings and appliances.
In 2009–10, the department provided leadership of the intergovernmental Senior Officials
Group on Energy Efficiency to support the delivery of the NSEE.
Appliances and equipment

Energy consumed by appliances and equipment is a major source of greenhouse gas
emissions. Improving the energy efficiency of appliances is a key objective for all Australian
governments and the New Zealand Government. The main policy tools used to achieve
these outcomes through the joint Australian and New Zealand Equipment Energy
Efficiency (E3) Program are minimum energy performance standards (MEPS) and energy
efficiency labelling.
Some significant measures were implemented during 2009–10 which are likely to
constrain green house gas emissions over time. These included increasing the Energy
Rating Label from six to ten stars from 1 April 2010 for selected appliances, as well as more
stringent MEPS; mandatory energy rating labelling and MEPS for televisions in October
2009; voluntary energy rating labelling for swimming pool pumps; and the adoption of a
voluntary code of conduct for selected Pay TV providers to improve the energy efficiency of
pay TV set‑top boxes that include a recording function.
In November 2009, the sales restriction of inefficient incandescent lamps used for general
lighting purposes was brought in following the import restriction of 1 February 2009.
MEPS were also applied at point of sale to compact fluorescent lamps and extra low voltage

halogen non‑reflector lamps in order to ensure that efficient and high‑quality lamps are
available in the Australian market.
3
Another key measure aimed at reducing greenhouse emissions is the phase‑out of
greenhouse‑intensive water heaters. The department is working collaboratively with
the states and territories to phase out electric hot‑water heaters. In 2008, electric water
heating represented 21.5 per cent of all residential sector electricity consumption. The
proposed phase‑out of electric hot‑water services will save about 30 million tonnes of
greenhouse gas emissions over 10 years—the equivalent of taking more than 750,000 cars
off the road over 10 years. Queensland and South Australia have commenced Stage 1. The
consultation regulation impact statement for the phase‑out was released during 2009–10.
Work is now progressing to finalise the regulation impact statement for ministerial
approval. In June, comprehensive plumber training material was produced to help improve
the skills base of plumbers in installing heat pump and solar hot‑water systems.
The department is also leading the development of new national legislation for equipment
energy efficiency standards and labelling. The legislation will streamline governance
arrangements and regulatory processes, simplify compliance and enforcement
responsibilities for all stakeholders and ensure consistency across all Australian
jurisdictions. A key element of the legislation will be to allow for greenhouse and energy
minimum standards that ensure greenhouse benefits as well as energy savings are factored
in when standards are set.
Building framework
Under the NSEE, Australian governments have committed to develop an outcome‑based
National Building Energy Standard‑Setting, Assessment and Rating Framework.
A sound framework will enable industry, the community and governments to plan,
adapt, support excellence in design and innovation, and reduce market barriers to future
improvements in the energy efficiency of buildings and other elements related to the
sustainability of Australia’s building stock. This is to be achieved through improved
national consistency in the assessment and rating of buildings, and by setting a pathway for
minimum performance standards over time for new buildings. The framework is to apply
to both new and existing residential and non‑residential buildings.
During 2009–10 the department worked closely with state and territory officials in the
development of the framework. A public discussion paper was released for consultation in
March and a series of forums were held throughout the country to encourage stakeholder
feedback. As a result of this process, 105 submissions on the framework were received. In
addition, targeted stakeholder workshops were held with an expert reference group and
an industry consultative forum. Development of the framework within governments and
through stakeholder consultation will continue in 2010–11.
Commercial buildings
3
Commercial Building Disclosure (CBD) is a national program designed to improve the
energy efficiency of Australia’s large office buildings.
The CBD program is established by the Building Energy Efficiency Disclosure Act 2010.
Under the CBD program, most sellers or lessors of office space of 2,000 square metres or
more are required to disclose an up‑to‑date building energy efficiency certificate if they
wish to sell, lease or sublease that office space, and to include an energy efficiency star
rating in any advertisement for the sale, lease or sublease.
The CBD program provides the office market with access to consistent and meaningful
information about a building’s performance. This makes it easier for companies to buy
or rent more energy efficient office space. It creates a strong market‑based incentive for
owners to improve their properties with cost‑effective energy efficient upgrades that will
increase their return on investment. The government will consider expanding the program
to cover other building types (such as hotels, shopping centres and hospitals) from 2012.
In addition to the major changes affecting the existing commercial building stock, advances
in the performance of new commercial buildings have been successfully implemented
through enhanced energy efficiency provisions within the 2010 Building Code of Australia.
The new measures are more stringent across a broad range of design elements, and include
a shift in focus from energy efficiency alone to address the importance of greenhouse
gas savings. As a result of these policy developments, new commercial buildings will be
characterised by substantially improved solar passive design and reduced reliance upon
greenhouse intensive energy sources.
Research has also been undertaken to identify commercial building areas with potential for
cost‑effective energy and greenhouse savings. Important information emerging from this
work relating to key building elements such as lifts and lighting systems, or the impact of
particular industry sectors, will form the basis for future policy efforts in this area.
Residential buildings
In July 2009, COAG agreed to introduce (subject to the outcome of a regulatory
impact analysis) a scheme requiring owners of existing houses, flats and apartments to
provide energy, water and greenhouse performance information when selling or leasing
their properties.
This will provide valuable information to prospective homebuyers and tenants, and to
home owners themselves, about the performance (efficiency and running costs) of a home,
encourage the real estate industry to factor in these ongoing running costs, and encourage
improvements to design and construction.

During 2009–10, the department worked closely with state and territory officials on the
development of scheme options, including examining what information would be required
3
from homes, how homes should be assessed and rated, and how the scheme should be
regulated. Input from a range of sources has guided the policy options, and further detailed
consultation with industry and the Australian community is planned for 2010–11. The
timing for the commencement of the scheme remains to be determined and is a matter for
individual state and territory governments.
It is noteworthy that the Australian Capital Territory has required existing homes to
provide energy efficiency information to buyers and renters since 1999, and research into
the success of the ACT’s scheme has shown that—as reflected in the house values—people
value homes with a higher energy efficiency rating.
As in the case of commercial buildings, residential buildings have been subject to changes
in energy efficiency legislation delivered through the 2010 edition of the Building Code
of Australia. These recent measures will result in a requirement for increased thermal
efficiency for new residential buildings to a minimum 6‑star standard (from the previous
5‑star requirement). Increasing the minimum energy efficiency standard for residential
buildings will lead to potential energy cost savings for householders over the lifetime of
each new building together with reduced environmental impacts. For the first time, the
Building Code also contains measures to ensure a minimum level of energy efficiency for
residential lighting and hot‑water systems. The new measures should result in significant
energy and greenhouse savings.
An increasingly important factor in the delivery of energy efficiency gains in the residential
building sector has been the use of software modelling tools as part of the Nationwide
House Energy Rating Scheme. The scheme is administered by the department and
collaboratively governed in partnership with the states and territories. The past year saw
significant research effort applied to support the ongoing improvement of the software
tools underpinning this scheme. The analysis that supports the software ensures that new
and innovative technologies and design strategies can be incorporated into our buildings so
that there are significant energy efficiency gains in the longer term.
Solar Cities
The Solar Cities program is assisting in changing the way individuals, communities,
businesses and governments think about and use energy. It is a partnership approach that
involves all levels of government, the private sector and the local community. Each Solar
City is established by a consortium, made up of a range of different organisations.
The program provides a low‑risk environment to demonstrate the benefits or otherwise
of cost‑reflective electricity pricing, electricity load management, concentrated uptake of
photovoltaics, energy efficiency and smart metering technologies. The results are helping
3 inform future energy and energy efficiency policy, and the lessons and benefits resulting
from Solar City projects are already being implemented more broadly by industry across
several jurisdictions.
By providing tailored energy advice and driving behaviour change campaigns, the program
is helping households and businesses understand their energy bills and implement energy
efficiency measures. For example, in the first two years of the Blacktown Solar City project,
participants achieved a combined saving of just over $1 million on their electricity bills.
Building infrastructure to meet increasing demand for energy adds to electricity prices. By
using solar technologies and rolling out simple ways to save energy, Solar Cities models
alternatives to building more fossil fuel power plants and costly electricity infrastructure.
Townsville Queensland Solar City trials on Magnetic Island cut peak electricity demand on
the island by 22 per cent. As a result, an additional electricity cable expected to be required
in 2008 is now not expected to be needed until 2015.

Feature:
Newcastle
Feature: to demonstrate Australia’s
Smart Grid, Smart City 3
On 7 June 2010, Senator the Hon Penny Wong, the Minister for
Climate Change, Energy Efficiency and Water, announced that a
consortium led by EnergyAustralia would deliver the National Energy
Efficiency Initiative Smart Grid, Smart City demonstration project.
The government committed up to $100 million in the 2009 Budget to
deploy Australia’s first fully integrated, commercial‑scale smart grid
in partnership with the energy sector. The project will gather robust
information about the costs and benefits of smart grid technologies
and applications to inform decisions by government, electricity
providers, technology suppliers and consumers across Australia.
A smart grid is a modernised electricity grid that efficiently manages
electricity supply and demand and enables communication between
the power plant and the power point. EnergyAustralia will work with
consortium members IBM Australia, AGL, GE Energy, TransGrid,
Newcastle City Council, the CSIRO and the New South Wales
Senator the Hon Penny Wong with Government to demonstrate a range of smart grid technologies and
Mr Adrian Clark (EnergyAustralia, applications. The city of Newcastle will be the main demonstration
Manager Smart Grids) at the
CSIRO Energy Technology
site, with parts of the trial to be conducted in Scone, Homebush,
Centre, Renewable Energy Ku‑ring‑gai and the Sydney central business district.
Integration Facility
Around 50,000 consumers, including both businesses and
households, will participate in the project. Participants will be able to
monitor their real‑time electricity usage through customer applications such as advanced in‑home
displays or web portals. They will also be able to manage and program intelligent appliances, like air
conditioners or heaters, to conserve energy or run on off‑peak power.
Smart Grid, Smart City will also trial a range of grid‑side applications.

Over 10,000 sensors and monitors sense faults on the electricity system
and allow a degree of ‘self‑healing’ through re‑routing of supply. The
project will explore ways to better integrate renewable energy sources,
such as solar and wind power, including where there are extremely high
amounts of renewable energy being generated in a specific location.
Electric vehicle trials in Sydney and Newcastle will test battery storage
and smart charging points in public areas to help understand the impact
of large numbers of electric cars on the whole electricity system as well
as how electric vehicles may be able to be used as a form of backup
supply. A range of other battery storage systems will also be trialled to
see how storage technologies may provide extra electricity to supply
power during peak periods or as a backup during power outages.
Senator the Hon Penny Wong
The Smart Grid, Smart City project will demonstrate how smart announces the successful Smart
grid technologies and applications can improve network reliability, Grid, Smart City consortium
deliver environmental and economic efficiencies, and drive consumer
behaviour. Australia will showcase world’s best practice by integrating
grid technologies with active customer involvement and will test whether smart grids can reach their
enormous potential to improve the efficiency of our electricity sector and transform the way we use
energy in our homes and businesses.
Feature:
3 Greening Australia and the Solar Homes and
Communities Plan
In February 2010, Greening Australia, one of
the largest not‑for‑profit organisations in the
country, installed a photovoltaic system on its
South Australian greenhouse. The greenhouse
is used to grow plants for plots that Greening
Australia provides to local residents with
limited or no space for gardens of their own.
The greenhouse is also used to grow
Australian native plants for revegetation,
which combats salinity, declining water
quality, biodiversity loss, erosion and
soil degradation.
Mark Anderson on the roof of Greening Australia’s greenhouse
Through the Solar Homes and Communities
Plan, the Australian Government provided funding to assist Greening Australia which, in turn,
increased public awareness by public demonstration of the benefits of renewable energy and
how photovoltaic systems work.
Over the course of the Solar Homes and Communities Plan, the government will have provided
over 110,000 photovoltaic rebates towards home and community installations. The Solar
Homes and Communities Plan encourages the long‑term use of photovoltaic technology to
generate electricity from sunlight and to increase the use of renewable energy in Australia.
The key objectives of the program are to:
• reduce greenhouse emissions
• assist in the development of the Australian photovoltaic industry
• increase public awareness of renewable energy.
The program provides rebates to home owners who install photovoltaic power systems at their
principal place of residence, and grants to community organisations that install photovoltaic
power systems for educational purposes.

Online portal—LivingGreener.gov.au
3
The objective of LivingGreener.gov.au is to provide an online portal for Australians that
helps them to find, navigate and act on Commonwealth, state and local government energy,
water, waste and personal transport efficiency information and programs via the internet.
LivingGreener.gov.au was created through a process of user‑centred design to meet
the researched needs of Australians. It is enabling greater uptake of energy efficiency
opportunities by providing information in clear and simple language and in a way that is
easy to find, read and navigate.
Stage 1 of LivingGreener.gov.au was launched on 21 August 2009. The initial release of
the site focused on key federal initiatives. Stage 2 went live in two stages. The first, which
started on 26 February 2010, incorporated information about energy and water rebates
and assistance from states and territories; the second, which started on 18 June 2010,
provided added information about how to reduce waste and travel smarter.
Further stages—including a mechanism for Australians to share their stories, information
for businesses and schools, and enhanced functionality—will follow in the 2010–11
financial year. The department plans to continue to develop content and add functionality
to the site.
Significant engagement with and commitment from all tiers of government is required
to ensure success. The project has therefore developed an online intergovernmental
collaboration tool, the LivingGreener Collaborative Community (LGCC), using an
open‑source social networking framework. The LGCC enables jurisdictions to easily work
with the LivingGreener team to ensure that their programs are included on the site in a
collaborative manner. The LGCC is being used to approve content for state and territory
information and will be further expanded over time.
Renewable Remote Power Generation Program

On 22 June 2009, new applications under the Renewable Remote Power Generation
Program closed in all states and territories except Western Australia, where it closed
on 17 December 2009. The program supported more than 9,000 rebates for household
and medium‑scale installations, 31 major projects and a suite of industry support
projects designed to develop industry capacity to deliver in remote Australia. More than
170 installations were made in remote Indigenous communities, bringing the health and
economic benefits of a reliable, continuous power supply.
The program aimed to increase the uptake of renewable energy systems in remote areas.
Greenhouse gas abatement was not the primary objective of the program. Rather, the
program recognised the direct benefits of renewable energy to remote communities reliant
on fossil fuels for electricity generation. These benefits include having a reliable energy
3 supply which is cost effective through the life of the system; a source of energy that is free
from local noise and air pollution; and freedom from price variability and the transport
costs associated with fossil fuels.
Performance report for Program 1.2

Table 2 sets out the deliverables and key performance indicators for Program 1.2 when
it was Program 2.1 in the Department of the Environment, Water, Heritage and the Arts
(from 1 July 2009 to 7 March 2010) and for the Department of Climate Change and Energy
Efficiency (from 8 March to 30 June 2010).
The deliverables and key performance indicators for the program from 1 July 2009 to
7 March 2010 are taken from the Department of the Environment, Water, Heritage and the
Arts 2009–10 Portfolio Budget Statements (pp. 47–49).
The deliverables and key performance indicators for the program from 8 March to
30 June 2010 are taken from the Department of Climate Change and Energy Efficiency’s
2010–11 Portfolio Budget Statements (pp. 25–27).
The department’s 2010–11 Portfolio Budget Statements set out comprehensive deliverables
and key performance indicators for Program 1.2, covering the Home Insulation Program
and renewables and energy efficiency initiatives. Where possible, the department’s
performance has been reported in the ‘Analysis of performance’ section of this section or in
Table 2 below.
Detailed reports against the 2010–11 Portfolio Budget Summaries will be in the 2010–11
Department of Climate Change and Energy Efficiency Annual Report.

3
DEWHA (1 July 2009 to 7 March 2010) 2009–10 2009–10
DCCEE (8 March 2010 to 30 June 2010) expected results
Deliverables
To support Australia’s transition to a carbon-constrained economy (1 July 2009
to 7 March 2010)
Rebates for energy efficiency programs (number)

Home Insulation Program 900,000 1,135,555
Low Emissions Assistance Plan for Renters 358,000 0a
Renewable Remote Power Generation Program 3,500 2,950
Solar Homes & Communities Plan 30,375 76,178b
Solar Hot Water Rebates 120,000 122,689
Total 1,411,875 1,337,372
Non-rebate small-scale renewable energy and energy efficiency

installations (number)
Total 52,142c 4,186d
Community and major renewable energy or energy efficiency projects

(number)
Total 110 134
Capacity building initiatives or renewable energy and energy efficiency

initiatives (number)
Total 2,597 11,343
Education initiatives and communication and industry engagement

initiatives on renewable energy and energy efficiency (number)
Total 507e 334,026f
Additional product classes covered by new or updated MEPS (number)

Total 6 6
Additional product classes covered by new or revised energy labelling

(number)
Total 3 3
Notes to reviewers:
a In 2009 the government closed the Low Emission Assistance Plan for Renters (LEAPR) due to slower than expected
demand. At the same time, it decided to allocate $130.0 million from unexpended LEAPR funds for use in the Green Start
Program, to assist low income and disadvantaged households to improve their energy and water efficiency.
b Demand for the Solar Homes and Communities Plan was much greater than originally expected.
c This indicator may have anticipated the use of loans subsidised under the Green Loans Program to install energy
efficiency products however Green Loans did not specifically fund installations.
d This total represents the number of schools that have received a grant under the Green Vouchers for Schools/National
Solar Schools Program and the number of installations funded under the Solar Cities program
e This number was incorrectly reported in the 2009-10 PBS as being 509. The correct number is 507.
f Demand for the Green Loans program was significantly greater than expected. Unit of measure for 2009-10 results is
home sustainability assessments.
3 DEWHA (1 July 2009 to 7 March 2010) 2009–10 2009–10
DCCEE (8 March 2010 to 30 June 2010) expected results
Key performance indicators
Amount of energy efficiency products taken up ($ million)

Total 2.123 2.091
Amount invested in renewable energy, energy efficiency and capacity

building ($ million)
Green Loan 316.0 133.6
Green Vouchers for Schools/National Solar Schools Program 27.8 79.1
Renewable Remote Power Generation Program 50.0 48.6
Solar Cities 5.5 9.6
Solar Homes & Communities Plan 285.0 693.1
Total 684.3a 964.0
Accessed information and education material (number of millions)

Total 6.1 0.375b
Renewable energy generated (megawatts)

National Solar Schools Program 3 9.2
Renewable Remote Power Generation Program 6 6
Solar Cities 1 2
Solar Homes & Communities Plan 49 146
Total 59 163.2
Notes to reviewers:
a The total amount expected to be invested in 2009–10 should read $684.3 million, not $628.3, as reported in the
2009–10 PBS. Amounts relating to Solar Cities ($5.5 million) and the Renewable Remote Power Generation Program
($50 million) were incorrectly omitted from calculation
b In 2009 the government closed the Low Emission Assistance Plan for Renters due to slower than expected demand.

3
In 2009–10, the Adaptation, Land and Communications Division of the department
contributed to Program 1.3: Adapting to climate change, by:
• developing a comprehensive national approach to climate change adaptation policy
• promoting a dialogue on the national requirements for effective coastal adaptation
• researching the nature, timing and likely impacts of climate change and identifying
strategies for adaptation responses
• implementing climate change science activities.
Program 1.3: Adapting to climate change, was Program 1.2 in the department’s 2009–10
Portfolio Budget Statements. It became Program 1.3 with the Administrative Arrangements
Order change of 8 March 2010.
Australia faces a stark fact—the opportunity to avoid climate change altogether has passed.
Efforts to achieve significant reductions in global greenhouse gas emissions are aimed at
minimising the extent of climate change and trying to avoid the emergence of dangerous
climate change. But our climate will continue to change even if the world achieves a
significant reduction in greenhouse gas emissions.
Adapting to the impacts of unavoidable climate change is critical to any effective climate
change response. Adaptation to climate change is one of the three pillars on which the
government’s comprehensive climate change strategy is built.
Developing and coordinating adaptation policy
In 2009–10, the department played a leading role in work to elaborate the public policy
approach to climate change adaptation and coordinated the approach to adaptation across
Australian Government agencies.
The department worked across government to develop Adapting to Climate Change in

Australia, a government position paper that sets out the Australian Government’s vision
for adaptation and the government’s role in promoting that vision.
In order to promote the government’s policy of embedding climate change adaptation in all
relevant policy development, program delivery and asset management, the department has
established an Australian Public Service (APS) adaptation network to build relevant skills
and knowledge across the APS.
Work began on the initial Climate Futures report, the first in a series of five‑yearly reports
3 that will evaluate how effective Australia’s collective adaptation efforts are. An independent
expert group comprising Professor Will Steffen (chair), Dr Andrew Ash, Mayor Paddi
Creevy, Professor Sue Richardson and Ms Sam Mostyn has been appointed to advise on
development of the report.
The department is working with officials from states and territories to prepare a possible
national adaptation agenda for COAG consideration.
Building adaptation capacity
The National Climate Change Adaptation Research Facility, established by the Australian
Government in 2007, continues to make a contribution to building the knowledge base
on which adaptation decisions will be based. In 2009–10, the facility finalised six national
adaptation research plans that identify research priorities, and provided advice on filling
knowledge gaps identified in the plans. In line with these research plans, the department
has invested $4.5 million in targeted research projects.
The facility has established eight adaptation research networks to harness and build
capacity across universities and other research institutions around Australia. These
networks now have over 3,000 members, who are supported by web tools and regular
newsletters and workshops.
In line with the original terms of establishment of the facility, consultants were
commissioned by the department to perform a review of the operations of the facility
during its first two years. It confirmed the importance of the mission of the facility, and it
made recommendations on steps to strengthen the facility’s performance which are being
addressed by the department and the facility.
Architects, engineers, resource managers and planners have crucial roles in building
Australia’s ability to adapt to a changing climate, in particular by choosing adaptation
strategies that reduce the vulnerability of settlements, infrastructure, ecosystems and
water resources. The department worked to help those professional groups acquire
the knowledge and skills needed to address climate change risks. Since 2007–08, the
department has provided $2 million in grants to 14 training institutions, including
universities, to develop curricula and provide skills to professionals.
The department continued to work in partnership with Engineers Australia and the
Bureau of Meteorology to revise Australian Rainfall and Runoff. This handbook is the
primary source of technical information for designing infrastructure to withstand the
impacts of extreme rainfall, flooding and storm surges. The update will incorporate new
data and technical and scientific advances in water engineering, and will account for the

effects of climate change on water resources, infrastructure planning, flood prediction and
emergency management. The revised handbook will enable better management of risks
3
from climate change in engineering design.
Local government is at the forefront of much on‑ground adaptation. Since 2007–08 the
department has provided $2.37 million in grants to assist more than 90 local councils to
assess their risks from climate change and identify priorities for adaptation action through
the Local Adaptation Pathways Program. In 2009–10, the department began a review of
the Local Adaptation Pathways Program, which will be the basis for the next stage of the
partnership with local government.
Enhancing understanding of climate change
The Australian Climate Change Science Program is a key driver of Australia’s climate
change research effort. In 2009–10, the program, which involves CSIRO and the Bureau
of Meteorology, in collaboration with the Australian Academy of Science, the Antarctic
Climate and Ecosystems Cooperative Research Centre and Australian universities,
supported research into the nature, causes and timing of climate change and its
implications for Australia. The program contributed to maintaining Australia’s world‑class
modelling capacity, and continued to inform Australia’s response to climate change.
In 2009–10, the program continued to advance our understanding of the climate system
and the processes that affect global and regional climate. The Australian Climate Change
Science Framework, which sets directions for climate change science over the next decade,
was released in May 2009. The department is working with the high‑level coordination
group chaired by the Chief Scientist for Australia to develop an implementation plan which
will be completed in 2010–11.
The Australian Climate Change Science Program advanced the development of the
Australian Community Climate and Earth‑System Simulator, Australia’s next‑generation
global climate model. The program made significant progress in developing the
model and in preparing Australia’s contribution to the fifth assessment report of the
Intergovernmental Panel on Climate Change (IPCC).
The following are some highlights of research undertaken by the program:
• New research has revealed that the global hydrological cycle is intensifying, with some
drought‑affected areas becoming drier and high‑rainfall areas wetter. This finding is
confirmed by extensive measurements of the oceans which provide new insights into
temperature, salinity and density changes. Research has found that changes in rainfall
patterns over oceans are affecting the salinity of the oceans on a regional basis.
• Climate change projections have been developed for a range of climate change variables,
3 including temperature, rainfall, wave and extreme climate events. There is clear
evidence that warming has led to more hot days and fewer cold days, with this trend
likely to continue with future warming. In particular:
– Most models predict that extreme rainfall will become more intense for most

regions, even regions that become drier on average.
– Best available projections on tropical cyclones indicate a decrease in the frequency
around Australia, but a possible increase in the percentage of tropical cyclones in the
more extreme category (3–5).
• Researchers have found that changes to Indian Ocean surface temperatures are
influencing springtime rainfall across south‑eastern Australia.
• Sea level rise accelerated from the nineteenth century to the twentieth century
and the acceleration is continuing. Updated ocean heat estimates show continuing
thermal expansion of the oceans, which now contributes approximately 40 per cent of
sea level rise.
• Research is revealing the nature and extent of the impacts of ocean acidification on
the Great Barrier Reef and on Ningaloo Reef in Western Australia. For example,
acidification adds to the stress on reefs by reducing calcification rates, making it
more difficult for corals and other calcifying organisms to maintain their carbonate
structures. The research supports a broader research effort on the impacts of climate
change on reefs.
• Research has provided the world’s first field evidence that ocean acidification, caused by
the absorption of human‑induced carbon dioxide by oceans, impacts Southern Ocean
zooplankton.
• Development of Australia’s new climate model system, the Australian Community
Climate and Earth‑System Simulator, is on track for research outputs needed for the
IPCC’s fifth assessment report. Recent testing indicates that the model has the capacity
to simulate many parts of the global climate system, such as the atmosphere, the land
surface, oceans and sea ice.
Australian Government’s contribution to the IPCC
The department coordinates the Australian Government’s input into the IPCC. In June
2010, the IPCC selected 36 Australian experts as authors for the fifth assessment report.
The IPCC assessment reports are used by governments, businesses and individuals
around the world as a primary source of information on climate change. The IPCC’s fifth
assessment report will be released in stages during 2013 and 2014.

The IPCC has commenced preparation of a special report on managing the risks of extreme
events and disasters to advance climate change adaptation, to be completed in 2011. The
3
department has provided support funding for the three Australians selected by the IPCC
as authors.
Professor Will Steffen, Science Adviser

Professor Will Steffen, climate change science adviser to the
department and Executive Director of the ANU Climate Change
Institute, produced an update for the department on the state of
climate change science knowledge entitled Climate Change
2009: Faster Change and More Serious Risks. This update
focuses on the rapidly developing areas of science with direct
policy relevance for Australia. Key findings include that the
climate system appears to be changing faster than earlier thought
likely, with uncertainties operating in one direction—towards
more rapid and severe climate change and thus towards more
costly and dangerous impacts.
Reducing sectoral vulnerability
In November 2009 the Minister for Climate Change, Energy Efficiency and Water released
the first‑pass national coastal risk assessment. The assessment provided a national
overview of climate change risks to coastal settlements, industries and environments.
It included new analysis on risks to residential buildings and found that up to
247,600 existing houses, with a value of up to $63 billion, are at risk of inundation from a
sea level rise of 1.1 metres. While there remains considerable uncertainty about the extent
and timing of sea level rise, scientists advise that a sea level rise of a metre or more at the
turn of the century cannot be ruled out.
The National Climate Change Forum: Adaptation Priorities for Australia’s Coast occurred
in Adelaide on 18–19 February. The forum kickstarted a dialogue on the components of
coastal adaptation requiring national action and it was attended by around 200 coastal
decision‑makers from local, state, territory and Australian governments, professional
associations and the research community. Forum discussions were informed by the
first‑pass national coastal risk assessment.
To help develop the forum program and to advise on community needs with regard
to coastal adaptation, the Minister for Climate Change, Energy Efficiency and Water
established a Coastal Council, chaired by Professor Tim Flannery and involving Professor
Bruce Thom, Mr Geoff Lake, Professor Barbara Norman, Mayor Paddi Creevey, Mayor Ron
Clarke (replaced by Mayor Lorraine Pyefinch) and Ms Sam Mostyn. The council provided a
preliminary report to the Minister before the forum met, and it will deliver a final report by
3 the end of 2010.
The department also continued to assess the climate change risks to infrastructure, with
progress made through the National Infrastructure Climate Change Adaptation Risk
Assessment project on the transport sector.

Development of a The government released a comprehensive climate change policy

comprehensive climate change Adapting to Climate Change in Australia in February 2010.
policy on adaptation
Strategies for adaptation The government released the first-pass national coastal risk
response identified assessment, including the identification of residential properties at risk
from sea level rise.
The National Climate Change Forum: Adaptation Priorities for
Australia’s Coast was held in February 2010, to commence national
dialogue on the coastal adaptation agenda.
Preliminary advice on community engagement for coastal adaptation
was provided to the Minister by the Coastal Council.
Six national adaptation research plans were finalised by the National
Climate Change Adaptation Research Facility; they identify the
research priorities to support adaptation action.
Implementation of Australian The Australian Climate Change Science Program is funding research
climate change science to implement parts of the framework.
framework A high-level group chaired by the Chief Scientist for Australia is
developing a comprehensive implementation plan.

Feature:
Australian Government adaptation policy 3
On 19 February 2010 Senator the Hon Penny Wong, the Minister for Climate Change, Energy
Efficiency and Water, released Adapting to Climate Change in Australia: An Australian
Government Position Paper, which sets out, for the first time, the Australian Government’s
approach to adapting to the impacts of climate change.
Even if climate change can be contained to around 2 °C of global warming, Australia will need
to manage serious and pervasive risks from climate change impacts. Some of these risks are
already beginning to emerge. The incidence of extreme fire weather in south‑eastern Australia
has increased and there is evidence that reduced rainfall in south‑western and south‑eastern
Australia is partly due to anthropogenic greenhouse gases.
Governments at all levels, businesses and the community have important, complementary and
differentiated roles in adapting to the impacts of climate change.
It is not feasible for governments to bear all of the costs of adapting to climate change, or to
make decisions about how to adapt to climate change impacts on behalf of businesses and
individuals who are better placed to manage their own risks. Businesses and communities will
need to start factoring climate change into their everyday decision making.
The Australian Government has four roles in climate change adaptation:
• providing public good science and other information that will be needed for Australia to
effectively adapt to the impacts of climate change
• leading national reform so that Australia is well placed to manage risks with the long‑
term potential to undermine the national economy or affect natural systems of national
significance (the initial national priorities are coastal management, water, infrastructure,
natural systems of national significance, natural disaster management, and agriculture)
• ensuring that climate change considerations are factored into Australian Government policy
development, program delivery and asset management
• maintaining a strong, flexible economy so that resources can be deployed efficiently and
so that there is a strong social safety net to assist those who may otherwise have difficulty
adapting to climate change.
Feature:
3 National Climate Change Forum:
Adaptation Priorities for Australia’s Coast
On 18 and 19 February 2010, Senator the Hon Penny Wong, the Minister for Climate Change,
Energy Efficiency and Water, hosted the National Climate Change Forum: Adaptation Priorities
for Australia’s Coast, in Adelaide. Almost 200 coastal decision‑makers participated in the
forum, from business, academia and all levels of government (including many local government
mayors and councillors). The forum initiated a dialogue on the national priorities to prepare our
coastal communities for the impacts of climate change.
The forum built on the work of the first‑pass national coastal risk assessment, Climate Change
Risks to Australia’s Coast, released by the Minister in November 2009. The risk assessment
highlighted the magnitude and extent of the risk to coastal communities, industries and
infrastructure, including identifying that up to 247,600 existing residential buildings (worth
up to $63 billion) are potentially at risk from inundation under a sea level rise scenario of
1.1 metres.
There was a general consensus among forum participants that preparing coastal communities
for a changing climate needs to begin now. Key areas of broad agreement included the need for
better information on climate change impacts and risks to communities, greater consistency in
planning approaches, and a clear understanding of roles and responsibilities at different levels
of government.
The forum is intended to contribute to a national agenda on climate change adaptation.
Members of the Coastal Adaptation Team with Plenary address by Warwick Watkins
departmental executives

Program 1.4: Helping to shape a global climate 3
change solution
Program 1.4: Helping to shape a global climate change solution, was Program 1.3 in the
department’s 2009–10 Portfolio Budget Statements. It became Program 1.4 with the
Administrative Arrangements Order change of 8 March 2010.
In 2009–10, the department contributed to Program 1.4 through the following
deliverables:
• policy advice, and underpinning analysis, on international strategies and approaches to
advance and protect Australia’s national interests in an effective, efficient and fair global
response to climate change
• influencing international climate change negotiations to advance and protect Australia’s
national interests, including in key multilateral negotiations under the UNFCCC, and on
issues such as financing, land use, land use change and forestry
• some positive outcomes for Australia at the Copenhagen Climate Change Conference in
December 2009
• influencing other international forums to advance and protect Australia’s broader
multilateral objectives as they relate to climate change, including in the Major
Economies Forum, Asia Pacific Partnership, Group of Eight (G8) in relation to clean
technologies, and other forums on carbon market developments, and promoting
emissions trading capacity to deliver least cost global abatement
• strengthened bilateral climate change partnerships with key countries
• implementation of regional cooperation initiatives on forestry issues (including the
International Forest Carbon Initiative), and support for adaptation in the Pacific
(including through the International Climate Change Adaptation Initiative)
• reporting Australia’s domestic and international actions on climate change in its Fifth
National Communication to the UNFCCC.
In 2009–10, the department worked towards achieving an ambitious global climate
change outcome, consistent with Australia’s national interest. The department provided
high‑quality policy advice and analysis, influencing the international climate change
agenda through international engagement—including at the Copenhagen Climate Change
Conference in December 2009 and other climate related meetings—and strengthening our
bilateral and regional relationships towards achievement of our objective.

In the lead‑up to the Copenhagen Conference, the department focused on achieving a
3 positive outcome for Australia at that meeting. Following the conference, the department
worked with other countries to bring forward international action on core elements of the
conference’s key outcome, the Copenhagen Accord, and supporting structure, including
development of the innovative Cartagena Group of forward‑looking developed and
developing countries seeking global agreement.
International climate change policy and analysis
In 2009–10, the department provided in‑depth analysis and robust policy advice on a
wide range of key international climate change issues. This included strategic policy advice
in support of Australia’s participation in the Copenhagen Conference (December 2009);
analysis of national emissions targets, emission trajectories and projections; and detailed
proposals on international climate change financing and the legal architecture of the
post‑2012 global climate change outcome. These efforts placed Australia in a strong
position to advance and protect its national interests in international negotiations both
within and outside the UNFCCC process.
On international climate change financing, the department conducted analysis to underpin
the government’s decision to contribute $599 million in ‘fast‑start’ financing support
aimed at facilitating more ambitious mitigation and adaptation actions by developing
countries. The department also provides analytical support for the participation of the
Hon Bob McMullan in the UN Secretary‑General’s High‑level Advisory Group on Climate
Change Financing. Established in March 2010, the advisory group is developing analysis on
longer term sources of climate change financing. Mr McMullan participates in a personal,
expert capacity.
The Copenhagen Accord, and a number of decisions that were adopted by the Copenhagen
Conference, reflect policy proposals developed by the department on issues, including
transparent measurement, reporting and verification (MRV) of emission reductions;
mitigation actions; reducing emissions from deforestation and forest degradation in
developing countries (REDD+); and the legal architecture of the post‑2012 outcome.
The department’s analysis and advice on land sector issues, coupled with our constructive
participation in the negotiations, contributed to the considerable progress made in
Copenhagen on treatment of the land sector post‑2012.
Since Copenhagen, the department’s priority has been to undertake activities to support
implementation of the accord and broad‑based international climate action.

International engagement
3
Throughout 2009–10, the department actively engaged in international forums—both
within and outside the UNFCCC process—to shape and drive the international climate
change negotiations, consistent with Australia’s national interest. Particularly in the
latter half of 2009, major international forums placed a strong emphasis on climate
change, and the department supported the engagement of other ministers, in particular
the Prime Minister, and other departments in pursuing Australia’s international climate
change agenda.
Engagement in the UNFCCC

In 2009, the department used innovative approaches to influence international climate
change negotiations. It hosted a series of seminars prior to and during UNFCCC meetings.
The seminars, which were the first of their kind in the UNFCCC context, covered core
elements of discussions on the post‑2012 global response to climate change, including
legal architecture, new carbon market mechanisms, finance, adaptation, and low‑carbon
planning. Representatives from developed and developing countries, non‑government
organisations and civil society actively participated. The Copenhagen Accord subsequently
reflected many key areas of convergence identified through these detailed discussions.
In the lead‑up to and during the Copenhagen Conference, Australia worked closely with
conference host Denmark to move the negotiations forward and build political consensus
between key leaders. Australia was one of the 30 countries that drafted the accord—an
outcome that constitutes a significant and positive step toward a truly global response to
climate change. (See the feature article on the Copenhagen Outcome on page 111 for further
information on the Copenhagen Conference and the accord.)
Since Copenhagen, Australia has advocated the implementation and elaboration of the
accord, including in collaboration with the Umbrella Group (UG) of countries of the
UNFCCC process. The UG is a negotiating coalition of developed countries comprising
Australia, Canada, Iceland, Japan, Kazakhstan, New Zealand, Norway, Russia, Ukraine
and the USA. As current chair of the UG, Australia plays an influential role in the UNFCCC
negotiations, which it has used to build greater cohesion between developed countries,
particularly the UG and the European Union. Australia also plays a significant role in
outreach between the UG and developing country groups, such as the G77 (group of
developing countries), the Alliance of Small Island States, the African Group, and the group
of Least Developed Countries, which has had important corollary benefits for Australia’s
broader multilateral interests and objectives.
At the June 2010 UNFCCC negotiations, Australia played a key role in securing UG support
for a joint statement on MRV. Building on the accord, the UG detailed the necessary

elements of an MRV framework. UG members Australia, Canada, Japan, New Zealand,
3 Norway and the USA also released a joint statement that emphasised their commitment to
deliver the fast‑start financing element of the accord and set out the scale of the fast‑start
effort already underway. Release of the fast‑start financing statement supports the
transparent delivery of individual and collective fast‑start funding commitments.
To build on the progress made in Copenhagen, deepen international climate change action,
and work towards a strong outcome at the next UNFCCC meeting in Mexico in December
2010, the department has sought to establish new avenues for shaping the global response
to climate change. In Copenhagen, Australia was instrumental in the formation of the
Cartagena Group, which comprised around 30 developed and developing progressive
countries united by the goal of strong and urgent action on climate change. Since
Copenhagen, Australia has supported successive meetings of the Group, which has proven
an effective forum for frank dialogue and innovative ideas to advance international climate
change action.
Outside the UNFCCC

The department also supported the Prime Minister’s and Minister’s engagement in
high‑level forums outside the UNFCCC process, including the Major Economies Forum
(MEF) on Energy and Climate, G20 and G8 climate change outreach processes, the
Asia–Pacific Economic Cooperation forum, the East Asia Summit, and the Commonwealth
Heads of Government Meeting. Through these forums, Australia worked to build
consensus amongst countries on issues core to the UNFCCC negotiations, and advance
practical international action.
In 2009–10, Australia continued to play a key role in the influential MEF. At the July 2009
MEF meeting, in the lead‑up to the Copenhagen Conference, leaders of the world’s largest
developed and developing country economies reached political consensus on the scientific
need to limit global temperature rise to within two degrees Celsius. This agreement was
subsequently recognised in the Copenhagen Accord. MEF member countries also agreed
to develop technology action plans to accelerate the development and deployment of eight
key transformational technologies. Australia is responsible for producing the Technology
Action Plan on Carbon Capture, Use and Storage in conjunction with the Government of
the United Kingdom. Post‑Copenhagen, the MEF has proved a valuable forum for Australia
to pursue its international climate change agenda, particularly in relation to MRV.
Australia, in collaboration with a number of countries, facilitated development of
the REDD+ Partnership agreement. Developed through the Paris–Oslo process,
the Partnership builds on the accord’s agreement on the need to immediately
establish a REDD+ mechanism. (See the feature article on REDD+ on page 112 for
further information.)

Our multilateral engagement on REDD+ initiatives was also progressed through the World
Bank’s Forest Carbon Partnership Facility and Forest Investment Program, which help
3
build REDD+ capacity in a wide range of countries. Australia’s engagement was supported
by the $273 million International Forest Carbon Initiative, jointly managed by AusAID and
the department.
The department continued its engagement on the development of the forest monitoring
systems that are key to a robust global REDD+ mechanism. Australia, through the
department, co‑leads the intergovernmental Group on Earth Observations (GEO) Global
Forest Monitoring Network. This initiative facilitates access to satellite imagery, providing
analysis and prediction tools to support the development of national forest carbon tracking
systems. GEO released a draft report, led by Australia, on the concept phase for developing
a Global Forest Monitoring Network, which will be presented to the GEO VII Plenary in
November 2010.
To support carbon market engagement and least cost global abatement of greenhouse gas
emissions, the department participated in the International Carbon Action Partnership.
The partnership was established to assist in the development of a global carbon market.
In 2009–10, the department provided funding for and assisted in the delivery of the
partnership’s primary capacity building initiative—the 2010 Summer School on Emission
Trading for Emerging and Developing Countries.
Bilateral and regional cooperation
The department has continued to strengthen Australia’s bilateral and regional cooperation
as part of its broad‑based approach to international climate change action and agreement.
In August 2009, the department supported the Prime Minister’s participation in the
40th Pacific Islands Forum, hosted by Australia. At that meeting, the Prime Minister joined
the Pacific leaders’ call to action to other world leaders to urgently redouble their efforts
on climate change in advance of the Copenhagen Conference. He also launched Australia’s
Pacific climate change policy document, Engaging our Pacific Island neighbours on
climate change: Australia’s approach, prepared by the department. This document is the
first comprehensive statement of the government’s commitment to assist Pacific island
countries to respond to climate change, defining the challenges of climate change in the
Pacific and providing clear guidance on future support.
In 2009–10, as part of the International Climate Change Adaptation Initiative, jointly
managed by AusAID and the department, the department progressed development of a
$12 million Pacific Adaptation Strategy Assistance Program. The program will strengthen
the capacity of Pacific island countries and East Timor to assess their vulnerabilities to
climate change and develop adaptation strategies. Developed in close consultation with

partner countries and regional organisations, the program will include country‑specific
3 activities and a regional overview to describe regional trends and variability in climate
change impacts, vulnerability and adaptive capacity. Progress has also been made in
implementing the $20 million Pacific Climate Change Science Program, including three
regional workshops involving partner countries, to share preliminary results and provide
training to national meteorological services.
Under the $273 million International Forest Carbon Initiative, jointly managed by AusAID
and the department, Australia continued to strengthen multilateral and bilateral activities
on REDD+. Australia and Indonesia announced a second practical REDD+ activity, the
$30 million Sumatra Forest Carbon Partnership, in March 2010. Implementation of
the first project, the Kalimantan Forests and Climate Partnership, and development of
Indonesia’s National Carbon Accounting System also advanced. Australia’s cooperation
with Papua New Guinea under the International Forest Carbon Initiative focused on
technical and institutional advisory support in 2009–10.
In partnership with the Clinton Climate Initiative, the department continued bilateral
cooperation with Guyana, Kenya, Tanzania and Cambodia on forest carbon accounting,
including hosting a technical workshop with Cambodia in September 2009. The
department also progressed the acquisition and distribution of satellite data to ensure that
neighbouring countries have access to satellite data for monitoring their forests.
Australia’s active involvement in the Asia Pacific Partnership on Clean Development and
Climate continued in 2009–10. The partnership brings together seven key developed and
developing nations (Australia, Canada, China, India, Japan, South Korea and the USA)
to address climate change, energy security and air pollution challenges in a way that
encourages economic development and reduces poverty, in close collaboration with the
private sector. Over 175 projects in all seven partner countries have been completed or
are underway.
The department continued to support Australia’s strategic bilateral engagement with
key partner countries. At the second Australia–China Climate Change Ministerial
Dialogue in Beijing in October 2009, the countries agreed to extend the government‑level
memorandum of understanding on climate change activities until 2014. A new
memorandum of understanding between the department and China’s National
Development and Reform Commission was also signed to enhance interagency
collaboration. The department has since conducted a number of workshops to enhance
China’s capacity to measure and report their greenhouse gas emissions, and a successful
project was finalised on developing China’s national carbon accounting capacity through
collaborative demonstration of the Australian methodology in the Guangxi province.
Similar technical collaboration with counterparts in India commenced in 2009–10.

In February 2010, Australia renewed its bilateral partnership on climate change with South
Africa through a letter of intent co‑signed by the Minister for Trade and the South African
3
Minister for Water and Environmental Affairs. Practical collaboration continued under
the partnership, including through an exchange of information on economic instruments
(including emissions trading and carbon taxes) to address climate change.
Australia’s Fifth National Communication to the UNFCCC
As a party to the UNFCCC, Australia must submit national reports on the implementation
of the convention to the Conference of the Parties every four years. The department
prepared Australia’s Fifth National Communication on Climate Change, which sets out
Australia’s climate change strategy and details its domestic and international progress on
tackling climate change. The report, developed by the department over an extended period
of time and after extensive consultation, was submitted after the 1 January 2010 deadline,
but within the compliance period, as agreed with the UNFCCC secretariat.

Australia’s national interests Policy proposals on key elements of the post-2012 global response
are advanced through the to climate change, including on REDD+, MRV and legal architecture,
development of relevant policy reflected in the key outcome of the UNFCCC Copenhagen
advice on international climate Conference, the Copenhagen Accord.
change (including on mitigation, Secured considerable progress in UNFCCC negotiations on the
adaptation, legal issues, land sector’s role in a post-2012 global response to climate change,
financing, technology, and consistent with policy advice on issues of strategic importance to
analysis and research) Australia’s land sector.
Whole-of-government position on the provision of international
climate change financing, including ‘fast-start’ finance. This funding
will facilitate more ambitious developing country mitigation and
adaptation actions.
The policy document Engaging our Pacific Island neighbours on
climate change: Australia’s approach was launched. The document
is the first comprehensive statement of the Australian Government’s
commitment to assist Pacific island countries to respond to
climate change.

Promotion of Australia’s interests Promoted Australia’s interests in the post-2012 climate change
in the post-2012 climate change negotiations through:
negotiations, and in other • support of Prime Minister and Minister’s participation in the
multilateral climate change UNFCCC Copenhagen Conference’s leaders’ negotiations that
forums and initiatives drafted the conference’s key outcome, the Copenhagen Accord
• announcement of Australia’s contribution to the Accord’s fast start

funding component at the June 2010 UNFCCC negotiations to
encourage the transparent delivery of fast-start funding. Australia’s
contribution totals $599 million for 2010 to 2012
• joint statement with the ‘Umbrella Group’ (Australia, Canada,
Iceland, Japan, Kazakhstan, New Zealand, Norway, Russia, Ukraine
and the United States) to the June 2010 UNFCCC negotiations
on the necessary elements of a measurement, reporting and
verification framework for the post-2012 global response.
Promoted Australia’s interests in other multilateral climate change
forums and initiatives through support of:
• Prime Minister and Minister’s engagement on climate change issues
in the MEF, G8 climate change outreach processes, the APEC
forum, the East Asia Summit, and CHOGM
• Prime Minister and Treasurer’s participation in the G20, to help

shape a global solution on climate change financing
• Prime Minister’s participation at the Pacific Islands Forum Leaders’
Meeting in August 2009
• Hon Bob McMullan MP’s participation in the UN Secretary-General’s
High-level Advisory Group on Climate Change Financing.
Active support for the Paris–Oslo process to establish a REDD+
Partnership, including:
• contribution to the development of the REDD+ Partnership
agreement
• initiation and completion of REDD+ financing and activities survey
that will form the basis of a transparent global database.

Key performance indicators 2009–10 results 3
Implementation of bilateral Enhanced cooperation with China:
partnership activities • extended country-level climate change MOU, and signed
agency-level MOU
• conducted a series of workshops on emissions measurement
and reporting
• developed a trial carbon accounting system for Guangxi Province in
China based on Australia’s methodology
• conducted joint research on the potential for structural change in
China in three target areas (air conditioners, motor vehicles and
natural gas) to identify policies and implementation strategies China
could introduce to improve energy efficiency
• participated in the second annual Ministerial Dialogue with China
in Beijing.
Enhanced cooperation with South Africa:
• renewed climate change partnership with South Africa
• conducted a workshop on economic instruments to address climate
change in South Africa.
Enhanced cooperation with Indonesia:
• completed a second joint Australia–Indonesia submission on
REDD+ to the UNFCCC
• hosted a climate change internship from Indonesia’s Ministry
of Finance.
Enhanced cooperation with India:
• exchanged technical information on greenhouse gas inventories to
build emission measurement and reporting capacity
• sponsored the New Delhi Sustainable Development Summit.
Enhanced cooperation with New Zealand:
• sponsored the Australia–New Zealand Climate Change and
Business Conference in 2009.

Implementation of the Under the International Forest Carbon Initiative, working closely
International Forest and with AusAID:
Carbon Initiative and the • expanded cooperation with Indonesia with the announcement of the
International Climate Change $30 million Sumatra Forest Carbon Partnership REDD+ activity
Adaptation Initiative
• continued support for the development of Indonesia’s National
Carbon Accounting System and the Kalimantan Forests and Climate
Partnership REDD+ activity
• continued support under the Papua New Guinea—Australia Forest
Carbon Partnership
• continued engagement through the World Bank’s Forest Carbon
Partnership Facility and Forest Investment Program.
Under the International Climate Change Adaptation Initiative, working
closely with AusAID:
• progressed development of the $12 million Pacific Adaptation
Strategy Assistance Program
• progressed implementation of $20 million Pacific Climate Change
Science Program.
Engagement and capacity Established Australia’s National Authority for the Kyoto Protocol’s
building on emissions trading Clean Development Mechanism and Joint Implementation to
and carbon markets facilitate Australian participation in these mechanisms for addressing
climate change.
Supported:
• ICAP 2010 Summer School on Emission Trading for Emerging and
Developing Countries
• trans-Tasman Officials Group on Harmonisation of Carbon Pollution
Reduction Schemes.
Australia’s obligatory Obligatory international financial contributions to the UNFCCC,

international financial covering contributions to the International Transaction Log of the KP
contributions are met and core contributions to the UNFCCC and the KP, met.
Timely submission of a quality Submitted Australia’s Fifth National Communication on Climate

Fifth National Communication to Change to the UNFCCC within the agreed compliance period.
the United Nations Framework
Convention on Climate Change
APEC= Asia–Pacific Economic Cooperation; CHOGM = Commonwealth Heads of Government Meeting; G8 = Group
of Eight; G20 = Group of Twenty; ICAP = International Carbon Action Partnership; KP = Kyoto Protocol; MEF = Major
Economies Forum on Energy and Climate Change; MOU = memorandum of understanding; MRV = measurement,
reporting and verification; REDD+ = reducing emissions from deforestation and forest degradation in developing countries;
UNFCCC = United Nations Framework Convention on Climate Change

Feature:
Copenhagen outcome 3
The UNFCCC Conference, held in Copenhagen from
7 to 18 December 2009 (Copenhagen Conference), marked the
end of a two‑year negotiating process to agree on a path for
future global climate change action. The key outcome of the
conference—the Copenhagen Accord—is an important step along
that path. Australia played an active and constructive role in
negotiations, bringing forward proposals that have proven to be
a catalyst for international action towards an effective, efficient
and fair global response to climate change, and building
consensus among developed and developing countries.
Australia was one of 30 countries that drafted the Copenhagen
Accord. Negotiated by leaders from both developed and
developing countries, including the Australian Prime Minister,
the accord is a high‑level political agreement. It is the first
time that developed and developing countries agreed to hold
the increase in global temperature below 2 °C, to specify what actions each will take, and to a
framework to measure, report and verify progress. The accord also includes agreement on the
finance needed to support emissions reductions and adaptation in developing countries, and on
the establishment of a ‘technology mechanism’ and a mechanism for REDD+.
Australia, along with over 130 other countries, has formally registered its support for the
accord. On 27 January 2010, Australia submitted our emissions reduction target range to the
accord: an unconditional reduction of 5 per cent on 2000 levels by 2020, with conditional
reductions of up to 15 per cent or 25 per cent depending on the extent of action by others.
The text of the accord and Australia’s submission can be found on the UNFCCC website at:
http://unfccc.int/home/items/5262.php
Australia contributed to key elements both of the accord and of decisions adopted by the
Conference of the Parties to the UNFCCC. Issues on which the department worked included
MRV, REDD+ and the legal architecture of the post‑2012 global response.
Australia has also shown leadership on financing for climate change, seen by all parties as the
credibility test for an international outcome. At the June 2010 UNFCCC negotiations, Australia,
Canada, Japan, New Zealand, Norway and the USA released a joint statement on their
contributions to the ‘fast‑start’ financing element of the accord.
Australia is taking a multilayered approach to delivering an international outcome—working
within the UNFCCC, across a range of international groupings and relationships, and with our
bilateral partners. These efforts are aimed at promoting and supporting robust and ambitious
international action on climate change.
Feature:
3 Reducing emissions from deforestation and
forest degradation in developing countries
Australia plays an active role in supporting the development of an international mechanism for
reducing emissions from deforestation and forest degradation in developing countries
(known as REDD+).
Good progress was made on REDD+ at the Copenhagen Conference. Leaders agreed on the
need to establish a REDD+ mechanism immediately, and financing for REDD+ was announced,
including a contribution of US$120 million from Australia. Total worldwide financing for
REDD+ now stands at US$4 billion for the period 2010 to 2012. Australia’s contribution is
being delivered through the International Forest Carbon Initiative, which has expanded to
$273 million over six years to 2012–13. This includes two large‑scale REDD+ demonstration
activities with Indonesia, the $30 million Kalimantan Forests and Climate Partnership and the
$30 million Sumatra Forest Carbon Partnership, which was announced in March 2010.
To build on the commitment generated from the Copenhagen Conference, countries met to
establish a REDD+ Partnership (the Paris–Oslo process). Australia joined a core group of
countries to successfully develop the partnership, now endorsed by over 60 countries, including
Australia. The REDD+ Partnership provides a platform for countries to scale up REDD+ actions
and finance; and improve the effectiveness, efficiency, transparency and coordination of REDD+
initiatives. The partnership will advance REDD+ action in the immediate term, with outcomes
to feed back into the UNFCCC negotiations.
To assist the process, Australia initiated and conducted a
survey of countries’ and organisations’ REDD+ financing
and activities. The survey was undertaken in cooperation
with France and Papua New Guinea. Australia presented
a synthesis report of the survey at the Oslo Forest Climate
Conference in May 2010. The report was well received,
and it was agreed that the survey will form the basis of
an ongoing global database of financing and activities
under the REDD+ Partnership (survey available at
http://www.oslocfc2010.no). The database will help
increase transparency and prioritise investment in REDD+.
Australia’s work continues to lay the groundwork for a
future REDD+ mechanism and provides essential support
for developing countries to build capacity to participate
in REDD+.
Site visit to the Kalimantan Forests and
Climate Partnership REDD+ activity,
Central Kalimantan, Indonesia

Section 4
Management and
accountability
Section 4: Management and accountability
Corporate governance framework 115
Governance committees and their roles 116
Corporate planning and reporting 119
Risk management 119
Fraud prevention and control 119
Internal audits 121
Review of the information technology environment 121
Review of records management 121
External scrutiny 123

Audits 123
Independent reviews 124
Parliamentary committee reports 125
Commonwealth Ombudsman 125
Administrative Appeals Tribunal 126
Judicial decisions
126
Information technology 127
Management of human resources 128
Workforce planning and recruitment 128
Performance development framework 129
Learning and development 129
Graduate development program 129
Staffing information 130
Remuneration and performance appraisal of Senior Executive Service employees 132
Remuneration of non‑Senior Executive Service employees 132
Access and equity 134
Reconciliation action plan 135
Commonwealth Disability Strategy 135
Asset management 138
Purchasing and procurement 138
Exempt contracts 139
Australian National Audit Office access clause 139
Purchaser–provider arrangements 139
Consultancies 140

The department’s corporate governance practices comply with statutory requirements, and
aim to achieve sound administrative and financial management practice. They are designed
to ensure efficient, effective and ethical use of the department’s resources.
Corporate governance framework

The department currently operates under a governance framework that reflects its role
in the delivery of policy advice, policy implementation, program delivery and regulatory
oversight in relation to the development and coordination of Australia’s climate change
and energy efficiency policy. Its objectives are to:
• deliver on all the principles agreed to by the Executive and meet the requirements of the
Australian National Audit Office (ANAO)
• put in place processes to ensure that the governance requirements and issues facing the
department are anticipated, understood and properly managed
• put in place governance processes that contribute to overall performance and
conformance by the department.
The core components of the framework are:
• the Governance Framework Guidelines
• the Corporate Plan
• the Risk Management Plan, including the Fraud Control Plan and Business
Continuity Plan
• the Chief Executive Instructions
• division and branch business plans
• the Financial Delegations
• the annual Regulatory Plan
• the annual Procurement Plan
• Financial Management and Accountability Act 1997 compliance reporting.
In June 2010, the department began a comprehensive review of the governance framework
following the machinery of government changes that came into effect on 8 March 2010,
and the government’s decision on 27 April 2010 to delay implementation of the
Carbon Pollution Reduction Scheme (CPRS). The review considered the findings of the

Hawke Review of the Home Insulation Program and the Faulkner Inquiry into the Green
4 Loans Program.
The revised governance framework will embed accountability and transparency in the
governance processes in the newly established department and to identify opportunities to
improve performance and conformance.
The final report was presented to the Executive Board in September 2010.
Governance committees and their roles

The department’s governance committee structures were reviewed in June 2010 to reflect
its broader role and changed business operations following the machinery of government
changes in March 2010 and the government announcement on 27 April 2010 to delay the
implementation of the CPRS. The Executive Board endorsed the new committee structure
in June 2010.
Figure 7 shows the revised standing committees that support the department’s corporate
governance framework.
Figure 7 Governance committee structure
Secretary
Martin Parkinson
Audit Committee Executive Board
Knowledge
Finance and Occupational
Staff Consultative Information and
Investment Health and Safety
Committee Technology
Committee Committee
Committee
Strategic
Program
Communications
People Committee Management
and Public Affairs
Committee
Committee

Executive Board
4
The Executive Board operates as an advisory committee for the Secretary. It is responsible
for high‑level strategic direction and operational issues, including corporate policy
and program delivery; corporate governance; and resource management, development
and planning.
At 30 June 2010, the board members were Dr Martin Parkinson (Secretary); and
Mr Blair Comley, Mr Geoff Leeper, Mr Malcolm Thompson and Mr Martin Bowles (deputy
secretaries). Advisers were Ms Penny Weir (First Assistant Secretary, Corporate Support
Division), and Ms Bernadette Welch (Acting First Assistant Secretary, Governance and
Program Support Division), who is also secretary to the Executive Board.
The Executive Board meets fortnightly.
The Staff Consultative Committee, which reports directly to the Executive Board, is

an elected representational forum that provides advice to the Secretary on matters relating
to workforce planning, graduate recruitment, learning and development, performance
management and remuneration. The committee meets quarterly and is chaired by
Ms Penny Weir, First Assistant Secretary, Corporate Support Division.
Audit Committee
The Audit Committee provides independent assurance and assistance to the Secretary
and the Executive Board on the department’s risk management, fraud and compliance
frameworks, and external accountability responsibilities. The committee follows the
recommended better practice guidelines issued by the ANAO.
In March 2010, the department appointed Mr Geoff Knuckey as the independent
chair of the Audit Committee. At 30 June 2010, the committee comprised Mr Geoff
Knuckey (independent chair), Mr Will Laurie (independent member), Mr Blair Comley
(Deputy Secretary), and Mr Ian Carruthers (First Assistant Secretary, Adaptation,
Land and Communications Division). Mr Robert Twomey (Chief Financial Officer)
and Ms Rebecca Reilly (Executive Director, ANAO) attend each meeting as observers.
Ms Amanda McIntyre (Chief Internal Auditor) attends as the secretary to the Audit
Committee. The internal auditors, KPMG, attend by invitation.
The committee meets six times a year or more frequently as required. The chair of the
committee reports to the Secretary following each meeting and prepares an annual report
to the Secretary on the operations and key activities of the committee. Minutes of the
meetings are circulated to the Executive Board and posted on the intranet.
The Audit Committee met eight times in 2009–10.

The Audit Committee’s Financial Statements Subcommittee monitors the production of the
4 department’s financial statements and helps resolve issues relating to them. In 2009–10,
the subcommittee comprised Mr Geoff Knuckey (Audit Committee chair), Mr Will Laurie
(independent member), and Mr Andrew Bailey (First Assistant Secretary, Home Insulation
Program Review Office). Mr Robert Twomey (Chief Financial Officer) and Ms Rebecca
Reilly (Executive Director, ANAO) attend each meeting as observers. Ms Amanda McIntyre
(Chief Internal Auditor) attends as the secretary to the Financial Statements Subcommittee.
The subcommittee met three times in 2009–10.
Other governance committees
The Program Management Committee provides oversight to the overall operations

and management of climate change programs funded by the department. It provides a
forum for discussion and endorsement of frameworks that seek to ensure effective program
delivery, the efficient use of departmental resources and the continued maturation of
program management capability within the department. The committee meets monthly
and reports to the Executive Board. Mr Geoff Leeper, Deputy Secretary, is chair of the
Program Management Committee. The Investigations Steering Committee operates as a
subcommittee under the Program Management Committee.
The Finance and Investment Committee is responsible for the strategic oversight

of the overall financial operations of the department. The committee meets quarterly, or
more frequently if required, and reports to the Executive Board. Mr Geoff Leeper, Deputy
Secretary, is chair of the Finance and Investment Committee. The Procurement Committee
operates as a subcommittee under the Finance and Investment Committee.
The Knowledge Information and Technology Committee is responsible for

knowledge and information technology strategy, and for oversighting the effectiveness
and management of the department’s knowledge and information technology investment
decisions. The committee meets bimonthly and is chaired by Mr Howard Bamsey,
Deputy Secretary. The committee reports to the Executive Board.
The People Committee is responsible for the assessment, monitoring and endorsement
of the department’s strategic human capital priorities and initiatives on behalf of the
Secretary. The committee is chaired by Mr Blair Comley, Deputy Secretary, and meets
quarterly, or more frequently if required.
The Occupational Health and Safety Committee operates in accordance with section

34(1) of the Occupational Health and Safety Act 1991 and aims to promote an environment
in which employer and employees work cooperatively to ensure the health and safety of
employees at work. The committee reports directly to the Executive Board as required by

legislation, meets quarterly and is chaired by Ms Penny Weir, First Assistant Secretary,
Corporate Support Division.
4
The Strategic Communications and Public Affairs Committee provides strategic
oversight of all major communication and public affairs activities and serves in an advisory
capacity to the Executive Board and Secretary. The committee meets monthly and is
chaired by Mr Geoff Leeper, Deputy Secretary.
Corporate planning and reporting

The department’s corporate planning and reporting framework is an integrated framework
linked to the government’s budget and annual performance reporting frameworks.
The Executive Board sets the broad strategic direction for the department through its
Corporate Plan, which sets out the department’s roles and responsibilities in relation to
its outcome and program objectives. The Corporate Plan articulates the department’s
future directions, key priorities, capabilities, risks and key risk management strategies,
and provides a context for divisional business plans. The 2009–10 Corporate Plan was
endorsed by the Executive Board and released in July 2009. The plan is available on the
department’s website (www.climatechange.gov.au).
In 2009–10 the departmental divisions developed annual business plans, which identified
key priorities, performance information, risks and financial and staffing information. These
plans were reviewed and endorsed by the Executive Board.
The department met its external reporting responsibilities in 2009–10, through the
publication of its portfolio budget statements and annual report.
Risk management
Following the creation of the Department of Climate Change and Energy Efficiency
in March 2010, the department redesigned its risk management framework to align
with ISO 31000, the internationally codified principles and generic guidelines on risk
management. The new framework is supported by policy documents, user guidelines, an
enterprise risk register and standardised risk assessment tools.
Fraud prevention and control

The department reviewed its Fraud Control Plan and policy in early 2010. The Fraud
Control Plan complies with the Commonwealth Fraud Control Guidelines issued under

regulation 19 of the Financial Management and Accountability Act 1997 and is available to
4 staff on the department’s intranet.
The plan outlines fraud prevention, detection, reporting and data collection procedures
and processes that meet the specific needs of the department. The plan is currently
being reviewed to ensure that it continues to adequately address fraud issues in the new
department’s scope of responsibility.
The Investigations and Intelligence Branch provides a centralised fraud and serious
non‑compliance management capability and advisory service within the department. The
branch is the primary liaison point for engagement with key law enforcement agencies,
including the Australian Federal Police and state and territory police forces. Qualified
staff not only deliver fraud (criminal) investigation and intelligence services, but also
support fraud control and prevention activities, particularly in the course of program and
policy development.
During 2009–10, the department conducted intelligence activities and/or investigations
into matters relating to the National Greenhouse Energy Reporting Act 2007, the Green
Loans Program, the Home Insulation Program, the Solar Hot Water Rebate and the Solar
Homes and Communities Plan.
Since the establishment of the branch in April 2010, nine instances of fraud and serious
non‑compliance have been referred. The branch began four investigations in 2009–10.
Two of these investigations are being jointly conducted with the Australian Federal Police
and Victoria Police.
The branch continues to work closely with program areas where allegations of significant
fraud and serious non‑compliance have occurred; most notably, the Home Insulation
Program and the Green Loans Program.

Internal audits
4
The department conducts an annual internal audit work program that reflects the overall
level of risk within the department. Prior to the machinery of government changes on
8 March 2010, the department’s overall level of risk was low, resulting in a modest annual
audit work program. Following the machinery of government changes, the department has
recognised the need for an increased annual internal audit work program. The department
has also appointed a Chief Internal Auditor who reports directly to the Secretary for
all matters that relate specifically to audit. The Chief Internal Auditor also has a direct
relationship with the Audit Committee, which is a legislated committee under the Financial
Management and Accountability Act 1997 and provides independent assurance and
assistance to the Secretary on the department’s risk, control and compliance framework.
The department engaged KPMG to provide internal audit services. Two internal
audits were completed during 2009–10, covering information technology and records
management. Program areas are responsible for conducting assurance activities associated
with program delivery. These activities are in addition to the internal audit activities
conducted by the department.
Review of the information technology environment

The department’s information technology network environment and infrastructure are
provided by the Department of the Prime Minister and Cabinet under a service‑level
agreement. The information technology environment review focused on the Microsoft
Windows network and Technology One financial management information system. The
review assessed the adequacy and effectiveness of the department’s information technology
policies and procedures and controls against the better practice principles outlined in
frameworks such as the Control Objectives for Information and Related Technology and
the IT Infrastructure Library.
The internal audit made seven key recommendations. Those recommendations
associated with access controls in the HR Management Information System and Financial
Management Information System have been implemented. The Audit Committee is
monitoring progress in implementing the remaining recommendations.
Review of records management

The department currently maintains a Total Records and Information Management
paper‑based file system for all official records. The records management conformance
review assessed the adequacy and effectiveness of the department’s policies and procedures

against the Archives Act 1983 and the minimum requirements for records management for
4 Australian Government agencies prescribed by the National Archives of Australia.
The internal audit made five recommendations on how the department can improve its
compliance with the minimum requirements for records management. The department has
agreed to the five recommendations and the Audit Committee is monitoring progress on
their implementation.

External scrutiny
4
Audits
The ANAO conducted two performance audits relating to the department’s operations
in 2009–10.
Audit Report No. 26 2009–10: Administration of Climate Change

Programs
The ANAO performance audit assessed the effectiveness of the administration of specific
climate change programs by the Department of the Environment, Water, Heritage and the
Arts (DEWHA) and the Department of Resources, Energy and Tourism. In undertaking
this audit, the ANAO focused on good administrative practice and the extent to which the
program objectives were being met. The audit dealt with four main issues:
• development of program objectives and assessment of program risks
• assessment and approval of competitive grant applications
• assessment and approval of rebate applications
• measurement and reporting of program outcomes.
Following the machinery of government changes of 8 March 2010, the audited climate
change programs were transferred from DEWHA to DCCEE.
The ANAO made one formal recommendation, the aim of which was to strengthen
grant administration in the department. The department agreed with the ANAO’s
recommendation and is in the process of implementing it.
Audit Report No. 27 2009–10: Coordination and Reporting of Australia’s

Climate Change Measures
The ANAO performance audit assessed the coordination of Australian Government and
state and territory government climate change programs and the integrity of measuring
and reporting on Australia’s greenhouse gas emissions and abatement. Particular emphasis
was given to:
• the coordination of Australian Government and state and territory climate change
programs
• the integrity of the national inventory to measure Australia’s greenhouse gas emissions
• the integrity of measuring and reporting government abatement measures.

The ANAO reported favourably on the department’s performance on climate change and
4 its coordination of climate change programs and reporting of greenhouse gas emissions
and abatement. The ANAO made one formal recommendation, the aim of which was to
increase the transparency and consistency of reporting on the impact of climate change
abatement measures. The department agreed with the ANAO’s recommendation and is in
the process of implementing it.
Other ANAO reviews
Other cross‑agency ANAO reviews that had relevance to the department in 2009–10 were:
• Audit Report No. 2: Campaign Advertising Review 2008–09
• Audit Report No. 4: The Management and Processing of Annual Leave
• Audit Report No. 6: Confidentiality in Government Contracts: Senate Order for
Departmental and Agency Contracts (Calendar Year 2008 Compliance)
• Audit Report No. 14: Agencies’ Contract Management
• Audit Report No. 17: Audits of the Financial Statements of Australian Government
Entities for the Period Ended 30 June 2009
• Audit Report No. 25: Security Awareness and Training
• Audit Report No. 38: Campaign Advertising Review: July 2009 – March 2010
• Audit Report No. 40: Application of the Core APS Values and Codes of Conduct to
Australian Government Service Providers
• Audit Report No. 41: Effective Cross-Agency Agreements
• Audit Report No. 42: Fraud Control in Australian Government Agencies.
Independent reviews
The Secretary of DEWHA commissioned two independent external reviews in 2009–10:
the Review of the Administration of the Home Insulation Program (referred to as the
Hawke Review) and the Inquiry into the Green Loans Program (referred to as the
Faulkner Inquiry). The terms of reference for the Hawke Review required the reviewer to
report to the secretaries of DEWHA, the Department of Finance and Deregulation and the
Department of the Prime Minister and Cabinet on the effectiveness of program design,
administration and delivery arrangements that were in place for the Home Insulation
Program. The terms of reference for the Faulkner Inquiry required the external reviewer
to report to the Minister and the Secretary on the probity of the contractual arrangements
and procurement processes and decisions that formed part of the final design and
implementation of the Green Loans Program.

As a result of the machinery of government changes of 8 March 2010, the functions and
responsibilities of the Home Insulation Program and the Green Loans Program were
4
transferred to DCCEE.
For further details refer to the feature article Hawke Review of the Home Insulation
Program and Faulkner Inquiry into the Green Loans Program on page 41.
Parliamentary committee reports

In 2009–10, the Senate Standing Committee on Environment, Communications and the
Arts inquired into the Energy Efficient Homes Package and the Green Loans Program.
Inquiry into the Energy Efficient Homes Package
The inquiry was referred from the Senate on 29 October 2009 and has produced two
interim reports. On 29 October 2009 the Senate referred the Energy Efficient Homes
Package (ceiling insulation) to the Environment, Communications and the Arts References
Committee for inquiry and report by 30 March 2010.
The committee held hearings on 17 February, 22 February, 26 February, 17 March and
25 March 2010.The inquiry examined and reported on the design, administration and
delivery arrangements that were put in place for the Home Insulation Program. On
15 July 2010, the report was provided to the secretaries of DEWHA, the Department of
Finance and Deregulation and the Department of the Prime Minister and Cabinet. The
review sought the views of relevant Commonwealth agencies, state and territory bodies and
industry representatives.
Inquiry into the Green Loans Program
The inquiry was referred from the Senate on 10 March 2010. The department gave
evidence at hearings on 29 June 2010. As at the time of writing the inquiry was yet
to report.
Commonwealth Ombudsman
In 2009–10, the department handled 79 investigations from the Office of the
Commonwealth Ombudsman. Most investigations were requested following the machinery
of government transfer of the energy efficiency programs from DEWHA to DCCEE on
8 March 2010. The department is working closely with the Commonwealth Ombudsman to
resolve the issues raised, including developing a consistent complaints review and appeals
handling process.

The Commonwealth Ombudsman made no formal reports relating to the department
4 in 2009–10.
Administrative Appeals Tribunal

The department was the respondent to an Administrative Appeals Tribunal application
opposing the release of documents under the Freedom of Information Act 1982 (FOI Act).
The application was made by a person opposing the release of information relating to their
business affairs. The AAT application was made on 11 June 2010, and a teleconference was
held on 23 July 2010. Following the teleconference, the parties reached agreement and the
matter was settled without proceeding to a hearing.
Judicial decisions
The case of Spencer v Commonwealth of Australia, reported in the Department of Climate
Change Annual Report 2008–09, continued in 2009–10. The matter began in June 2007
when Mr Peter James Spencer commenced proceedings against the Commonwealth in the
Federal Court of Australia claiming that the Commonwealth had acquired his property
without providing just terms compensation.
After the Federal Court dismissed Mr Spencer’s claim on two occasions, Mr Spencer
applied to the High Court of Australia for special leave to appeal. The High Court did not
grant special leave but referred the application to the full bench of the High Court for
argument as if on appeal.
The matter came before the full bench of the High Court on 16 June 2010. The
Attorneys‑General of New South Wales, Victoria, Western Australia and South Australia
intervened in the matter because it brought into issue the powers of state legislatures and
executives. The High Court granted the NSW Farmers Association leave to intervene in the
proceedings and adjourned the matter to consider the application. At 30 June 2010, the
High Court had not handed down its decision.

Information technology
4
In June 2010, the department appointed its first Chief Information Officer. The Chief
Information Officer’s role is to provide strategic direction and advice and to oversight
the delivery of the department’s in‑house and externally provided information
communications and technology (ICT) infrastructure and services.
In June 2010, the department established the Knowledge Information Technology
Committee to strengthen ICT governance. The committee is responsible for developing
a knowledge and information technology strategy to identify and endorse information
technology investment decisions and for ensuring that such decisions are effective.
The department’s desktop, network, telephone and help desk support services are delivered
under a memorandum of understanding with the Department of the Prime Minister and
Cabinet through their outsourced provider, ASG. The memorandum of understanding is
reviewed annually.
ICT services are delivered in‑house through a centralised Information Technology Branch
and include ICT governance and policy development; business solutions; and development
and support for the department’s critical non‑standard systems, including the Online
System for Comprehensive Activity Reporting (OSCAR), GEARS, the NGER Disclosure
Tool and CRM. The branch provides high‑priority and executive‑level desktop support to
department and ministerial offices.
Key achievements in 2009–10 included:
• the refreshment of the department’s desktop environment and other productivity tools
(30 per cent of staff now use mobile computing technologies, including remote access,
wi‑fi and Blackberries)
• the establishment of a dedicated, fully equipped IT training room that can
accommodate 18 participants
• following the government’s announcement to delay the introduction of the CPRS, the
development of a knowledge‑base system to capture the information and knowledge
associated with the Australian Climate Change Regulatory Authority (ACCRA) program
(this will ensure that the policies, processes, data and systems developed for ACCRA will
be available for future use by agencies establishing a regulatory authority).
A priority for the department in 2010 is to transition the 411 DEWHA staff transferred
under the recent machinery of government changes to the department’s network
environment.

4 Management of human resources
In 2009–10, the department underwent significant change as a result of the machinery of
government changes in March 2010. The Corporate Support Division focused on providing
managers with the required tools and systems to continue to deliver against key corporate
objectives whilst transitioning over 400 staff. In recognition of the increased size and
complexity of the department, a Human Resources Branch was created within a new
departmental organisational structure and an HR adviser was employed on a temporary
basis to support the Executive, managers and employees through the change process.
One of the major initiatives was the purchase, configuration and implementation of the
Aurion Human Resource Management Information System (HRMIS). The HRMIS allows
for the accurate and timely processing of entitlements and is compatible with the finance
system for accounting purposes; the employee self‑service facility allows for maximum
input from employees and delivers much enhanced reporting capability to managers.
At 30 June 2010, staff in the department were covered by one of the following:
• the Department of Climate Change Collective Agreement 2009–2011
• Australian Workplace Agreements
• determinations made under section 24 of the Public Service Act 1999
• common law contracts.
Workforce planning and recruitment

In 2010, the department began the development of a human capital framework to identify
the core capabilities required within the department for the next three years. In 2010–11
this framework will be supported by the implementation of a workforce plan and talent
management initiatives.
The Human Capital Framework is designed to adopt the recommendations from Ahead of
the Game: Blueprint for the Reform of Australian Government Administration and aims
to position the department to implement key initiatives that not only build future capability
for the department but also contribute to capability across the Australian Public Service.
In response to the government’s decision to delay the CPRS, the department ran a
successful redeployment for the affected staff. This ensured that knowledge and skills were
appropriately retained and the costs of new recruitment were reduced.

Performance development framework 4
In 2009–10, the department completed the first full cycle of the DCCEE Performance
Development Framework. The framework is designed to address both organisational and
individual needs for performance and capability development.
The framework focuses on:
• setting out the department’s core capabilities
• defining the desired behaviour of individuals by classification level
• identifying professional and career development goals through regular conversations
and feedback
• encouraging upward feedback
• planning for individual careers.
Following the machinery of government changes, both the department and DEWHA
finalised their performance agreements. For the 2010–11 reporting period, all staff will be
transitioned to the department’s framework.
Learning and development

In 2009–10, the department continued to focus on investing in its people by
providing all staff with targeted development opportunities. With guidance from
the Learning and Development Committee, there was a strong strategic approach to
learning and development to ensure the ongoing ability of the organisation to achieve
operational objectives.
The departmental learning and development activities resulted in 31 training programs
being conducted, with 542 staff attending at a cost of almost $300,000. In addition to
this, the department supported external development through the studies assistance
program, with additional targeted programs undertaken at the division and branch
level. Expenditure on learning and development was 1.78 per cent of total expenditure
on salaries.
Graduate development program

The department places a high priority on recruiting, developing and retaining high‑quality
graduates from a range of appropriate disciplines.

In November 2009, the participants of the first departmental graduate program
4 successfully completed the program and transitioned into ongoing roles within
the department.
The program provides participants with professional development throughout the year of
their program and includes rotations through different areas of the department.
In 2010 the department recruited 10 graduates. While this was less than the anticipated
figures, the quality of graduates undertaking the 2010 program is very high.
In 2011 the department is looking to continue its investment in graduates and is again
looking to expand the graduate program.
Staffing information
Staffing numbers increased from a total of 408 at 1 July 2009 to a total of 1,027 at
30 June 2010.
In 2009–10 the department managed a number of external influences on staffing that had
significant internal impacts on staffing numbers. These included:
• the fostering of a group intended to become the climate change regulator
(as functions were developed to support the planned launch of the regulator, staffing
increased accordingly)
• the delay of the implementation of the CPRS and the resulting redeployment program
• the machinery of government changes of March 2010, with the resulting pressures on
HR systems, ICT and accommodation.
These events created a turbulent and rapidly evolving staffing environment for the
department to manage. In this context the department continued to build capacity to
deliver business outcomes.
Table 5 details staffing numbers as at 30 June 2010.

Table 5 Operative and paid inoperative staff, by classification and gender,
at 30 June 2010
4
Ongoing Non-ongoing
Full-time Part-time Full-time Part-time Casual
Classification Male Female Male Female Male Female Male Female Male Female Total
APS1 – 1 – – – – – – – – 1
APS2 1 2 – 1 9 19 – 4 – – 36
APS3 3 6 – 1 13 30 1 3 3 5 65
APS4 8 38 – 3 14 33 1 2 – – 99
APS5 34 71 3 7 15 21 1 3 – – 155
APS6 68 107 2 9 10 11 1 – – – 208
EL1 91 98 8 21 8 11 – 3 – – 240
EL2 58 59 – 3 3 5 – 1 – – 129
GRAD 5 5 – – – – – – – – 10
LO 1 2 – – – – – – – – 3
PAO1 – 3 – – – – – – – – 3
PAO2 – 4 – – – – – – – – 4
PAO3 1 10 – 2 1 – – – – – 14
RS 1 1 – – – – – – – – 2
SEC 1 – – – – – – – – – 1
SES1 15 16 – – – 1 – – – – 32
SES2 4 5 – – 1 – – – – – 10
SES3 4 – – – – – – – – – 4
SLO 1 3 – – – – – – – – 4
SPAO 1 1 – – 1 – – – – – 3
SPRS 1 – – – – – – – – – 1
SRS 3 – – – – – – – – – 3
Total 301 432 13 47 75 131 4 16 3 5 1027
APS = Australian Public Service, EL = Executive Level, GRAD = Graduate, LO = Legal Officer, PAO = Public Affairs
Officer, RS = Research Scientist, SEC = Secretary, SES = Senior Executive Service, SLO = Senior Legal Officer,
SPAO = Senior Public Affairs Officer, SPRS = Senior Principal Research Scientist, SRS = Senior Research Scientist
Note: This table does not include employees in the department on secondment.

4 Remuneration and performance appraisal of Senior
Executive Service employees
Terms and conditions for all Department of Climate Change and Energy Efficiency
Senior Executive Service (SES) employees are contained in either individual section 24(1)
determinations made by the Secretary or common law contracts. The department is in the
process of terminating any outstanding Australian Workplace Agreements (AWAs) for
SES employees in accordance with the relevant provisions in the Fair Work Act 2009.
SES Band 3 officers participate in a Performance Development Cycle and are assessed
by the Secretary against the Australian Public Service Commission’s Senior Executive
Leadership Capability Framework. SES Band 1 and Band 2 officers participate in the
department’s Performance Development Framework and have their performance assessed
against the department’s Capability Framework.
The department’s Executive Board, convened as the Remuneration Committee, makes
assessments which may result in salary increases based on sustained performance and
contribution. The department no longer operates a performance bonus system.
In 2009–10, no SES officers were eligible for performance pay.
Table 6 provides details of SES salary scales. Additional information on remuneration and
performance pay is set out in Note 12 in the financial statements.
Table 6 Senior Executive Service salary scales, 2009–10
Classification Minimum ($) Maximum ($)
SES Band 1 175,600 205,900
SES Band 2 215,700 253,400
SES Band 3 265,700 312,400
Remuneration of non-Senior Executive Service employees

In 2009–10, remuneration and employment conditions for non‑SES employees were
determined by the Department of Climate Change Collective Agreement 2009–2011,
which came into effect on 5 June 2009. Non‑SES staff who transferred as a result of the
machinery of government changes of March 2010 were also translated into the terms and
conditions of the collective agreement.
The rates of remuneration shown in Table 7 applied to non-SES employees at

30 June 2010.

Table 7 Collective agreement salary scales at 30 June 2010
4
Classification Minimum ($) Maximum ($)
APS1 39,956 45,319
APS2 47,588 50,779
APS3 52,963 57,331
APS4 59,515 62,791
APS5 64,975 68,252
APS6 70,982 80,810
LO 54,419 80,810
SLO 87,362 110,476
PLO 116,663 125,988
PAO1 59,515 68,252
PAO2 74,258 87,362
PAO3 91,365 116,663
SPAO1 120,163 120,163
SPAO2 127,480 127,480
RS 70,982 99,374
SRS 104,288 124,149
PRS 127,872 139,730
SPRS 148,081 161,849
EL1 87,362 111,299
EL2 104,288 137,595
APS = Australian Public Service, LO = Legal Officer, SLO = Senior Legal Officer, PLO = Principal Legal Officer,
PAO = Public Affairs Officer, SPAO = Senior Public Affairs Officer, RS = Research Scientist, SRS = Senior Research
Scientist, PRS = Principal Research Scientist, SPRS = Senior Principal Research Scientist, EL = Executive Level
At 30 June 2010, three non‑SES staff were on Australian Workplace Agreements. Their
conditions were preserved under the machinery of government provisions specified in
section 72 of the Public Service Act. The department deals with each agreement on a
case‑by‑case basis within the existing remuneration framework.
In 2009–10, no non‑SES staff were eligible for performance pay.

4 Access and equity
The department is developing a workplace diversity and disability strategy and an access
and equity strategy to support staff. Table 8 shows staff by self‑identified equal opportunity
target group.
Table 8 Staff profile by equal employment opportunity target group, at 30 June 2010
Classification Female ESL ATSI Disability
Graduates 5 – – –
APS1 1 – – –
APS2 26 – – –
APS3 45 1 – –
APS4 76 2 1 –
APS5 102 4 – –
APS6 127 4 1 2
LO 2 – – –
SLO 3 – – –
PLO – – – –
PAO1 3 1 – –
PAO2 4 – – –
PAO3 12 – – –
SPAO 1 – – –
RS 1 – – –
SRS – 1 – –
EL1 133 7 – 2
EL2 68 – – 2
SES Band 1 17 1 – 1
SES Band 2 5 1 – –
SES Band 3 – – – –
Total 631 22 2 7
APS = Australian Public Service, LO = Legal Officer, SLO = Senior Legal Officer, PLO = Principal Legal Officer,
PAO = Public Affairs Officer, SPAO = Senior Public Affairs Officer, RS = Research Scientist, SRS = Senior Research
Scientist, EL = Executive Level, SES = Senior Executive Service, ESL = English as a second language, ATSI = Aboriginal
or Torres Strait Islander background
Note: Includes operative and paid inoperative staff.

Reconciliation action plan 4
The department recognises the unique diversity of Indigenous people and their
communities, acknowledges the traditional custodians of the land where staff work,
and pays respect to all elders, both past and present. The department has formed a
reconciliation action plan (RAP) committee and is developing its first RAP, planned for
release by November 2010. The RAP committee’s focus is consistent with Reconciliation
Australia’s expressed desire of ‘turning good intentions into action’. Real reconciliation
can be initiated by simply promoting greater awareness and understanding of Indigenous
issues across the department, inviting participation and the contribution of ideas and
innovation in making a difference and in longer‑term progress.
Commonwealth Disability Strategy

The Commonwealth Disability Strategy was introduced in 1994 to assist agencies to meet
their obligations under the Disability Discrimination Act 1992. The framework aims
to ensure that people with disability are included in Australian Government policies,
programs and services and can participate in them.
The strategy includes a performance reporting framework built around the five key roles
of government: policy adviser, regulator, purchaser, provider and employer. The employer
role is reported through the State of the Service agency survey conducted by the Australian
Public Service Commission.
In its purchaser role, the department gives consideration to purchasing goods and services
that are consistent with the requirements of the Disability Discrimination Act.

Feature:
4 Staff awards
Queen’s Birthday Honours List
Barry Sterland, First Assistant Secretary Emissions Trading Division, was awarded the Public
Service Medal in recognition of his outstanding public service in driving climate change policy
in Australia and internationally.
Queen’s Birthday 2010—Secretary’s Merit Awards

Louise Courtney (Home Insulation Program Review
Office—Home Insulation Stakeholder Relations and
Assurance) in recognition of Louise’s outstanding
contribution to the Green Loans Program and the
Home Insulation Program and for her resilience and
ability to support and manage her team.
Jo Evans (International Division—Finance, Markets
and Forests) in recognition of Jo’s extraordinary
contribution to the International Division and the
department by securing whole‑of‑government
agreement to an Australian contribution to
international climate change financing efforts, as well
as representing the department at COP 15 in
Copenhagen and participating in the Australian Public Jo Evans (right) receives a Secretary’s Merit Award
from Secretary Martin Parkinson
Service Reform Advisory Group.
Skye Glenday (International Division—Finance, Markets and Forests) in recognition of Skye’s
outstanding capacity to collaborate and deliver results in her work on the Finance and Activities
Survey for Reducing Deforestation and Forest Degradation in Developing Countries.
Stuart Kinsella (ACCRA Establishment and CPRS Implementation Division—e Business)
in recognition of Stuart’s outstanding contribution to the development of the CPRS auction
solution under exceptional circumstances.
Radi Kovacevic (Governance and Program Support Division—Program Management
Office) in recognition of Radi’s work in establishing a best practice program management
capability that provided support to senior management as well as clarity and rigor to
implementation programs.

Andrew McGee (Home Insulation Program Review Office—Home Insulation Foil Inspection
Safety Program) in recognition of Andrew’s outstanding contribution to the Foil Insulation 4
Safety Program and exceptional management and team‑building skills.
Alison McMorrow (Adaptation, Land and Communications Division—Land Management) in
recognition of Alison’s outstanding contribution to the success of Greenhouse Frontiers.
ACCRA Transition Team (Natalie Howson, Harry Rothenfluh, Tanya Findlay, Jane Heffernan,
David Mitchell, Geoff Williams, Lesley Butt, Jodie Arrow, Pauline Hore) in recognition of
the team’s outstanding contribution to the department in coordinating the closure process
for ACCRA.
Allocations Team of ACCRA Establishment and CPRS Implementation Division—Business
Delivery (Perdi Mitchell, Ben Tifan, Angela Hudson, Jeremy Dore, Tracey Lowe, Julian
Henschke, Mark Donovan) for an outstanding contribution to the design of the ACCRA
regulatory functions, including CPRS, reforestation, offsets, synthetic greenhouse gases and the
industry assistance schemes.
Corporate Support Division—Personnel Operations (led by Lesley Butt) in recognition of the
team’s resilience and problem‑solving abilities while providing a high‑level service under
challenging circumstances.
Household Water Rebates Section of Demand Driven Programs—Solar Programs (led by
David Jarrat and Rebecca Collins) in recognition of the team’s outstanding contribution to the
household water rebates program and introduction of the solar hot‑water component of the
Renewable Energy Bonus Scheme.
Renewable Energy Team (Shayleen Thompson, Robert Raether, Sarah Balmanno, Richard de
Ferranti, Alain Samarcq, Andrew Bray, Daniel Boettcher, Joelle Richardson, Laura Allison,
Peter Nicholas (Australian Government Solicitor), John Jende, Scott Walker, Lachlan Grove,
Alan Hopkins) in recognition of the team’s outstanding contribution in developing policy
for changes to the Renewable Energy Target, as well supporting the Minister through the
legislative process.
Renewables and Energy Efficiency Division Divisional Support Unit (led by Janelle Hammond
and Jacky Tierney) in recognition of the team’s provision of exceptional financial and human
resources support across the department during the integration of the energy efficiency
components of the new department.

4 Asset management
The department manages current and non‑current assets in accordance with the terms
of the Chief Executive Instructions and relevant accounting standards. As a result of
the machinery of government changes in March 2010 the department undertook a full
stocktake of its asset base. The department engaged valuers to undertake a revaluation of
the department’s leasehold improvements and office equipment.
The results of the stocktake and revaluation are reported in the department’s annual
financial statements.
Purchasing and procurement

The department’s purchasing and procurement activities are undertaken in accordance
with the Commonwealth Procurement Guidelines. Under the guidelines, the core principle
underpinning procurement is value for money.
All open tender opportunities of $80,000 and above (inclusive of GST) are advertised on
AusTender. All procurements of $70,000 and above (inclusive of GST) are considered
by the department’s Procurement Review Board to ensure that they are conducted in
accordance with Division 2 of the Commonwealth Procurement Guidelines.
Within the department, the Procurement Review Board reviews and reports on
procurement activities. The Procurement Review Board is supported by the Business
Services Branch, which monitors compliance and provides advice to staff on
procurement activities.
The department continues to revise and update its procurement processes and policies to
improve their effectiveness and usability. Staff have access to the procurement policies,
procedures and templates through the department’s intranet. During 2009–10 and in
response to a need for a stronger focus on procurement compliance, the department
developed procurement training sessions and continued to provide relevant staff with
administrative and legal advice and support on all aspects of procurement and contract
management. These measures ensured that staff working in procurement understood the
Commonwealth Procurement Guidelines and departmental procurement policies and
procedures. The procurement training was designed for rollout in early 2010 and included:
• the procurement framework, including obligations under the Financial Management
and Accountability Act and the Commonwealth Procurement Guidelines

• application of procurement in the department
4
• contract management principles
• mandatory reporting requirements
• consultancies and confidentiality.
The department’s annual Procurement Plan is available on the AusTender website
(www.tenders.gov.au), as is information on expenditure on contracts and consultancies.
Exempt contracts
In 2009–10, the Secretary did not exempt any standing offer or contract in excess of
$10,000 (inclusive of GST) from being published in AusTender on the basis that it would
disclose exempt matters under the Freedom of Information Act 1982.
Australian National Audit Office access clause

In 2009–10, all contracts negotiated above $100,000 provided for the Auditor‑General to
have access to the contractor’s premises.
Purchaser–provider arrangements
The department had no purchaser–provider arrangements in place in 2009–10.

4 Consultancies
The department procures consultancy services in accordance with the Commonwealth
Procurement Guidelines and the department’s procurement framework.
During 2009–10, 101 new consultancy contracts were entered into, involving total actual
expenditure of $7,081,768. In addition, 15 ongoing consultancy contracts were active,
involving total actual expenditure of $1,464,061. These amounts include GST. The overall
total actual expenditure on new and ongoing consultancies in 2009–10 was $8,545,829
inclusive of GST.
The table summarising the new consultancy contracts let in 2009–10 valued at
$10,000 or more is published on the department’s website at
http://www.climatechange.gov.au/en/about/contracts.aspx.
Annual reports contain information about the actual expenditure on contracts for
consultants. Information on the value of contracts and consultancies is available on the
AusTender website (www.tenders.gov.au).

Feature:
Nishi building—the department’s 4
new accommodation
In 2009, the department undertook an open market process to identify commercial premises
that would meet the department’s long‑term accommodation needs. As a result of this process
the department identified a proposed A Grade, commercial office development known as the
‘New Acton, Nishi project’ (Nishi Building).
The Nishi Building fit‑out will be designed to achieve a minimum 5‑star rating under the
National Australian Built Environment Rating Systems (NABERS), with the base building
designed to meet both 5-star NABERS and 6-star Green Star ratings under the Green Building
Council of Australia protocols.
This objective is in line with the department’s mission. It is anticipated that the energy efficient
features of the building will provide a demonstration effect both in the Canberra commercial
property market and nationally. Subsequent to the market approach the department entered
into an Agreement For Lease (AFL) which commits the department to lease 12,250 m2 of the
Nishi Building subject to Public Works Committee approval.
On 24 June 2010, the House of Representatives passed the Public Works Committee’s
recommendation that the department’s proposed fit‑out of the Nishi Building should proceed.
The department’s office fit‑out will be integrated with the design of the base building and will
accommodate up to 750 employees in late 2012. The fit‑out will provide the opportunity for
the department to develop contemporary office accommodation which will have a high‑level
amenity for staff and visitors and will demonstrate opportunities for the adoption of leading
edge sustainable environmental initiatives that are practical, cost effective and fully capable for
adoption by other organisations.

4

Section 5
Financial statements
Section 5: Financial statements
Financial summary 145
Statement by Chief Executive and Chief Financial Officer 147
Independent Auditor’s Report 148
Statement of comprehensive income 150
Balance sheet 151
Statement of changes in equity 152
Cash flow statement 153
Schedule of commitments 154
Schedule of contingencies 156
Schedule of asset additions 157
Schedule of administered items 158
Notes to and forming part of the Financial Statements 163

Financial summary 5
How the department is funded

The Department of Climate Change and Energy Efficiency receives two types of funding:
departmental and administered. Departmental resources are used to produce goods
and services (outputs) at a quantity, quality and price endorsed by government. The
department also administers payments on behalf of government, which controls how we
use those funds and requires us to account for them separately.
Departmental finances
When the 2009–10 Budget was prepared, we expected to receive and spend $125.4 million
in the year. The department’s actual income of $134.9 million is $9.5 million higher as
a result of funding received through the Additional Estimates process (as a result of the
machinery of government change that expanded the department’s responsibilities to
include energy efficiency functions and increased revenue from independent sources).
We finished the year with a deficit of $6.7 million. The deficit was mainly due to higher
than forecast expenses for energy efficiency functions.
Significant items in the financial statements are:
• total income of $134.9 million—mostly reflecting revenue from government of
$122.0 million
• expenses of $141.6 million—the majority of which reflect payments to suppliers
($67.7 million) and employees ($67.4 million)
• assets of $104.6 million—the single largest asset is appropriation receivable from
government ($76.6 million), which relates to funding liabilities such as employee
provisions and payments due to suppliers and unspent capital appropriation
• liabilities of $44.0 million—the largest single liability was employee provisions
($22.1 million) followed by payments to suppliers ($15.6 million).

5 Administered finances
The department originally budgeted for expenses of $245.5 million in 2009–10, including
grants and supplier expenses administered on behalf of the Australian Government. An
increase in expenses of $467.2 million was funded following the machinery of government
change that transferred energy efficiency functions to the department. Actual expenses of
$492.7 million includes a provision of $147.0 million for rectification works related to the
Home Insulation Program.
Understanding our financial statements

The content and format of our financial statements is prescribed by the Minister for
Finance and Deregulation under the Financial Management and Accountability Act 1997.
Our departmental statements include:
• A statement of comprehensive income (which shows our income and expenses on
an accrual basis)
• A balance sheet (which details our assets and liabilities, as well as the amount of the
Australian Government’s equity at year end)
• A statement of changes in equity (which shows how the Australian Government
equity we hold has changed due to changes in asset valuations, accumulated surpluses
and capital transactions)
• A statement of cash flows (which shows where the cash we used during the year
came from, and how it was used).
Administered items are detailed in the accompanying schedules and further information is
provided in the explanatory notes. Information on related topics is available elsewhere in
this report as follows:
• procurement policies and practices (page 138)
• consultancies (page 140)
• payments for market research and advertising (page 221).

5

5

5

STATEMENT OF COMPREHENSIVE INCOME
5 for the period ended 30 June 2010
2010 2009
Notes $'000 $'000
EXPENSES
Employee benefits 3A 67,407 40,623
Supplier expenses 3B 67,667 42,169
Grants 3C 940 1,991
Depreciation and amortisation 3D 3,737 1,735
Write-down and impairment of assets 3E 1,767 572
Finance costs 3F 47 -
Total expenses 141,565 87,090
LESS:
OWN-SOURCE INCOME
Own-source revenue
Sale of goods and rendering of services 4A 9,636 2,373
Total own-source revenue 9,636 2,373
Gains
Other 4B 3,025 131
Total gains 3,025 131
Total own-source income 12,661 2,504
Net cost of services 128,904 84,586
Revenue from Government

(Deficit) attributable to the Australian 4C 121,958 79,459
Government (6,946) (5,127)
OTHER COMPREHENSIVE INCOME

Changes in asset revaluation reserve 271 6
Total comprehensive (loss) attributable to the
Australian Government (6,675) (5,121)
The above statement should be read in conjunction with the accompanying notes.

BALANCE SHEET
as at 30 June 2010 5
2010 2009
Notes $’000 $’000
ASSETS
Financial Assets
Cash and cash equivalents 5A 791 731
Trade and other receivables 5B 80,935 30,379
Accrued revenue 5C 89 186
Total financial assets 81,815 31,296
Non-Financial Assets
Land and buildings 6A,C 4,885 1,588
Property, plant and equipment 6B,C 7,255 3,268
Intangibles 6D 10,045 8,996
Other 6E 600 578
Total non-financial assets 22,785 14,430
Total Assets 104,600 45,726
LIABILITIES
Payables
Suppliers 7A 15,590 10,385
Grants 7B 104 1,980
Other 7C 3,324 8,665
Total payables 19,018 21,030
Provisions
Employee provisions 8A 22,107 11,559
Other 8B 2,841 169
Total provisions 24,948 11,728
Total Liabilities 43,966 32,758
Net Assets 60,634 12,968
EQUITY
Parent Entity Interest
Contributed equity 70,942 16,601
Reserves 277 6
Retained surplus (accumulated deficit) (10,585) (3,639)
Total equity 60,634 12,968

5
STATEMENT OF CHANGES IN EQUITY
for the period ended 30 June 2010
Retained Asset revaluation Contributed Total

earnings reserve equity/capital equity
2010 2009 2010 2009 2010 2009 2010 2009
$’000 $'000 $’000 $’000 $’000 $’000 $’000 $’000
Opening balance
Balance carried forward from previous period (3,639) 1,488 6 6 16,601 15,601 12,968 17,095
Adjusted opening balance (3,639) 1,488 6 6 16,601 15,601 12,968 17,095
Comprehensive income
Other comprehensive income - - 271 - - - 271 -
Surplus (Deficit) for the period (6,946) (5,127) - - - - (6,946) (5,127)
Total comprehensive income (6,946) (5,127) 271 - - - (6,675) (5,127)
of which:
Attributable to the Australian Government (6,946) (5,127) 271 - - - (6,675) (5,127)
Transactions with owners

Contribution by owners
Appropriation (equity injection) - - - - 54,525 1,000 54,525 1,000
Other appropriation transferred - - - - 749 - 749 -
Distribution to owners
Extinguishment of Appropriation - - - - (74) - (74) -
Restructuring – DEWHA (Refer Note 9) - - - - (859) - (859) -
Sub-total transactions with owners - - - - 54,341 1,000 54,341 1,000

Closing balance as at 30 June (10,585) (3,639) 277 6 70,942 16,601 60,634 12,968
Closing balance attributable to the Australian
Government (10,585) (3,639) 277 6 70,942 16,601 60,634 12,968
CASH FLOW STATEMENT
for the period ended 30 June 2010 5
2010 2009
Notes $’000 $’000
OPERATING ACTIVITIES
Cash received
Goods and services 2,862 2,483
Appropriations 121,279 81,429
Net GST received 5,897 3,623
Total cash received 130,038 87,535
Cash used
Employees 59,403 31,655
Suppliers 68,733 48,284
Grants 2,816 811
Total cash used 130,952 80,750
Net cash (used by) operating activities 10 (914) 6,785
INVESTING ACTIVITIES
Cash used
Purchase of property, plant and equipment 4,072 4,028
Purchase of intangibles 3,973 5,502
Net cash (used by) investing activities (8,045) (9,530)
FINANCING ACTIVITIES
Cash received
Equity Injection 9,019 3,100
Total cash received 9,019 3,100
Net cash from financing activities 9,019 3,100
Net increase (decrease) in cash held 60 355

Cash and cash equivalents at the beginning of the
reporting period 731 376
Cash and cash equivalents at the end of the
reporting period 5A 791 731

SCHEDULE OF COMMITMENTS
5 as at 30 June 2010
2010 2009
BY TYPE $’000 $’000
Commitments receivable
GST recoverable on commitments (4,286) (1,643)
Total commitments receivable (4,286) (1,643)
Commitments payable
Capital commitments
1
Property, plant and equipment 2,632 1,473
Intangibles 2 89 2,715
Total capital commitments 2,721 4,188
Other commitments
Operating leases 3 22,108 931
Project commitments 4 4,120 3,539
Other 5 18,229 12,764
Total other commitments 44,457 17,234
Net commitments by type 42,892 19,779
BY MATURITY
Capital commitments
One year or less (247) -
From one to five years - -
Total capital commitments (247) -
Other commitments
One year or less (2,561) (1,454)
From one to five years (1,476) (189)
Over five years (2) -
Total other commitments (4,039) (1,643)
Commitments payable
Capital commitments
One year or less 2,721 4,169
From one to five years - 19
Total capital commitments 2,721 4,188
Other commitments
From one to five years 16,261 3,511
Over five years 21 -
Net commitments by maturity 42,892 19,779
Note: Commitments are GST inclusive where relevant.

SCHEDULE OF COMMITMENTS
as at 30 June 2010 (continued) 5
1. Property, plant and equipment commitments relate to payments DCCEE is required to make to the
Department of Prime Minister and Cabinet under the MOU between the agencies for ongoing software
support.
2. Intangible commitments relate to the Department's internally developed information systems.
3. Operating leases are effectively non-cancellable.
4. Project commitments relate to amounts payable under established funding arrangements.
5. Other commitments relate to contracts for goods and services in respect of which the contracted
Nature of lease/general description of leasing arrangement
Leases for office accommodation:
The Department leases office accommodation, car parking spaces and storage area under 9 separate
lease arrangements and two memorandum of understanding between government agencies. Lease
payments are subject to an unweighted average increase of 3.09% per annum. Lease payments are
both floating and fixed.
The above schedule should be read in conjunction with the accompanying notes.

SCHEDULE OF CONTINGENCIES
5 as at 30 June 2010
The department is not aware of any contingent liabilities or assets as at signing date that would
require disclosure in the Financial Statements.
Details of each class of contingent liabilities and contingent assets are disclosed in Note 11:
Contingent Liabilities and Assets, along with information on significant remote contingencies and
contingencies that cannot be quantified.

SCHEDULE OF ASSET ADDITIONS
The following non-financial non-current assets were added in 2009–10
Leasehold Property, plant & Intangibles Total
improvements equipment
$’000 $’000 $’000 $’000
By purchase – appropriation equity 918 4,386 3,715 9,019
By purchase – appropriation ordinary annual services 1,673 - - 1,673
Assets received free of charge (refer Note 4B) 1,916 - - 1,916
Assets recognised for the first time (refer Note 4B) - 934 - 934
Restructuring – DEWHA (Refer Note 9A) - 24 - 24
Total additions 4,507 5,344 3,715 13,566
The following non-financial non-current assets were added in 2008–09

Leasehold Property, plant &
Improvements equipment Intangibles Total
$’000 $’000 $’000 $’000
By purchase – appropriation equity 60 3,350 - 3,410
By purchase – appropriation ordinary annual services 1,085 - 4,720 5,805
Total additions 1,145 3,350 4,720 9,215
5
157
SCHEDULE OF ADMINISTERED ITEMS
5 2010 2009
Notes $’000 $’000
Income administered on behalf of Government
Expenses administered on behalf of Government

Suppliers expenses 15A 64,948 16,543

Subsidies 15B 6,255 -
Grants 15C 274,540 21,862
Home Insulation Expenses 15D 146,972 -
Total expenses administered on behalf of Government 492,715 38,405
This schedule should be read in conjunction with the accompanying notes.

SCHEDULE OF ADMINISTERED ITEMS (continued)
2010 2009 5
Notes $’000 $’000
Assets administered on behalf of Government
as at 30 June 2010
Financial assets
Cash and cash equivalents 16A 159 -
Receivables 16B 6,929 9
Investments using equity method of accounting 16C 198 -
Total financial assets 7,286 9
Non-financial assets
Other 16D 1,650 47
Total non-financial assets 1,650 47
Total assets administered on behalf of
Government 8,936 56
Liabilities administered on behalf of Government

as at 30 June 2010
Payables
Suppliers 17A 35,043 1,073
Grants 17B 117,112 880
Total payables 152,155 1,953
Provisions
Home Insulation Program 17C 146,972 -
Total provisions 146,972 -
Total liabilities administered on behalf of Government 299,127 1,953

5 2010 2009
Notes $’000 $’000
Administered cash flows
OPERATING ACTIVITIES
Cash received
Other - 71
Total cash received - 71
Cash used
Grant payments 322,745 25,740
Subsidies 6,255 -
Suppliers 35,691 19,817
Net cash flows from (used by) operating activities (364,691) (45,486)
Net increase (decrease) in cash held (364,691) (45,486)
Cash and cash equivalents at the beginning of the

reporting period - 35
Cash from Official Public Account for:
– Appropriations 370,713 45,612
370,713 45,647
Cash to Official Public Account for:
– Appropriations (5,863) (161)
(5,863) (161)
Cash and cash equivalents at the end of the
reporting period 16A 159 -

2010 2009 5
$’000 $’000
Administered commitments
as at 30 June 2010
BY TYPE
GST recoverable on commitments (17,536) (1,949)
Other commitments
Project commitments 1 321,930 17,969
Other 2 1,005 1,516
Net commitments by type 305,399 17,536
BY MATURITY
Other commitments receivable
One year or less (14,446) (1,023)
From one to five years (3,090) (926)
Over five years - -

Total other commitment receivable (17,536) (1,949)
Commitments payable
Other commitments
From one to five years 36,484 9,263
Over five years - -
Net commitments by maturity 305,399 17,536
Note: Commitments are GST inclusive where
relevant.
1. Project commitments relate to amounts payable under established funding arrangements.

2. Other commitments relate to amounts payable for professional expertise in the area of climate
change.

5
Administered contingencies
as at 30 June 2010
The department is aware of contingent liabilities and assets at the signing date. Details of each class of
contingent liabilities assets are disclosed in Note 19: Administered contingent assets and liabilities,
along with information on significant remote contingencies and contingencies that cannot be quantified.

Statement of comprehensive income
Balance sheet
Statement of changes in equity
Cash flow statement
Schedule of commitments
Schedule of contingencies
NOTES
ScheduleTO ANDadditions
of asset FORMING PART OF THE FINANCIAL STATEMENTS
5
CONTENTS
Schedule of administered items
Note 1: Summary
Statement by CEOofand
significant
CFO accounting policies
Note 2: Events
Statement after the reporting
of comprehensive period
income
Note 3: Expenses
Balance sheet
Note 4: Income
Statement of changes in equity
Note
Cash 5: Financial
flow assets
statement
Note 6: Non-financial
Schedule assets
of commitments
Note 7: Payables
Schedule of contingencies
Note 8: Provisions
Schedule of asset additions
Note 9: Restructuring
Schedule of administered items
Note 10: Cash flowofreconciliation
1: Summary significant accounting policies
Note 2:
11:Events
Contingent liabilities
after the and period
reporting assets
Note 12: Senior executive remuneration
3: Expenses
Note 13: Remuneration of auditors
4: Income
Note 14: Financialassets
5: Financial instruments
Note 15: Expenses administered
6: Non-financial assets on behalf of Government
Note 16: Assets administered on behalf of Government
7: Payables
Note 17: Liabilities administered on behalf of Government
8: Provisions
Note 18: Administered reconciliation table
9: Restructuring
Note 19:
10: Administered contingent assets and liabilities
Cash flow reconciliation
Note 20:
11: Administered investments
Contingent liabilities and assets
Note 12:
21: Senior
Administered financial
executive instruments
remuneration
Note 22:
13: Appropriations
Remuneration of auditors
Note 23:
14: Compensation and debt relief
Financial instruments
Note 24:
15: Reporting
Expenses of outcomes on behalf of Government
administered
Note 19: Administered contingent assets and liabilities
Note 20: Administered investments
Note 21: Administered financial instruments
Note 22: Appropriations
Note 23: Compensation and debt relief
Note 24: Reporting of outcomes

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
5 1.1 Objectives of Department of Climate change and Energy Efficiency
The Department of Climate Change and Energy Efficiency (the Department) is an Australian government
controlled entity. The objective of the Department is to lead the development and coordination of Australia’s
climate change and energy efficiency policy. The Department is responsible for policy advice, policy
implementation and program delivery in four areas: reducing Australia’s greenhouse gas emissions;
promoting energy efficiency; adapting to climate change; and helping to shape a global climate change
solution.
The Department is structured to meet one outcome: Reduction of Australia’s greenhouse gas emissions,
adaption 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.
The continued existence of the Department in its present form and with its present programs is dependent
on Government policy and on continuing appropriations by Parliament for the Department’s administration
and programs.
The Department’s activities contributing toward these outcomes are classified as either departmental or
administered. Departmental activities involve the use of assets, liabilities, income and expenses controlled
or incurred by the Department in its own right. Administered activities involve the management or oversight
by the Department, on behalf of the Government, of items controlled or incurred by the Government.
Departmental and Administered activities are identified under one outcome with four programs being:
1.1 Reducing Australia’s greenhouse gas emissions
1.2 Improving Australia’s energy efficiency
1.3 Adapting to climate change
1.4 Helping to shape a global climate change solution
1.2 Basis of preparation of the financial statements
The financial statements are required by section 49 of the Financial Management and Accountability
Act 1997 and are general purpose financial statements.
The Financial Statements have been prepared in accordance with:
Finance Minister’s Orders (being the Financial Management and Accountability Orders (Financial
Statements for reporting periods ending on or after 1 July 2009) (FMOs); and
Australian Accounting Standards and Interpretations issued by the Australian Accounting Standards
Board (AASB) that apply for the reporting period.
The financial statements have been prepared on an accrual basis and in accordance with the historical cost
convention, except for certain assets and liabilities at fair value. Except where stated, no allowance is made
for the effect of changing prices on the results or the financial position.
The financial statements are presented in Australian dollars and values are rounded to the nearest
thousand dollars unless otherwise specified.
Unless an alternative treatment is specifically required by an accounting standard or the FMOs, assets and
liabilities are recognised in the balance sheet when and only when it is probable that future economic
benefits will flow to the Department or a future sacrifice of economic benefits will be required and the
amounts of the assets or liabilities can be reliably measured. However, assets and liabilities arising under
agreements equally proportionately unperformed are not recognised unless required by an Accounting
Standard. Liabilities and assets that are unrecognised are reported in the Schedule of Commitments or the
Schedule of Contingencies.
Unless alternative treatment is specifically required by an accounting standard, income and expenses are
recognised in the statement of comprehensive income when and only when the flow, consumption or loss of
economic benefits has occurred and can be reliably measured.
Administered revenues, expenses, assets and liabilities and cash flows reported in the Schedule of
Administered Items and related notes are accounted for on the same basis and using the same policies as
for departmental items, except where otherwise stated at Note 1.19.

1.3 Significant accounting judgements and estimates
In the process of applying the accounting policies listed in this note, the Department has made no
5
accounting assumptions but has made a significant estimates which may have a significant risk of causing a
material adjustment to carrying amounts of administered liabilities within the next accounting period. (Refer
Note 1.19)
1.4 New Australian Accounting Standards
Adoption of new Australian Accounting Standard requirements
No accounting standard has been adopted earlier than the application date as stated in the standard. Of the
new standards, amendments to standards and interpretation issues by the Australian Accounting Standards
board that are applicable to the current period, none have had a material impact.
Future Australian Accounting Standard requirements
Of the new standards, amendments to the standards and interpretations issued by the Australian
Accounting Standards Board are applicable to future periods, none have had a material financial impact on
the Department.
1.5 Revenue
Revenue from Government
Amounts appropriated for departmental programs for the year (adjusted for any formal additions and
reductions) are recognised as revenue when the Department gains control of the appropriation, except for
certain amounts that relate to activities that are reciprocal in nature, in which case revenue is recognised
only when it has been earned.
Appropriations receivable are recognised at their nominal amounts.
Resources received free of charge
Resources received free of charge are recognised as revenue when, and only when, a fair value can be
reliably determined and the services would have been purchased if they had not been donated. Use of
those resources is recognised as an expense.
Resources received free of charge are recorded as either revenue or gains depending on their nature.
Other types of revenue
Revenue from the sale of goods is recognised when:
the risks and rewards of ownership have been transferred to the buyer;
the Department retains no managerial involvement or effective control over the goods;
the revenue and transaction costs incurred can be reliably measured; and
it is probable that the economic benefits associated with the transaction will flow to the entity.
Revenue from rendering of services is recognised by reference to the stage of completion of contracts at the
reporting date. The revenue is recognised when:
the amount of revenue, stage of completion and transaction costs incurred can be reliably
measured; and
the probable economic benefits associated with the transaction will flow to the entity.
The stage of completion of contracts at the reporting date is determined by reference to the proportion that
costs incurred to date bear to the estimated total costs of the transaction.
Receivables for goods and services, which have 30 day terms, are recognised at the nominal amounts due
less any impairment allowance account. Collectability of debts is reviewed at balance date. Impairment
allowances are made when collectability of the debt is no longer probable.
The Department has not earned any interest revenue.

1.6 Gains
5 Resources received free of charge
Resources received free of charge are recognised as gains when, and only when, a fair value can be
reliably determined and the services would have been purchased if they had not been donated. Use of
those resources is recognised as an expense.
Contributions of assets at no cost of acquisition or for nominal consideration are recognised as gains at their
fair value when the asset qualifies for recognition, unless received from another government department or
authority as a consequence of a restructuring of administrative arrangements (Refer to Note 1.7).
1.7 Transactions with the Government as owner
Equity injections
Amounts appropriated which are designated as ‘equity injections’ for a year (less any formal reductions) are
recognised directly in contributed equity in that year.
Restructuring of administrative arrangements
The Department had a restructuring event in 2009–10. Details are disclosed at Note 9. At 8 March 2010 the
Department assumed control of the Renewable and Energy Efficiency Division and Energy Efficiency
Taskforce from the Department of Environment, Water Heritage and the Arts. The departmental
restructuring for employee liabilities took effect on 18 March 2010 and the other departmental assets and
liabilities on 31 May 2010. Administered restructuring took effect on 30 April 2010.
Net assets received from or relinquished to another Australian Government entity under a restructuring of
administrative arrangements are adjusted at their book value directly against contributed equity.
Other distributions to owners
The FMOs require that distributions to owners be debited to contributed equity unless in the nature of a
dividend.
1.8 Employee benefits
Liabilities for services rendered by employees are recognised at the reporting date to the extent that they
have not been settled.
Liabilities for ‘short-term employee benefits’ (as defined in AASB 119 Employee Benefits) and termination
benefits due within twelve months of end of reporting period are measured at their nominal amounts.
The nominal amount is calculated with regard to the rates expected to be paid on settlement of the liability.
All other long-term employee benefits are measured as the present value of the estimated future cash
outflows to be made in respect of services provided by employees up to the reporting date.
Leave
The liability for employee benefits includes provision for annual leave and long service leave. No provision
has been made for sick leave as all sick leave is non-vesting and the average sick leave taken in future
years by employees of the Department is estimated to be less than the annual entitlement for sick leave.
The leave liabilities are calculated on the basis of employees’ remuneration, including the Department’s
employer superannuation contribution rates to the extent that the leave is likely to be taken during service
rather than paid out on termination.
The liability for long service leave has been determined by reference to the work of the Australian
Government Actuary (AGA) in June 2010. The estimate of the present value of the liability takes into
account attrition rates and pay increases through promotion and inflation.
Separation and redundancy
Provision is made for separation and redundancy benefit payments only when the Department has
developed a detailed formal plan for the terminations and has informed those employees affected that it will
carry out the terminations.
Superannuation
Staff of the Department are members of the Commonwealth Superannuation Scheme (CSS), the Public
Sector Superannuation Scheme (PSS), the PSS accumulation plan (PSSap) or a commercial
superannuation scheme.

The CSS and PSS are defined benefit schemes for the Australian Government. The PSSap is a defined
contribution scheme. 5
The liability for defined benefits is recognised in the financial statements of the Australian Government and
is settled by the Australian Government in due course. This liability is reported by the Department of
Finance and Deregulation as an administered item.
The Department makes employer contributions to the employee superannuation scheme at rates
determined by an actuary to be sufficient to meet the current cost to the Government of the superannuation
entitlements of the Department’s employees. The Department accounts for the contributions as if they were
contributions to defined contribution plans.
The liability for superannuation recognised as at 30 June represents outstanding contributions for the final
fortnight of the year.
1.9 Leases
A distinction is made between finance leases and operating leases. Finance leases effectively transfer from
the lessor to the lessee substantially all the risks and rewards incidental to ownership of leased assets. An
operating lease is a lease that is not a finance lease. In operating leases, the lessor effectively retains
substantially all such risks and benefits.
Where an asset is acquired by means of a finance lease, the asset is capitalised at either the fair value of
the lease property or, if lower, the present value of minimum lease payments at the inception of the contract
and a liability is recognised at the same time and for the same amount.
The discount rate used is the interest rate implicit in the lease. Leased assets are amortised over the period
of the lease. Lease payments are allocated between the principal component and the interest expense.
The Department does not currently hold any finance leases.
Operating lease payments are expensed on a straight-line basis which is representative of the pattern of
benefits derived from the leased assets.
1.10 Borrowing costs
All borrowing costs are expensed as incurred.
1.11 Cash
Cash and cash equivalents includes cash on hand, cash held with outsiders, demand deposits in bank
accounts with an original maturity of 3 months or less that are readily convertible to known amounts of cash
and subject to insignificant risk of changes in value. Cash is recognised at its nominal amount.
1.12 Financial assets
The Department classifies its financial assets in the following categories:
financial assets at fair value through profit or loss; and
loans and receivables.
The classification depends on the nature and purpose of the financial assets and is determined at the time
of initial recognition.
Financial assets are recognised and derecognised upon trade date.
The Department has no ‘held-to-maturity investment’ and holds no financial assets for sale.
Financial assets at fair value through profit or loss

Financial assets are classified as financial assets at fair value through profit or loss where the financial
assets:
have been acquired principally for the purpose of selling in the near future;
are a part of an identified portfolio of financial instruments that the Department manages together
and has a recent actual pattern of short-term profit-taking; or
are derivatives that are not designated and effective as a hedging instrument.
Assets in this category are classified as current assets.

Financial assets at fair value through profit or loss are stated at fair value, with any resultant gain or loss
5 recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any interest earned
on the financial asset.
Loans and receivables
Trade receivables, loans and other receivables that have fixed or determinable payments that are not
quoted in an active market are classified as ‘loans and receivables’. They are included in current assets,
except for maturities greater than 12 months after the balance sheet date. These are classified as
non-current assets. Loans and receivables are measured at amortised cost using the effective interest
method less impairment. Interest is recognised by applying the effective interest rate.
Impairment of financial assets
Financial assets are assessed for impairment at the end of each reporting periods.
Financial assets held at amortised cost
If there is objective evidence that an impairment loss has been incurred for loans and receivables or held to
maturity investments held at amortised cost, the amount of the loss is measured as the difference between
the asset’s carrying amount and the present value of estimated future cash flows discounted at the asset’s
original effective interest rate. The carrying amount is reduced by way of an allowance account. The loss is
recognised in the statement of comprehensive income.
1.13 Financial liabilities
Financial liabilities are classified as either financial liabilities ‘at fair value through profit or loss’ or other
financial liabilities.
Financial liabilities are recognised and derecognised upon ‘trade date’.
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss are initially measured at fair value. Subsequent fair
value adjustments are recognised in profit or loss. The net gain or loss recognised in profit or loss
incorporates any interest paid on the financial liability.
Other financial liabilities
Supplier and other payables are recognised at amortised cost where this is materially different from
historical cost. Liabilities are recognised to the extent that the goods or services have been received (and
irrespective of having been invoiced).
1.14 Contingent liabilities and contingent assets
Contingent liabilities and contingent assets are not recognised in the balance sheet but are reported in the
relevant schedules and notes. They may arise from uncertainty as to the existence of a liability or asset or
represent an asset or liability in respect of which the amount cannot be reliably measured. Contingent
assets are disclosed when settlement is probable but not virtually certain and contingent liabilities are
disclosed when settlement is greater than remote.
1.15 Acquisition of assets
Assets are recorded at cost on acquisition except as stated below. The cost of acquisition includes the fair
value of assets transferred in exchange and liabilities undertaken. Financial assets are initially measured at
their fair value plus transaction costs where appropriate.
Assets acquired at no cost, or for nominal consideration, are initially recognised as assets and income at
their fair value at the date of acquisition, unless acquired as a consequence of restructuring of
administrative arrangements. In the latter case, assets are initially recognised as contributions by owners at
the amounts at which they were recognised in the transferor Department’s accounts immediately prior to the
restructuring.
1.16 Property, plant and equipment
Asset recognition threshold
Purchases of property, plant and equipment are recognised initially at cost in the balance sheet, except for
purchases costing less than the following asset thresholds, which are expensed in the year of acquisition
(other than where they form part of a group of similar items which are significant in total).
Leasehold Improvements $50,000

Plant and Equipment $5,000
The initial cost of an asset includes an estimate of the cost of dismantling and removing the item and
5
restoring the site on which it is located. This is particularly relevant to ‘make good’ provisions taken up by
the Department where there exists an obligation to restore the property to its original condition. These costs
are included in the value of the Department’s leasehold improvement with a corresponding provision for the
‘make good’ take up.
Revaluations
Fair values for each class of asset are determined as shown below:
Asset class Fair value measured at:
Buildings Market selling price
Leasehold improvements Depreciated replacement cost
Plant and equipment Market selling price
Following initial recognition at cost, property plant and equipment are carried at fair value less subsequent
accumulated depreciation and accumulated impairment losses. Valuations are conducted with sufficient
frequency to ensure that the carrying amounts of assets do not differ materially from the assets’ fair values
as at the reporting date. The regularity of independent valuations depends upon the volatility of movements
in market values for the relevant assets.
Revaluation adjustments are made on a class basis. Any revaluation increment is credited to equity under
the heading of asset revaluation reserve except to the extent that it reverses a previous revaluation
decrement of the same asset class that was previously recognised through the operating result. Revaluation
decrements for a class of assets are recognised directly through the operating result except to the extent
that they reverse a previous revaluation increment for that class.
Any accumulated depreciation as at the revaluation date is eliminated against the gross carrying amount of
the asset and the asset restated to the revalued amount.
Depreciation
Depreciable property, plant and equipment assets are written-off to their estimated residual values over their
estimated useful lives to the Department using, in all cases, the straight-line method of depreciation.
Leasehold improvements are depreciated on a straight-line basis over the lesser of the estimated useful life
of the improvements or unexpired period of the lease.
Depreciation rates (useful lives), residual values and methods are reviewed at each reporting date and
necessary adjustments are recognised in the current, or current and future reporting periods, as
appropriate.
Depreciation rates applying to each class of depreciable asset are based on the following useful lives:
2010 2009
Buildings on freehold land 3 to 50 years 3 to 50 years
Leasehold improvements Lease term Lease term
Plant and equipment 2 to 50 years 2 to 50 years
Impairment
All assets were assessed for impairment at 30 June 2010. Where indications of impairment exist, the
asset’s recoverable amount is estimated and an impairment adjustment made if the asset’s recoverable
amount is less than its carrying amount.
The recoverable amount of an asset is the higher of its fair value less costs to sell and its value in use.
Value in use is the present value of the future cash flows expected to be derived from the asset. Where the
future economic benefit of an asset is not primarily dependent on the asset’s ability to generate future cash
flows, and the asset would be replaced if the Department were deprived of the asset, its value in use is
taken to be its depreciated replacement cost.
1.17 Intangibles
The Department’s intangible assets comprise the acquisition of software configured for internal use and
internally developed software. These assets are carried at cost less accumulated amortisation and
accumulated impairment losses.

Software is amortised on a straight-line basis over its anticipated useful life. The useful lives of the
5 Department’s software are 3 to 10 years (2008–09: 3 to 10 years).
All software assets were assessed for indications of impairment as at 30 June 2010.
1.18 Taxation / competitive neutrality
The Department is exempt from all forms of taxation except Fringe Benefits Tax (FBT) and the Goods and
Services Tax (GST).
Revenues, expenses and assets are recognised net of GST except:
where the amount of GST incurred is not recoverable from the Australian Taxation Office; and
for receivables and payables.
1.19 Reporting of administered activities
Administered revenues, expenses, assets, liabilities and cash flows are disclosed in the Schedule of
Administered Items and related Notes.
Except where otherwise stated below, administered items are accounted for on the same basis and using
the same policies as for Departmental items, including the application of Australian Accounting Standards.
Administered cash transfers to and from the Official Public Account
Revenue collected by the Department for use by the Australian Government rather than the Department is
administered revenue. Collections are transferred to the Official Public Account (OPA) maintained by the
Department of Finance and Deregulation. Conversely, cash is drawn from the OPA to make payments
under Parliamentary appropriation on behalf of the Australian Government. These transfers to and from the
OPA are adjustments to the administered cash held by the Department on behalf of the Government and
reported as such in the Statement of Cash Flows in the Schedule of Administered Items and in the
Administered Reconciliation Table in Note 18. The Schedule of Administered Items largely reflects the
Australian Government’s transactions, through the Department, with entities outside the Australian
Government.
Administered expenses
All administered expenses are expenses relating to the course of ordinary activities performed by the
Department on behalf of the Australian Government. As a result of the machinery of government change
announced 8 March 2010 the Department has experienced a large increase in the administered expenses.
(Refer Note 15).
Administered receivables
Where receivables are not subject to concessional treatment, they are carried at amortised cost using the
effective interest method. Gains and losses due to impairment, derecognition and amortisation are
recognised through surplus and deficit.
Administered investments
Administered investments in subsidiaries, joint ventures and associates are not consolidated because their
consolidation is relevant only at the Whole of Government level.
Administered investments other than those held for sale are measured at their fair value as at
30 June 2010. Fair value has been taken to be the net assets of the entities as at balance date according to
the unaudited financial statements. The audited financial statements of each controlled entity will be
available from their annual report or website.
Administered investments were assessed for impairment at 30 June 2010. No indications of impairment
were noted.
Grants and subsidies
The Department administers a number of grant and subsidy schemes on behalf of the Government.
Grant and subsidy liabilities are recognised to the extent that (i) the services required to be performed by
the grantee have been performed or (ii) the grant eligibility criteria have been satisfied, but payments due
have not been made. A commitment is recorded when the Government enters into an agreement to make
these grants but services have not been performed or criteria satisfied.
As a consequence of the machinery of government changes effective 8 March 2010 there has been an
increase in the Department’s grant liability. (Refer Note 17.)

Administered liabilities—Home Insulation Program
On 19 February 2010, the Government announced the closure of the Home Insulation Program (HIP). The
5
Government subsequently announced two separate elements within HIP to address safety issues being the
Home Insulation Safety Program (HISP) and the Foil Insulation Safety Program (FISP).
As a result of the Government decision the Department has determined that it will recognise a provision in
the financial statements for the components of HISP and FISP that can be measured reliably (Note 15
and 17 refers.) There are components of the rectification work that the Department is unable to quantify and
these have been disclosed as contingent liabilities. (Refer Note 19).
Under HISP, the Government announced that it will undertake safety inspections of a minimum of 150,000
homes that had non-foil insulation installed. Inspections will be targeted at those homes that are most likely
to have safety issues. Additionally if a household has safety concerns with installations under HIP they can
request an inspection. The Government is committed to inspecting as many homes as are necessary
according to an ongoing risk assessment process.
In Note 15 and 17 for HISP, DCCEE has included the direct costs to attend, inspect and remedy any minor
safety issues for up to 150,000 homes. These amounts can be reliably measured and are supported by
appropriate documentation, i.e. contracts etc. Note 19 contains those HISP items that DCCEE is unable to
reliably measure. These include all costs required to remedy any safety issues for any household that has
safety concerns that has requested a Government inspection, costs beyond 150,000 homes that may
require an inspection and subsequent safety works based on an ongoing risk assessment process, all travel
related costs for inspections, management and administrative costs associated with the HISP program,
including industry liaison communication, media and audit costs and the direct costs to attend and remedy
major and/or complex safety issues for any home that has had an installation under the HIP.
Under FISP the 50,000 homes that had foil insulation installed under HIP have the option of having the foil
insulation removed, or alternatively on the advice of a licensed electrician, having safety switches installed.
It is expected that the FISP program will be completed in the first half of 2011. Interim inspections have
commenced and householders who have had foil insulation installed under HIP can get their homes
checked by a licensed electrician which will be paid for by the Government. Furthermore DCCEE has
contacted all householders who have had foil insulation.
In Note 15 and 17 for FISP, DCCEE has included direct costs to attend, inspect and remedy any minor
safety issues for any home that agrees to an inspection and interim inspection costs. Note 19 contains
those FISP items that DCCEE is unable to reliably measure. These include all management and
administrative costs associated with the FISP program, including industry liaison costs, communication,
media and audit costs, direct costs to attend and remedy major and/or complex safety issues for any home
that has had an installation under the HIP and technical quality assurance costs for rectification works.
NOTE 2: EVENTS AFTER THE REPORTING PERIOD

There are no known events occurring after balance date that could impact on the financial statements.

Note 3: Expenses
5
2010 2009
Note 3A: Employee benefits $'000 $'000
Wages and salaries 49,870 28,127
Superannuation:
Defined contribution plans 5,628 2,651
Defined benefit plans 3,332 1,576
Leave and other entitlements 7,089 6,639
Other employee expenses 1,488 1,630
Total employee benefits 67,407 40,623
Note 3B: Suppliers

Goods and services
Contractors and consultants 29,062 14,926
Third party service providers 13,469 7,769
Travel 6,305 4,673
Legal expenses 3,085 2,086
Property Services 2,728 1,909
Recruitment and training 2,318 2,136
Office equipment 1,951 -
Contribution to climate change initiatives 1,479 25
Printing publications 363 1,792
Other goods and services 1,659 3,131
Total goods and services 62,419 38,447
Goods and services are made up of:

Provision of goods – related entities 775 1,443
Provision of goods – external parties 12,356 9,592
Rendering of services – related entities 13,071 13,602
Rendering of services – external parties 36,217 13,810
Other supplier expenses

Operating lease rentals – related entities:
Minimum lease payments 4,982 3,458
Workers compensation expenses 266 264
Total other supplier expenses 5,248 3,722
Total supplier expenses 67,667 42,169

Note 3: Expenses (continued)
5
2010 2009
Note 3C: Grants $'000 $'000
Public sector:
Australian Government entities (related entities) - 1,336
Local governments - 101
Private sector:
Non-profit organisations 14 524
Other - 30
Other 926 -
Total grants 940 1,991
Note 3D: Depreciation and amortisation

Depreciation:
Leasehold Improvements 1,256 216
Infrastructure, plant and equipment 946 129
Total depreciation 2,202 345
Amortisation:
Computer software 1,535 1,390
Total amortisation 1,535 1,390
Total depreciation and amortisation 3,737 1,735
Note 3E: Write-down and impairment of assets

Asset write-downs and impairments from:
Impairment of leasehold improvements 219 146
Impairment of property, plant and equipment 154 -
Impairment of software 1,131 -
Write-down of property, plant and equipment 263 -
Write-down of intangibles - 426
Total write-down and impairment of assets 1,767 572
Note 3F: Finance costs

Unwinding of discount 47 -
Total finance costs 47 -

Note 4: Income
5
2010 2009
REVENUE $'000 $'000
Note 4A: Sale of goods and rendering of services

Provision of goods – related entities - 694
Provision of goods – external parties 8,406 1,462
Rendering of services – related entities 975 216
Rendering of services – external parties 255 1
Total sale of goods and rendering of services 9,636 2,373
GAINS
Note 4B: Other gains
Resources received free of charge 175 131
Assets recognised for first time 934 -
Assets received free of charge 1,916 -
Total other gains 3,025 131
Assets received free of charge is the recognition of the lease for 2 Constitution Avenue that was
received for no consideration from the Attorney-General's Department who were the previous tenants
of the building.
REVENUE FROM GOVERNMENT

Note 4C: Revenue from Government
Appropriations:
Departmental outputs 121,958 79,459
Total revenue from Government 121,958 79,459

Note 5: Financial assets
2010 2009 5
$'000 $'000
Note 5A: Cash and cash equivalents
Cash on hand or on deposit 791 731
Total cash and cash equivalents 791 731
Note 5B: Trade and other receivables
Good and Services:
Goods and services – related entities 1,711 463
Goods and services – external parties 80 9
Total receivables for goods and services 1,791 472
Appropriations receivable:
For existing outputs 76,638 27,571
Total appropriations receivable 76,638 27,571
Other receivables:
GST receivable from the Australian Taxation Office 1,745 1,575
Other 761 761
Total other receivables 2,506 2,336
Total trade and other receivables (gross) 80,935 30,379
Less impairment allowance account:
Goods and services - -
Other - -
Total impairment allowance account - -
Total trade and other receivables (net) 80,935 30,379
Receivables are expected to be recovered in:
No more than 12 months 80,935 30,379
More than 12 months - -
Total trade and other receivables (net) 80,935 30,379
Receivables are aged as follows:
Not overdue 80,607 29,907
Overdue by:
0 to 30 days - 304
31 to 60 days 2 -
61 to 90 days - 5
More than 90 days 326 163
Total receivables (gross) 80,935 30,379
Note 5C: Other financial assets

Accrued revenue 89 186
Total other financial assets 89 186
No more than 12 months 89 186
Total other financial assets (net) 89 186

Note 6: Non-financial assets
5 2010 2009
Note 6A: Land and buildings $'000 $'000
Leasehold improvements:
Fair value 5,204 1,980
Accumulated depreciation (319) (246)
Accumulated impairment losses - (146)
Total leasehold improvements 4,885 1,588
Total land and buildings 4,885 1,588
Note 6B: Property, plant and equipment

Infrastructure, plant and equipment:
Fair value 7,356 3,397
Accumulated depreciation (101) (129)
Work in progress - -
Total other property, plant and equipment 7,255 3,268
Total property, plant and equipment 7,255 3,268
All revaluations were conducted in accordance with the revaluation policy stated at Note 1. On 22 June
2010, PRP National Property Consultants, an independent valuer, conducted the revaluations.
Revaluation for leasehold improvements 2010: increment $276,706 was credited to the asset
revaluation reserve by its asset class and included in the equity section of the balance sheet.
As a result of a stocktake and revaluation there were indicators of impairment and these have been
reported.
No property, plant or equipment is expected to be sold or disposed of within the next 12 months.

Note 6: Non-financial assets (continued)
Note 6C: Reconciliation of the opening and closing balances of property, plant and equipment (2009–10)
Buildings Total land Property, plant Total property, Total

and buildings & equipment plant &
equipment
$’000 $’000 $’000 $’000 $’000

As at 1 July 2009
Gross book value 1,980 1,980 3,397 3,397 5,377
Accumulated depreciation and impairment (392) (392) (129) (129) (521)
Net book value 1 July 2009 1,588 1,588 3,268 3,268 4,856
Additions:
By purchase 2,591 2,591 4,386 4,386 6,977
Assets received free of charge 1,916 1,916 - - 1,916
From acquisition of entities or operations (including
restructuring) - - 24 24 24
Assets recognised first time - - 934 934 934
Revaluations recognised in other comprehensive income 277 277 (6) (6) 271
Impairments recognised in the operating result (219) (219) (154) (154) (373)
Depreciation expense (1,256) (1,256) (946) (946) (2,202)
Disposals:
Other (12) (12) (251) (251) (263)
Net book value 30 June 2010 4,885 4,885 7,255 7,255 12,140
Net book value as of 30 June 2010 represented by:
Gross book value 5,204 5,204 7,356 7,356 12,560
Accumulated depreciation (319) (319) (101) (101) (420)
4,885 4,885 7,255 7,255 12,140
5
177
5
Note 6C (continued): Reconciliation of the opening and closing balances of property, plant and equipment (2008–09)
Buildings Total land Property, Total Total
and buildings plant & property, plant &
equipment equipment
$’000 $’000 $’000 $’000 $’000
As at 1 July 2008
Gross book value 835 835 47 47 882
Accumulated depreciation and impairment (30) (30) - - (30)
Net book value 1 July 2008 805 805 47 47 852
Additions:
By purchase 1,145 1,145 3,350 3,350 4,495
Impairments recognised in the operating result (146) (146) - - (146)
Depreciation expense (216) (216) (129) (129) (345)
Net book value 30 June 2009 1,588 1,588 3,268 3,268 4,856
Gross book value 1,980 1,980 3,397 3,397 5,377
Accumulated depreciation (246) (246) (129) (129) (375)
Accumulated impairment losses (146) (146) - - (146)
1,588 1,588 3,268 3,268 4,856

2010 2009
5
Note 6D: Intangibles $'000 $'000
Computer software:
Internally developed – in progress 659 2,781
Internally developed – in use 11,762 7,032
Purchased 1,617 1,375
Total computer software (gross) 14,038 11,188
Accumulated amortisation (3,077) (1,766)
Accumulated impairment losses (916) (426)
Total computer software (net) 10,045 8,996
Total intangibles 10,045 8,996
No intangibles are expected to be sold or disposed of within the next 12 months.

5
Note 6D (continued): Reconciliation of the opening and closing balances of intangibles (2009–10)
Computer Computer Total

software software
internally purchased
developed
$’000 $’000 $’000

As at 1 July 2009
Gross book value 9,813 1,375 11,188
Accumulated amortisation and impairment (2,115) (77) (2,192)
Net book value 1 July 2009 7,698 1,298 8,996
Additions:
By purchase - 242 242
Internally developed 3,473 - 3,473
Impairments recognised in the operating result (704) (427) (1,131)
Amortisation (1,272) (263) (1,535)
Net book value 30 June 2010 9,195 850 10,045
Gross book value 12,421 1,617 14,038
Accumulated amortisation (2,737) (340) (3,077)
Accumulated impairment (489) (427) (916)
9,195 850 10,045

Note 6D (continued): Reconciliation of the opening and closing balances of intangibles (2008–09)
Computer Computer Total

software internally software
developed purchased
$’000 $’000 $’000

As at 1 July 2008
Gross book value 6,190 278 6,468
Accumulated amortisation and impairment (376) - (376)
Net book value 1 July 2008 5,814 278 6,092
Additions:
By purchase 3,623 1,097 4,720
Amortisation (1,313) (77) (1,390)
Disposals:
Other (426) - (426)
Net book value 30 June 2009 7,698 1,298 8,996

Gross book value 9,813 1,375 11,188
Accumulated amortisation and impairment (2,115) (77) (2,192)
7,698 1,298 8,996
5
181
5 2010 2009
$'000 $'000
Note 6E: Other non-financial assets
Prepayments 600 578
Total other non-financial assets 600 578
Total other non-financial assets – are expected

to be recovered in:

Total other non-financial assets 600 578

Note 7: Payables
2010 2009 5
$'000 $'000
Note 7A: Suppliers
Trade creditors and accruals 15,590 10,385
Total supplier payables 15,590 10,385
Supplier payables expected to be settled within 12 months:

Related entities 5,066 6,112
External parties 10,524 4,273
Total supplier payables 15,590 10,385
Settlement is usually made within 30 days.
Note 7B: Grants

Grants:
Public sector:
Australian Government entities (related entities) 40 1,980
Private sector:
Other 64 -
Total grants are expected to be settled in:

No more than 12 months 104 1,980
Settlement is usually made according to the terms and conditions of each grant. This is usually within
30 days of performance or eligibility.
Note 7C: Other payables

Salaries and wages 1,596 1,293
Superannuation 243 86
Other 148 24
Unearned income 1,337 7,262
Total other payables 3,324 8,665
Total other payables are expected to be settled in:

Total other payables 3,324 8,665

Note 8: Provisions
5 2010 2009
$'000 $'000
Note 8A: Employee provisions
Leave 22,107 11,559
Total employee provisions 22,107 11,559
Employee provisions are expected

to be settled in:
More than 12 months 16,414 9,358
Total employee provisions 22,107 11,559
Note 8B: Other provisions

Provision for future lease payments 183 37
Provision for make good 2,658 132
Total other provisions 2,841 169
Other provisions are expected to be settled in:

More than 12 months 2,814 -
Total other provisions 2,841 169
Provision
for future Provision
lease for make
payments good Total
$’000 $’000 $’000
Carrying amount 1 July 2009 37 132 169
Additional provisions made 183 2,611 2,794
Amounts used - - -
Amounts reversed (37) (132) (169)
Unwinding of discount or change
in discount rate - 47 47
Closing balance 2010 183 2,658 2,841
The Department currently has nine agreements (2009: one agreement) for the leasing of premises
which have provisions requiring the Department to restore the premises to their original condition at the
conclusion of the lease. The Department has made a provision to reflect the present value of this
obligation.

Note 9: Restructuring
5
Note 9A : Departmental restructuring
2009–10:
As a result of a restructuring of administrative arrangements, the Department assumed responsibility
for the former Renewables and Energy Efficiency Division and Energy Efficiency Taskforce from the
Department of Environment, Water, Heritage and the Arts. The restructuring was effective from 8
March 2010.
A Memorandum of Understanding (MOU) was developed between the two agencies to outline the
transfer of assets and liabilities. In accordance with the MOU departmental employee liabilities were
recognised from 18 March 2010. The remaining assets and liabilities were recognised from 31 May
2010.
The net book values of assets and liabilities transferred were:
2010
Net assets recognised: '000
Appropriation receivable 5,045
Other receivables 330
Property, plant and equipment 24
Total assets recognised 5,399
Liabilities recognised:
Employee provisions 6,258
Total liabilities recognised 6,258
Net (liabilities) assumed (859)
2008–09:
There was no restructuring in 2008–09.

Note 9: Restructuring (continued)
5
Note 9B: Administered restructuring
2009–10:
As a result of a restructuring of administrative arrangements, the Department assumed responsibility
for the former Renewables and Energy Efficiency Division and Energy Efficiency Taskforce from the
Department of Environment, Water, Heritage and the Arts. The restructuring was effective from 8
March 2010.
A Memorandum of Understanding (MOU) was developed between the two agencies to outline the
transfer of Administered assets and liabilities. In accordance with the MOU DCCEE recognised assets
and liabilities from 30 April 2010.
The net book values of assets and liabilities transferred were:
2010
Net assets recognised: '000
Trade receivables 58
Accrued revenue 368
Total assets recognised 426
Liabilities recognised:
Supplier payables 21,206
Accrued expenses 142,419
Total liabilities recognised 163,625
Net (liabilities) assumed (163,199)
2008–09:
There was no restructuring in 2008-09.

Note 10: Cash flow reconciliation
2010 2009 5
$'000 $'000
Reconciliation of cash and cash equivalents as per balance sheet

to cash flow statement:
Cash and cash equivalents as per:

Cash flow statement 791 731
Balance sheet 791 731
Difference - -
Reconciliation of net cost of services to net cash from operating activities:
Operating Result (6,946) (5,127)

Adjustments for non-cash items
Depreciation / amortisation 3,737 1,735
Net write down of non-financial assets 1,767 572
Resources received free of charge – goods (2,850) -
(Increase) / decrease in net receivables (5,237) 1,581
(Increase) / decrease in prepayments (22) (362)
(Increase) / decrease in other assets 96 -
Increase / (decrease) in supplier payables 5,210 1,528
Increase / (decrease) in employee provisions 10,548 6,732
Increase / (decrease) in grant payables (1,876) 1,379
Increase / (decrease) in other payables 583 20
Increase / (decrease) in unearned income (5,924) (1,273)
Net cash from (used by) operating activities (914) 6,785

Note 11: Contingent liabilities and assets
5
Quantifiable contingencies
The Department is not aware of any quantifiable contingent liabilities or assets at the signing date,
that would require disclosure in the financial statements.
Unquantifiable contingencies
The Department is not aware of any unquantifiable contingent liabilities or assets at the signing
date, that would require disclosure in the financial statements.
Significant remote contingencies

The Department is not aware of any significant remote contingent liabilities or assets, as at the
signing date, that would require disclosure in the financial statements.

Note 12: Senior Executive remuneration
5
Note 12A: Actual remuneration paid to Senior Executives
Executive remuneration
2010 2009
The number of senior executives who received:
less than $145,000* 2 1
$145,000 to $159,999 3 1
$160,000 to $174,999 4 6
$175,000 to $189,999 4 5
$190,000 to $204,999 1 5
$205,000 to $219,999 5 2
$220,000 to $234,999 2 1
$235,000 to $249,999 6 -
$250,000 to $264,999 3 -
$265,000 to $279,999 - 1
$280,000 to $294,999 1 2
$295,000 to $309,999 1 1
$310,000 to $324,999 1 -
$340,000 to $354,999 1 -
$355,000 to $369,999 1 1
$415,000 to $429,999 1 -
$520,000 to $534,9991 1 -
$565,000 to $579,9991 - 1
Total 37 27
* Excluding acting arrangements and part-year service.
1. The determination of remuneration for secretaries is made by the Prime Minister on advice of the
Remuneration Tribunal. The remuneration amount in this table includes salary, superannuation,
allowances, fringe benefits tax, vehicle and parking costs, and accrued leave entitlements.
Total expense recognised in relation to Senior Executive employment

$ $
Short-term employee benefits:
Salary (including annual leave taken) 5,931,279 4,282,191
Changes in annual leave provisions 126,464 118,124
Performance bonus 180,883 182,237
Other1 1,063,897 438,216
Total short-term employee benefits 7,302,523 5,020,768
Superannuation (post-employment benefits) 989,048 761,887
Other long-term benefits 274,288 135,328
Total 8,565,859 5,917,983
During the year the Department paid no termination benefits to senior executives (2008-09: Nil)
Notes
1. 'Other' includes motor vehicle allowances, fringe benefits and other allowances.

5
Note 12: Senior Executive remuneration (continued)
Note 12B: Salary packages for senior executives

Average annualised remuneration packages for substantive Senior Executives
As at 30 June 2010 As at 30 June 2009
Base salary Total Base salary Total

(including remuneration (including remuneration
No. SES annual leave) package1 No. SES annual leave) package1
Total remuneration:
$160,000 to $174,999 1 140,480 162,114 - - -
$175,000 to $189,999 1 157,192 182,028 - - -
$190,000 to $204,999 10 173,759 199,215 5 169,460 194,395
$205,000 to $219,999 9 183,317 213,576 7 184,686 212,384
$220,000 to $234,999 8 195,625 229,928 2 193,450 224,191
$235,000 to $249,999 3 215,700 246,032 4 208,650 237,990
$250,000 to $264,999 4 213,947 259,130 - - -
$265,000 to $279,999 2 222,170 272,137 2 233,400 275,776
$280,000 to $294,999 3 249,133 288,644 1 250,000 289,500
$310,000 to $324,999 1 260,000 313,040 - - -
$325,000 to $339,999 - - - 1 287,700 328,156
$340,000 to $354,999 1 300,700 342,984 1 298,900 353,168
$355,000 to $369,999 2 312,400 369,119 - - -
$475,000 to $489,999 - - - 1 365,670 475,364
$490,000 to $504,999 1 376,640 490,483 - - -
Total 46 24

Notes
1. Non-salary elements available to Senior Executives include:
(a) motor vehicle allowance, where relevant, noting that the Department's policy is to compulsory cash out the allowance and include it in
base salary.
(b) superannuation
2. Table 12B above includes substantive SES Officers employed at 30 June.
Note 13: Remuneration of auditors
2010 2009
5
$ $
Financial statement audit services were provided free of charge to the
agency.
The fair value of the services provided was: 175,000 131,000

175,000 131,000
No other services were provided by the Auditor-General.

Note 14: Financial instruments
5
Note 14A: Categories of financial instruments Notes 2010 2009
$'000 $'000
Loans and receivables:
Cash and cash equivalents 5A 791 731
Trade receivables 5B 4,297 2,808
Accrued revenue 5C 89 186
Carrying amount of financial assets 5,177 3,725
Financial liabilities
Other liabilities:
Payables – suppliers 7A 15,590 10,385
Payables – grants 7B 104 1,980
Payables – other 7C 1,987 1,403
Unearned Income 7C 1,337 7,262
Carrying amount of financial liabilities 19,018 21,030

Note 14: Financial instruments (continued)
Note 14B: Fair value of financial instruments
Notes Carrying Fair Carrying Fair

amount value amount value
2010 2010 2009 2009
$'000 $'000 $'000 $'000
Financial assets
Cash and cash equivalents 5A 791 791 731 731
Trade receivables 5B 4,297 4,297 2,808 2,808
Accrued revenue 5C 89 89 186 186
Total 5,177 5,177 3,725 3,725
Payables – suppliers 7A 15,590 15,590 10,385 10,385
Payables – grants 7B 104 104 1,980 1,980
Payables – other 7C 1,987 1,987 1,403 1,403
Unearned Income 7C 1,337 1,337 7,262 7,262
Total 19,018 19,018 21,030 21,030
5
193
5
Note 14C: Credit risk
The Department of Climate Change and Energy Efficiency is exposed to minimal credit risk as loans and receivables are cash and trade receivables. The
maximum exposure to credit risk is the risk that arises from potential default as a debtor. This amount is equal to the total amount of trade receivables of
$2,552,000 (2009: $1,223,000). The Department has assessed the risk of the default on payment and has decided not to allocate an impairment allowance
account.
The Department manages its credit risk by ensuring that the Department has policies and procedures in relation to debt management.
The Department has no collateral to mitigate against credit risk.
Credit quality of financial instruments not past due or individually determined as impaired.
Notes Not past due or Past due or Not past due or Past due or
impaired impaired impaired impaired
2010 2010 2009 2009
$'000 $'000 $'000 $'000
Cash and cash equivalents 5A 791 - 731 -
Trade receivables 5B 4,297 - 658 -
Accrued revenue 5C 89 - 186
Total 5,177 - 1,575 -
Ageing of financial assets that were past due but not impaired for 2010
Notes 0 to 30 31 to 60 61 to 90 90+
days days days days Total
$'000 $'000 $'000 $'000 $'000
Cash and cash equivalents 5A - - - - -
Trade receivables 5B - 2 - 326 328
Other receivables 5B - - - - -

Total - 2 - 326 328
Notes 0 to 30 31 to 60 61 to 90 90+
$'000 $'000 $'000 $'000 $'000
Cash and cash equivalents 5A - - - - -
Trade receivables 5B 304 - 5 163 472
Other receivables 5B - - - - -
Total 304 - 5 163 472
Note 14D: Liquidity risk
The Department of Climate Change and Energy Efficiency financial liabilities are supplier and grants payables and unearned income . The exposure to liquidity
risk was based on the notion that the Department will encounter difficulties in meeting its obligations associated with financial liabilities. This was highly unlikely
due to appropriation funding and mechanisms available to the Department (e.g. advances from the Finance Minister) and internal policies and procedures put in
place to ensure there are appropriate resources to meet financial obligations.
The following table illustrates the maturities for financial instruments.

Notes On Within 1 1 to 5 >5
demand year years years Total
$'000 $'000 $'000 $'000 $'000
Suppliers payable 7A - 15,590 - - 15,590
Grants payable 7B - 104 - - 104
Other payable 7C - 1,987 - - 1,987
Unearned income 7C - 1,337 - - 1,337
Total - 19,018 - - 19,018
Maturities for non-derivative financial liabilities 2009

Notes On Within 1 1 to 5 >5
demand year years years Total
$'000 $'000 $'000 $'000 $'000
Grants payable 7B - 1,980 - - 1,980
Other payable 7C - 1,403 - - 1,403
Unearned income 7C - 7,262 - - 7,262
Total - 21,030 - - 21,030
Note 14E: Market risk

The Department of Climate Change and Energy Efficiency holds basic financial instruments that do not expose it to certain market risks. The department is not
exposed to 'currency risk' or 'other price risk.'
Interest rate risk
The Department of Climate Change and Energy Efficiency is not exposed to any interest rate risk.
5
195
Note 15: Expenses administered on behalf of Government
5 2010 2009
$'000 $'000
EXPENSES
Note 15A: Suppliers
Goods and services
Professional services 30,567 -
Contractors 11,495 370
Outsourced providers 8,077 -
Consultants 5,364 3,544
Contributions 4,719 4,384
Advertising 250 6,424
Other goods and services 4,476 1,821
Total goods and services 1 64,948 16,543
Goods and services are made up of:

Provision of goods – related entities 4,424 -
Provision of goods – external parties 553 15
Rendering of services – related entities 29,617 4,336
Rendering of services – external parties 30,354 12,192
Total suppliers expenses 1 64,948 16,543
1. Refer Note 1.19
Note 15B: Subsidies

Payable to external parties:
Payments under the Green Loans Program 6,255 -
Total personal benefits 2 6,255 -
2. Refer Note 1.19

Note 15: Expenses administered on behalf of Government (continued)
2010 2009
5
$'000 $'000
Note 15C: Grants

Public sector:
Australian Government entities (related entities) 15,464 2,543
State and territory governments - 208
Local governments 30 873
Private sector:
Profit organisations 19,199 -
Non-profit organisations 5,285 17,912
Other 217,772 -
Overseas 120 326
Individuals 16,670 -
Total grants 3 274,540 21,862
3. Refer Note 1.19
Note 15D: Other expenses

Home Insulation Program provision expenses 146,972 -
Total other expenses4 146,972 -
4. Refer Note 1.19

5
2010 2009
FINANCIAL ASSETS $'000 $'000
Note 16A: Cash and cash equivalents

Cash on hand or on deposit 159 -
Total cash and cash equivalents 159 -
Note 16B: Receivables

Other receivables:
GST receivable from Australian Taxation Office 6,303 -
Other 626 9
Total other receivables 6,929 9
Total receivables (gross) 6,929 9
Less: impairment allowance account:

Goods and services - -
Other - -
Total impairment allowance account - -
Total receivables (net) 6,929 9

No more than 12 months 6,929 9
Total trade and other receivables (net) 6,929 9
Receivables were aged as follows:

Not overdue 6,915 -
Overdue by:
0 to 30 days 14 9
31 to 60 days - -
61 to 90 days - -
More than 90 days - -
Total receivables (gross) 6,929 9
Other receivables are with entities external to the Australian

Government. Credit terms were within 30 days.

Note 16: Assets administered on behalf of Government (continued)
2010 2009
5
$'000 $'000
Note 16C: Investments accounted for using the equity method
Australian Government authorities
Australian Carbon Trust 1 198 -
Total equity accounted investments 198 -
Total investments accounted for using the equity method are

expected to be recovered in:
No more than 12 months 198 -
198 -
1. Note 20 refers.
NON-FINANCIAL ASSETS
Note 16D: Other non-financial assets
Prepayments 1,650 47
Total other non-financial assets 1,650 47
Total other non-financial assets are expected to be recovered in:

Total other non-financial assets 1,650 47

5 2010 2009
$'000 $'000
Note 17A: Suppliers
Trade creditors and accruals 35,043 1,073
Total suppliers 35,043 1,073
Supplier payables expected to be settled within 12 months:
Related entities 4,513 446
External parties 30,530 627
Total 35,043 1,073
Supplier payables expected to be settled in
greater than 12 months:
Related entities - -
External parties - -
Total - -
Total supplier 35,043 1,073
Settlement is usually made within 30 days.
Note 17B: Grants

Public sector:
Australian Government entities (related entities) 37,645 880
Private sector:
Profit organisations 79,467 -
Total grants 117,112 880
Total grants – are expected to be settled in:

Total grants 117,112 880
Settlement is usually made according to the terms and conditions of each grant. This is usually within
30 days of performance or eligibility.
Note 17C: Other provisions

Home Insulation Program1 146,972 -
Total grants 146,972 -
Other provisions are expected to be settled in:
No more than 12 months 146,972 -
Total other provisions 146,972 -
1. Refer Note 1.19.

2010 2009 5
$'000 $'000
Opening administered assets less administered liabilities as at 1

July (1,897) (5,303)
Adjustment for change in accounting policies - -
Adjustments for errors - -
Adjusted opening administered assets less administered (1,897) (5,303)
liabilities
Plus: Administered income - -
Less: Administered expenses (non CAC) (492,715) (38,404)
Administered transfers to/from Australian Government:
Appropriation transfers from OPA:
Annual appropriations for administered
expenses (non CAC) 370,713 41,604
Transfers to OPA (3,447) (35)
Transferrable to OPA 156 241
Investments:
Australian Carbon Trust 198 -
Restructuring:
Transfer from DEWHA (163,199) -
Closing administered assets less administered liabilities as at 30
June (290,191) (1,897)

Note 19: Administered contingent assets and liabilities
5
Quantifiable contingencies
The Department is not aware of any quantifiable administered contingent liabilities or assets as
at signing date that would require disclosure in the financial statements.
Unquantifiable contingencies
Kyoto Protocol – Emissions target: As a party to the Kyoto Protocol, Australia is required to
meet its emissions over the first Commitment Period, 2008-2012. According to the latest
projections of emissions over the Commitment Period, Australia is on track to more than meet its
2008-12 target. Estimates of the likely net balance and value of these permits will be determined
closer to the end of the entire Commitment Period.
Home Insulation Program Recoveries: On 19 February 2010, the Government announced the
closure of the Home Insulation Program (HIP) and the responsibility for all Energy Efficiency
functions was transferred to the Department of Climate Change and Energy Efficiency (DCCEE)
on 8 March 2010, (refer Note 9B). The extent of possible over-payments arising from the
Department’s administration of HIP is uncertain. At the time the program closed, over one million
homes had been insulated and the volume of transactions to be analysed is significant. The
process of evaluating program data for potential recovery action is a major exercise and the
Department has been developing a framework for managing suspected fraud. This framework is
based on a forensic audit currently being conducted with expert external assistance.
The audit is assessing data against risk factors and ranking the results for possible further
investigation. A framework for managing suspected non-compliance is also being developed and
the results of this work will enable specific cases to be targeted for recovery action. The options
open to DCCEE to recover these monies from non-compliance installers may involve legal action
and standard debt recovery methods.
At the signing of the Department’s financial statements adequate information is not available to
reliably estimate the potential recoveries for HIP non-compliance in the financial statements. The
Department is continuing to assess and investigate registered companies under HIP to identify
potential amounts that might be recovered.
Home Insulation Program Provision: There are components of the provision that the
Department is not able to measure reliably as insufficient information exists to enable it to be
quantified. As such these components have been excluded and disclosed as unquantifiable.
(Refer Note 1.19)

Note 19: Administered contingent assets and liabilities (continued)
5
Green Loans – Recoveries from Assessors: As part of the review of the Green Loans Program
the Department is in the process of developing and implementing an automated invoice checking
function to improve the checking of future claims. The Department will be undertaking a payment
reconciliation project to validate past payments made under the Green Loans Program, which is
expected to identify errors, most likely overpayments to assessors.
At the signing of the Department’s financial statements adequate information is not available to
reliably estimate the potential recoveries from Green Loans Assessors. The Department is
continuing to assess and investigate assessors under the Green Loans program to identify
potential amounts that might be recovered.
Significant remote contingencies

The Department is not aware of any significant remote contingencies as at signing date that
would require disclosure in the financial statements.
Note 20: Administered investments
Australian Carbon Trust: Australian Carbon Trust Limited provides finance and advice to
Australian businesses to catalyse investment in, take up and use of energy-efficient technologies
and practices for cost-effective carbon reductions.

5
Note 21: Administered financial instruments
2010 2009
Note 21A: Categories of financial instruments $'000 $'000
Financial assets Notes
Cash and cash equivalents
Administered bank accounts 16A 159 -
Loans and receivables
Receivables 16B 6,929 9
Available-for-sale
Investments 16C 198 -
Carrying amount of financial assets 7,286 9
Other liabilities
Suppliers payable 17A 35,043 1,073
Grants payable 17B 117,112 880
Carrying amount of financial liabilities 152,155 1,953
Note 21B: Fair value of financial instruments

Notes Carrying Fair Carrying Fair
amount value amount value
2010 2010 2009 2009
$'000 $'000 $'000 $'000
Financial assets
Cash and cash equivalents 16A 159 159 - -
Receivables 16B 6,929 6,929 9 9
Investments 16C 198 198 - -

Total 7,286 7,286 9 9
Suppliers payable 17A 35,043 35,043 1,073 1,073
Grants payable 17B 117,112 117,112 880 880
Total 152,155 152,155 1,953 1,953
Note 21: Administered financial instruments (continued)
Note 21C: Credit risk
The Department of Climate Change and Energy Efficiency is exposed to minimal credit risk as loans and receivables are cash and trade receivables. The maximum exposure to credit risk is the risk
that arises from potential default as a debtor. This amount is equal to the total amount of trade receivables of $626,000 (2009: $9,000). The Department has assessed the risk of the default on
payment and has decided not to allocate an impairment allowance account.
Credit quality of financial instruments not past due or individually determined as impaired
Notes Not past due nor Not past due nor Past due or Past due or
impaired impaired impaired impaired
2010 2009 2010 2009
$'000 $'000 $'000 $'000
Receivables 16B 612 - 14 9
Total 612 - 14 9
Notes 0 to 30 31 to 60 61 to 90 90+
$'000 $'000 $'000 $'000 $'000
Receivables 16B 14 - - - 14
Total 14 - - - 14
Notes 0 to 30 31 to 60 61 to 90 90+
$'000 $'000 $'000 $'000 $'000
Receivables 16B 9 - - - 9
Total 9 - - - 9
5
205
5
Note 21: Administered financial instruments (continued)
Note 21D: Liquidity risk
The Department of Climate Change and Energy Efficiency financial liabilities are supplier and grants payables and unearned income . The exposure to liquidity risk was based on the notion that the
Department will encounter difficulties in meeting its obligations associated with financial liabilities. This was highly unlikely due to appropriation funding and mechanisms available to the Department
(e.g. advances from the Finance Minister) and internal policies and procedures put in place to ensure there are appropriate resources to meet financial obligations.

Notes On Within 1 1 to 5 >5 Total
demand year years years $'000
$'000 $'000 $'000 $'000
Grants payable 17B - 117,112 - - 117,112
Total - 152,155 - - 152,155

Notes On within 1 1 to 5 >5 Total
demand year years years $'000
$'000 $'000 $'000 $'000
Grants payable 17B - 880 - - 880
Total - 1,953 - - 1,953
Note 21E: Market risk

The Department of Climate Change and Energy Efficiency holds basic financial instruments that do not expose it to certain market risks. The department is not exposed to 'currency risk' or 'other
price risk.'
Interest rate risk

The Department of Climate Change and Energy Efficiency is not exposed to any interest rate risk.

Note 22: Appropriations
Table A1: Acquittal of Authority to Draw Cash from the Consolidated Revenue Fund for Ordinary Annual Services Appropriations
Administered expenses Departmental outputs

Particulars Outcome 1 Outcome 1 Total
2010 2009 2010 2009 2010 2009
$'000 $'000 $'000 $'000 $'000 $'000
Balance brought forward from previous period (Appropriation Acts) 5,542 9,581 4,000 23,071 9,542 32,652
Appropriation Act:
Appropriation Act (No. 1, 3 & 5) 2009–2010 as passed 245,541 42,250 125,417 57,048 370,958 99,298
Appropriations reduced (Appropriation Act sections 10, 11 & 12) (3,861) (4,650) (10,074) - (13,935) (4,650)
FMA Act:
Repayments to the Commonwealth (FMA Act section 30) 542 (90) 700 - 1,242 (90)
*Appropriations to take account of recoverable GST (FMA Act section
30A) 1 4,291 4,008 4,722 4,537 9,013 8,545
Relevant agency receipts (FMA Act s 31) - - 4,703 2,275 4,703 2,275
Transfer of agency functions (FMA Act s 32) 971,284 - 12,336 3,940 983,620 3,940
Total appropriation available for payments 1,223,339 51,099 141,804 90,871 1,365,143 141,970
Cash payments made during the year (GST inclusive) 361,675 45,557 126,031 86,871 487,706 132,428
Balance of authority to draw cash from the Consolidated Revenue Fund for
ordinary annual services appropriations and as represented by: 861,664 5,542 15,773 4,000 877,437 9,542
Cash at bank and on hand 159 - 791 731 950 731

*Departmental appropriations receivable 13,260 20,176 13,260 20,176
*Undrawn, unlapsed administered appropriations 861,505 5,542 861,505 5,542
*Net GST receivable from ATO - - 1,722 1,565 1,722 1,565
*Adjustments under s 101.13 of the Finance Minister's Orders not reflected
above - - - (18,472) - (18,472)
Total as at 30 June 2010 861,664 5,542 15,773 4,000 877,437 9,542
1. The amounts in this line item are calculated on an accrual basis to the extent that an expense may have been incurred that includes GST but has not been
paid by year end.
5
207
5
Note 22: Appropriations (continued)
Table A2: Acquittal of Authority to Draw Cash from the Consolidated Revenue Fund for Ordinary Annual Services Appropriations (Reduction in
Administered Items)
Particulars Outcome 1 Total
2010 2009 2010 2009
Reduction in administered items

Total administered items appropriated 2009–2010 1,216,825,602.95 42,250,000.00 1,216,825,602.95 42,250,000.00
Less administered items required by the agency as per Appropriation
Act s11 1 :
Appropriation Act (No. 1) 2009–2010 427,627,203.76 29,701,932.00 427,627,203.76 29,701,932.00
Appropriation Act (No. 3) 2009–2010 - 8,686,623.00 - 8,686,623.00
Appropriation (Water Entitlements and Home Insulation) Act
2009–2010 79,869,608.51 - 79,869,608.51 -
Total administered items required by the agency as represented by:

Spent 355,392,331.73 36,707,555.06 355,392,331.73 36,707,555.06
Retention 152,104,480.54 1,680,999.94 152,104,480.54 1,680,999.94
Total reduction in administered items – effective 2010–11 709,328,790.68 3,861,445.00 709,328,790.68 3,861,445.00
1. Administered items for 2009–10 will be reduced to these amounts when these financial statements are tabled in the Parliament as part of the
Department's 2009–10 annual report. This reduction is effective in 2010–11 and the amounts in the Total Reduction row will be reflected in Table A1 in the

2010–11 financial statements in the row 'Appropriations reduced (Appropriation Act sections 10, 11 & 12)'.
Table B1: Acquittal of Authority to Draw Cash from the Consolidated Revenue Fund for Other than Ordinary Annual Services Appropriations
Departmental
Operating
Non-operating
Particulars SPPs Equity Previous year outputs Total Total
2010 2009 2010 2009 2010 2009 2010 2009
$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
Balance brought forward from previous period - - 7,395 9,495 - - 7,395 9,495
(A
Appropriation Acts
ppropriationAct : )
Appropriation Act (No. 2, 4&6) 2009-2010 as passed - - 54,475 1,000 18,472 - 72,947 1,000
Appropriations reduced (Appropriation Act sections 12, 13
& 14) - - - - - - - -
Advance to the Finance Minister (Appropriation Act
section 15) - - - - - - - -
FMA Act :
Repayments to the Commonwealth (FMA Act section 30) - - - - - - - -

*Appropriations to take account of recoverable GST (FMA
Act section 30A)1 - - 820 310 881 - 1,701 310
Transfer of agency functions (FMA Act s 32) 8,045 - 50 - - - 8,095 -
Total appropriations available for payments 8,045 - 62,740 10,805 19,353 - 90,138 10,805
Cash payments made during the year (GST inclusive) 5,433 - 9,019 3,410 9,696 - 24,148 3,410
Balance of authority to draw cash from the consolidated
revenue fund for other than ordinary annual services
appropriations and as represented by: 2,612 - 53,721 7,395 9,657 - 65,990 7,395
Cash at bank and on hand - - - - - - - -

*Departmental appropriations receivable 53,721 - 9,657 63,378 -
*Net GST receivable from ATO - - - - - - -
*Undrawn, unlapsed administered appropriations 2,612 - - 7,395 - - 2,612 7,395
Total as at 30 June 2010 2,612 - 53,721 7,395 9,657 - 65,990 7,395
1. The amounts in this line item are calculated on an accrual basis to the extent that an expense may have been incurred that includes GST but has not been
paid by year end.
5
209
5
Table B2: Acquittal of Authority to Draw Cash from the Consolidated Revenue Fund for Ordinary Annual Services Appropriations (Reduction in
Administered Items)
Particulars Outcome 1 Total
2010 2009 2010 2009
Reduction in administered items

Total administered items appropriated 2009–2010 8,045,000.00 - 8,045,000.00 -
Less administered items required by the agency as per Appropriation Act
s11 1 :
Appropriation Act (No. 2) 2009–2010 - - - -
Appropriation Act (No. 4) 2009–2010 5,482,030.87 - 5,482,030.87 -
Total administered items required by the agency as represented by: -
Spent 5,432,030.87 - 5,432,030.87 -
Retention 50,000.00 - 50,000.00 -
Total reduction in administered items – effective 2010–11 2,562,969.13 - 2,562,969.13 -
1. Administered items for 2009–10 will be reduced to these amounts when these financial statements are tabled in the Parliament as part of the
Department's 2009–10 annual report. This reduction is effective in 2010–11 and the amounts in the Total Reduction row will be reflected in Table B1 in the
2010–11 financial statements in the row 'Appropriations reduced (Appropriation Act sections 10, 11&12)'.

Note 23: Compensation and debt relief
5
Departmental
No Act of Grace payments, ex-gratia payment or waivers were recorded by the department during
the reporting period.
No payments were made under the Compensation for Detriment Caused by Defective
Administration (CDDA) Scheme.
Administered
No Act of Grace payments, ex-gratia payment or waivers were recorded by the department during
the reporting period.
No payments were made under the Compensation for Detriment Caused by Defective
Administration (CDDA) Scheme.

Note 24: Reporting of outcomes
5
Note 24A: Net cost of outcome delivery
Outcome 1 Total
2010 2009 2010 2009
$’000 $’000 $’000 $’000
Expenses
Administered 492,715 38,405 492,715 38,405
Departmental 141,565 87,090 141,565 87,090
Total 634,280 125,495 634,280 125,495
Income from non-government sector

Administered
Activities subject to cost recovery - - - -
Other - - - -
Total administered - - - -
Departmental
Activities subject to cost recovery - - - -
Other - - - -
Total departmental - - - -
Total - - - -
Other own-source income

Administered - - - -
Departmental
Other own-source income 8,661 1,463 8,661 1,463
Goods and services revenue from
related entities 975 910 975 910
Total 9,636 2,373 9,636 2,373
Net cost/(contribution) of outcome delivery 624,644 123,122 624,644 123,122

Outcome 1 is described in Note 1.1. Net costs shown include intra-government costs that are eliminated
in calculating the actual Budget Outcome.

Note 24: Reporting of outcomes (continued)
5
Note 24B: Major classes of departmental expense, income, assets and liabilities by outcomes
Outcome 1 Total
2010 2009 2010 2009
$’000 $’000 $’000 $’000
Departmental expenses:
Employees 67,407 40,623 67,407 40,623
Suppliers 67,667 42,169 67,667 42,169
Grants 940 1,991 940 1,991
Depreciation and amortisation 3,737 1,735 3,737 1,735
Other expenses 1,767 572 1,767 572
Finance costs 47 - 47 -
Total departmental expenses 141,565 87,090 141,565 87,090
Departmental income:
Revenue from government 121,958 79,459 121,958 79,459
Sale of goods and services 12,661 2,504 12,661 2,504
Total departmental income 134,619 81,963 134,619 81,963
Departmental assets
Cash and cash equivalents 791 731 791 731
Trade and other receivables 80,935 30,379 80,935 30,379
Accrued revenue 89 186 89 186
Land and buildings 4,885 1,588 4,885 1,588
Property, plant and equipment 7,255 3,268 7,255 3,268
Intangibles 10,045 8,996 10,045 8,996
Other non-financial assets 600 578 600 578
Total departmental assets 104,600 45,726 104,600 45,726
Departmental liabilities
Suppliers payables 15,590 10,385 15,590 10,385
Grants payable 104 1,980 104 1,980
Other payables 3,324 8,665 3,324 8,665
Employee provisions 22,107 11,559 22,107 11,559
Other provisions 2,841 169 2,841 169
Total departmental liabilities 43,966 32,758 43,967 32,758

Note 24: Reporting of outcomes (continued)
5
Note 24C: Major classes of administered expenses, income, assets and liabilities by outcomes
Outcome 1 Total
2010 2009 2010 2009
$’000 $’000 $’000 $’000
Administered revenue
Sale of goods and services - - - -
Other non-taxation revenue - - - -
Total administered revenue - - - -
Suppliers 64,948 16,543 64,948 16,543
Personal Benefits 6,255 - 6,255 -
Grants 274,540 21,862 274,540 21,862
Home Insulation Program provision expenses 146,972 - 146,972 -
Total administered expenses 492,715 38,405 492,715 38,405
Administered assets
Financial assets
Cash and cash equivalents 159 - 159 -
Receivables 6,929 9 6,929 9
Investment using equity method accounting 198 - 198 -
Non-financial assets 1,650 47 1,650 47
Total administered assets 8,936 56 1,936 56
Administered liabilities
Supplier payable 35,043 1,073 35,043 1,073
Grants payable 117,112 880 117,112 880
Home Insulation Program 146,972 - 146,972 -
Total administered liabilities 299,127 1,953 299,127 1,953

Section 6
Other statutory
reporting
Section 6: Other statutory reporting
Occupational health and safety 217
Freedom of information 218

Information about the department 218
Arrangements for public involvement 218
Types of documents available 218
Facilities and procedure for accessing documents 219
FOI access procedures and contacts 219
Applications received in 2009–10 220
Ecologically sustainable development 222

Departmental ESD initiatives 222
Grant programs 224
Corrections to the Department of Climate Change Annual Report
2008–09
224
Consultancies 224

Occupational health and safety
6
In light of the changes to the department following the machinery of government changes,
a review of the Health and Safety Management Arrangements was undertaken.
Under the arrangements, the reporting and committee framework continues to provide
strategic and operational oversight of occupational health and safety (OH&S) issues across
the department. With the increase in staffing numbers, the designated work groups and
health and safety representative numbers were reviewed.
Initiatives undertaken during the year included:
• arranging on‑site Employee Assistance Program services to assist staff dealing with
organisational change
• purchase and delivery of chairs to replace existing, ageing chairs
• flu vaccinations offered to all interested staff, with approximately 60 per cent
participating.
In 2009–10, eight workers compensation claims were lodged, five of which were accepted
by Comcare. No other significant incidents or injuries were reported. The Comcare
premium for the 2009–10 financial year was 0.87 per cent of payroll, reflecting the
department’s continuing strong health and safety performance. This is less than the overall
Australian Public Service average payment of 1.25 per cent of payroll.
As a result of the changes to the department, including a considerable increase in staffing
numbers and complexity, Comcare has advised that the premium to be applied to the
department for the coming financial year will increase.

6 Freedom of information
Section 8 of the Freedom of Information Act 1982 (the FOI Act) requires the department to

publish detailed information about:
• how the department is organised and what decision‑making powers it has
• what arrangements it makes for public involvement in its work
• what types of documents it holds
• how the public can obtain access to these documents.
Information about the department

Details of the department’s organisational and management structure are set out in
Section 2 of this report. The department’s functions and the decision‑making powers
exercised in carrying out those functions are described in Section 2: Portfolio and
departmental overview, and Section 4: Management and accountability. Other relevant
information about the department’s functions, organisation, operations and powers is
contained throughout this annual report and on the department’s website.
Arrangements for public involvement

The department consults members of the public and bodies outside the Australian
Government’s administration when developing policy and programs and administering
legislation and schemes. In addition to general public consultation, the department and the
Minister receive advice from scientific and expert committees and other bodies.
Types of documents available

The department holds a large number of records, including the following categories of
records:
• general policy—administrative files, policy papers, research papers, consultant’s
reports, memoranda of understanding, agreements, permits, licences, submissions,
manuals, staffing records, guidelines for programs, financial records, instructions to the
Secretary, legal documents and tender evaluations
• specific—committee records, court documents and records
• parliamentary—ministerial submissions, policy advice, ministerial correspondence,
briefing documents, Cabinet submissions and explanatory memoranda.

The department is required under section 9(2)(b) of the FOI Act to provide a statement
which provides to members of the public details of the documents used to make decisions
6
affecting the benefits or liabilities of individuals. This information is available on the
department’s website at http://www.climatechange.gov.au/about/foi.aspx.
Facilities and procedure for accessing documents

If a member of the public requests a document and the department approves access,
it will provide copies of documents after the applicant pays any appropriate charges.
Alternatively, applicants may arrange to inspect documents at 2 Constitution Avenue in
Canberra, between the hours of 9.00 am and 5.00 pm, Monday to Friday (except on public
and public service holidays).
FOI access procedures and contacts

The department handles all freedom of information requests in accordance with the
Freedom of Information Act 1982. Supplementary material, such as the FOI Guidelines,
published by the Department of the Prime Minister and Cabinet on its website, is used to
support the handling of FOI requests. Those guidelines are available at www.pmc.gov.au.
Procedures for gaining access to documents
Process until 31 October 2010

FOI applicants must:
• include in their application sufficient information concerning the document to enable
the agency to identify it
• specify an address in Australia to which notices can be sent
• send their application by post, email or delivery to the agency
• include with their application a $30 application fee, which may be waived in
certain circumstances.
The department accepts payment by cheque (made payable to the Collector of Public
Monies), money order or electronic funds transfer. If an applicant wishes to apply to have
the application fee waived, this application should accompany the request.
The FOI Act provides that further charges may be imposed for processing requests. The
department may grant or refuse requests for access to documents. In accordance with
section 54 of the FOI Act, an applicant may, within 30 days of receiving notification of a

decision under the FOI Act, apply for internal review of a decision to refuse a request. The
6 prescribed fee of $40 should accompany such an application.
Process from 1 November 2010

FOI applicants must:
• include in their application sufficient information concerning the document to enable
the agency to identify it
• specify that they are requesting information under the FOI Act
• specify the form in which they would like the information to be released
• send their application by post, email or delivery to the agency.
No application fee will be required for FOI requests made on or after 1 November 2010.
Contact for inquiries
The Administrative Law Section in the Legal Services Branch coordinates requests under
the FOI Act. Applicants seeking access to the department’s documents under the FOI Act
should apply in writing, stating which documents they seek to access, to:
The FOI Coordinator
Legal Services Branch
PO Box 854
CANBERRA ACT 2601
Email: FOI_Contact_Officer@climatechange.gov.au
Applications received in 2009–10

In 2009–10, the department received 23 requests under section 15 of the FOI Act,
13 transfers under section 16 of the FOI Act, 10 consultation requests under section
26A of the FOI Act and four internal review requests under section 54 of the FOI Act.
The department also processed two consultation requests made under the Freedom of
Information Act 1989 (NSW) and one consultation request made under the Right to
Information Act 2009 (Qld).

Section 311A of the Commonwealth Electoral Act 1918 requires certain matters to be
reported on annually by Australian Government departments and agencies, including the
Department of Climate Change and Energy Efficiency. Those matters include payments
made for the services of:
• advertising agencies—creative agencies that develop advertising campaigns
• market research organisations
• polling organisations
• direct mail organisations
• media advertising organisations—master advertising agencies that place government
advertising (including recruitment, non‑recruitment, campaign and non‑campaign
advertising) in the media.
During 2009–10, the Department of Climate Change and Energy Efficiency conducted the
following advertising campaigns:
• development of the Integrated Climate Change Advertising Campaign
• Climate Change Foundation Campaign.
Further information on those advertising campaigns is available at
www.climatechange.gov.au and in the reports on Australian Government advertising that
are prepared by the Department of Finance and Deregulation. Those reports are available
at http://www.finance.gov.au/advertising/index.html.
Table 9 details all payments of $11,200 or more (inclusive of GST) made by the department
to purchase such services in 2009–10.
Table 9 Commissions paid to advertising and market research agencies, 2009–10
Agency type Agency name Details Amount $
Advertising George To assist in the development of advertising for the 407,365

agency Patterson Y&R Integrated Climate Change Advertising Campaign
and the Climate Change Foundation Campaign
Market research Open Mind To research the Integrated Climate Change 507,966
organisation Research Advertising Campaign and the Climate Change
Foundation Campaign
Media advertising Adcorp Non-campaign advertising, including public, 357,461

organisation recruitment and tender notices

6 Ecologically sustainable development
The following summary is in accordance with section 516a of the Environment Protection
and Biodiversity Conservation Act 1999 (EPBC Act)
The department is committed to making a positive contribution to ecological sustainability.
The department works constantly to reduce its impact on the environment and aims to
operate incorporating the five ecologically sustainable development (ESD) principles:
• integration
• precautionary
• intergenerational
• biodiversity
• valuation.
The department’s Environmental Policy and Chief Executive Instruction 5.11—
Environmental Management, are evidence of the department’s commitment to ecologically
sustainable development.
The department administers numerous programs in accordance with ESD principles;
further information on the department’s programs is documented in previous chapters of
this report.
Departmental ESD initiatives

During 2009–10, the department has adopted the following environmental management
practices:
• reducing energy consumption; for example, by shutting down tenancy lighting
after hours
• complying with the National Packaging Covenant
• whenever possible, purchasing 100 per cent green power (under whole‑of‑government
energy supply arrangements)
• using environmentally friendly toner and inkjet cartridges and recycling the packing for
those products and, wherever possible, printing in black and white and double sided
• recycling two streams of waste—general and co‑mingled (the department is working
with its cleaning contractors on more effective recycling strategies)
• working with the building owner (who is responsible for the cost of water) to reduce
water use by reporting leaks and other water consumption problems
• participating in Global Earth Hour 2009 on 27 March 2010.

In 2009–10, electricity (tenant light and power) consumption per staff member averaged

7,108 megajoules, which is under the revised Australian Government target for energy use

6
of 7,500 megajoules per person per year.
As at 30 June 2010, the department maintained five hybrid vehicles in its car pool. All
of those vehicles are in the top 50 per cent of vehicles listed in the government’s Green
Vehicle Guide. The department will also lease an electric vehicle in 2010–11.
The department’s report against key performance indicators is integral to its approach
to sustainability. The report enables it to measure and benchmark its performance,
identify areas that it needs to focus on, opportunities for improvement, and ways in
which to manage risks, establish targets and tolerances and continuously improve its
environmental performance.
Table 10 summarises the environmental performance of the department’s operations
in 2009–10.
Table 10 Environmental performance, 2009–10
Indicator Performance
General In 2009–10, staff at 2 Constitution Avenue and 20 Allara Street consumed an

average of 7,108 megajoules of tenant light and power. The variability of staff
numbers in 2009–10 may affect the reliability of that result.
Environmental The department appointed an environmental services company to assist in the

management system development and implementation of environmental management protocols, which
include a department-specific EMS.
Energy (electricity) The department acquired 100% green energy wherever possible.
Transport The pool car fleet comprised five hybrid fuel-efficient vehicles.
Greenhouse gas The department continued to minimise its greenhouse gas emissions through the
emissions practices described in this section.
Waste (including Reliable data for waste recycling was not available. However, waste recycling
paper) facilities are available throughout the department’s properties.
Green procurement The department had two arrangements for supplying electricity, both of which
were 100% green power. The department’s other accounts, which are based
on different supply arrangements, will be transferred at the first opportunity to
100% Greenchoice.
Other The department’s paper for printers and photocopiers has a minimum of
80% recycled content.

6 Grant programs
Following the machinery of government changes announced on 8 March 2010 the
department acquired additional administered programs following the transfer of the
energy efficiency functions from the Department of the Environment, Water, Heritage and
the Arts.
Grants under these programs are payments made to particular applicants, either
organisations or individuals. Conditions may or may not be imposed in return for the grant.
Grants may be single ad hoc payments or grants renewed under continuing programs.
Information on grants awarded by the Department of Climate Change and

Energy Efficiency during the period 1 July 2009 to 30 June 2010 is available at
http://www.climatechange.gov.au/en/about/grants.aspx.
Corrections to the Department of Climate

Change Annual Report 2008–09
Consultancies
During 2008–09, 44 new consultancy contracts were entered into, involving total actual
expenditure of $3,282,383. These amounts include GST. This was incorrectly reported as
$9,923,668.30 in the former Department of Climate Change Annual Report 2008–09.
The table summarising the new consultancy contracts let in 2008–09
valued at $10,000 or more is published on the department’s website at
www.climatechange.gov.au/annualreport.

Table 11 Agency Resource Statement, 2009–10
Actual Payments Balance

appropriation made remaining
for 2009–10 2009–10 2009–10
$’000 $’000 $’000
(a) (b) (a – b)
Ordinary Annual Services1

Departmental appropriation
Prior year departmental appropriation 7,426 2,381 5,045
Departmental appropriation 121,958 112,042 9,916
Section 31 relevant agency receipts2 4,703 4,703 –
Total 134,087 119,126 14,961
Outcome 1 1,216,826 487,282
Total 1,216,826 487,282
Total ordinary annual services 1,350,913 606,408
Other services3
Specific payments to States, ACT, NT and
local government
Outcome 1 8,045 5,433
Total 8,045 5,433
Departmental non-operating
Equity injections 54,525 9,019 45,506
Previous years’ outputs 25,867 9,696 16,171
Total 80,392 18,715 61,677
Total other services 88,437 24,148
Total net resourcing for the Department of

Climate Change and Energy Efficiency 1,439,350 630,556
1 Appropriation Bill (No.1) 2009–10 and Appropriation Bill (No.3) 2009–10.

2 Appropriation receipts from other agencies credited to the department’s accounts.
3 Appropriation Bill (No.2) 2009–10 and Appropriation Bill (No.4) 2009–10.

Table 12 Expenses and resources for Outcome 1
6
Outcome 1: Reduction of Australia’s greenhouse
gas emissions, adaptation to the impacts of
climate change, and negotiation of an effective Actual
global solution, through the development Budget1 expenses Variation
and implementation of a national response 2009–10 2009–10 2009–10
to climate change; and bilateral, regional and $’000 $’000 $’000
multilateral engagement (a) (b) (a – b)
Program 1.1: Reducing Australia’s greenhouse

gas emissions
Ordinary Annual Services 85,462 80,807 4,655
Departmental expenses
Other services 25,487 4,310 21,177
Total for Program 1.1 186,097 156,962 29,135
Program 1.2: Improving Australia’s energy

efficiency
Ordinary Annual Services 6,000 19,285 -13,285
Other services – 1,185 -1,185

Other services 9,930 2,900 7,030

Table 12 Expenses and resources for Outcome 1 (continued)
6
Outcome 1: Reduction of Australia’s greenhouse
gas emissions, adaptation to the impacts of
climate change, and negotiation of an effective Actual
global solution, through the development Budget1 expenses Variation
and implementation of a national response 2009–10 2009–10 2009–10
to climate change; and bilateral, regional and $’000 $’000 $’000
multilateral engagement (a) (b) (a – b)
Program 1.4: Helping to shape a global climate

change solution
Ordinary Annual Services 3,000 2,868 132
Ordinary Annual Services 15,860 15,439 421
Other services 5,379 624 4,755
Total expenses for Outcome 1 887,772 643,300 244,472

Departmental 175,082 150,585 24,497
Administered 712,690 492,715 219,975
2008–09 2009–10
Average staffing level (number) 302 638
1 Full-year budget, including any subsequent adjustment made to the 2009–10 Budget.

6

Section 7
References
Section 7: References
Glossary and abbreviations 231
List of requirements
232
Subject index 236

Glossary and abbreviations
7
ACCRA Australian Climate Change Regulatory Authority
CBD Commercial Building Disclosure (CBD)
CCAF Climate Change Action Fund
COAG Council of Australian Governments
CPRS Carbon Pollution Reduction Scheme
CSAS Coal Sector Adjustment Scheme
CSIRO Commonwealth Scientific and Industrial Research Organisation
DEWHA the Department of the Environment, Water, Heritage and the Arts
EITE emissions‑intensive trade‑exposed. Industries that either are exporters or
compete against imports (trade‑exposed) and produce significant emissions
in their production of goods (emissions‑intensive).
ESAS Electricity Sector Adjustment Scheme
GEDO Greenhouse and Energy Data Officer
GEROD Greenhouse and Energy Reporting Office Division
HIP Home Insulation Program
HR human resources
ICT information and communication technology
IPCC Intergovernmental Panel on Climate Change
LRET Large‑scale renewable energy target
MEF Major Economies Forum
MEPS minimum energy performance standards
MRV measurement, reporting and verification
NCAT National Carbon Accounting Toolbox
NGER National Greenhouse and Energy Reporting
NGERS National Greenhouse and Energy Reporting System
NSEE COAG’s National Strategy for Energy Efficiency
OECD Organisation for Economic Cooperation and Development
OSCAR Online System for Comprehensive Activity Reporting
REDD reducing emissions from deforestation and forest degradation
REDD+ reducing emissions from deforestation and forest degradation in developing
countries
Requirements for Requirements for annual reports for departments, executive agencies and
annual reports FMA Act bodies, approved by the Joint Committee of Public Accounts and
Audit, June 2010
RET Renewable Energy Target
SRES Small‑scale Renewable Energy Scheme
UNFCCC United Nations Framework Convention on Climate Change

7 List of requirements
Requirement Location
General details
Letter of transmittal 3
Table of contents 5–6
Index 233
Glossary 231
Contact officer(s) 2
Internet home page address and Internet address for report 2, 7
Section 1: Secretary’s review
Review by departmental secretary 9–29
Summary of significant issues and developments 9–23
Overview of department’s performance and financial results 9–23
Outlook for following year 24–29
Significant issues and developments – portfolio 9–23
Section 2: Overview
Overview description of department 35–37
Role and functions 35–37
Organisational structure 44–49
Outcome and program structure 54
Where outcome and program structures differ from PBS/PAES or other 57
portfolio statements accompanying any other additional appropriation bills
(other portfolio statements), details of variation and reasons for change
Portfolio structure 34
Section 3: Report on performance
Review of performance during the year in relation to programs and 60–112
contribution to outcomes
Actual performance in relation to deliverables and KPIs set out in PBS/PAES 73–74, 90–92,
or other portfolio statements 98, 107–110
Performance of purchaser/ provider arrangements 139

Requirement Location 7
Where performance targets differ from the PBS/PAES, details of both former None
and new targets, and reasons for the change
Narrative discussion and analysis of performance 60–112
Trend information This is a new
department
and trend
information will
be available in
future years
Significant changes in nature of principal functions/services 11, 34, 57, 75
Factors, events or trends influencing departmental performance 60–112
Contribution of risk management in achieving objectives 119
Social justice and equity impacts 134, 135
Performance against service charter customer service standards, complaints Not applicable
data, and the department’s response to complaints
Discussion and analysis of the department’s financial performance 145–146
Discussion of any significant changes from the prior year or from budget None to report
Agency resource statement and summary resource tables by outcomes 225–227
Developments since the end of the financial year that have affected or may None to report
significantly affect the department’s operations or financial results in future
Section 4: Management and accountability
Corporate governance
Statement of the main corporate governance practices in place 115–120
Names of the senior executive and their responsibilities 48–52
Senior management committees and their roles 116–119
Corporate and operational planning and associated performance 119
reporting and review
Approach adopted to identifying areas of significant financial or 119
operational risk
Agency heads are required to certify that their agency comply with the 3
Commonwealth Fraud Control Guidelines.
Policy and practices on the establishment and maintenance of appropriate 37
ethical standards
How nature and amount of remuneration for SES officers is determined 132

7 Requirement Location
External scrutiny
Significant developments in external scrutiny 123–126
Judicial decisions and decisions of administrative tribunals 126
Reports by the Auditor-General, a Parliamentary Committee or the 123–124,
Commonwealth Ombudsman 125–126
Management of human resources
Assessment of effectiveness in managing and developing human 128–135
resources to achieve departmental objectives
Workforce planning, staff turnover and retention 128
Impact and features of enterprise or collective agreements, 128, 128,
determinations, common law contracts and AWAs 132–133
Training and development undertaken and its impact 129
Occupational health and safety performance 217
Productivity gains 129
Statistics on staffing 130–131, 227
Enterprise or collective agreements, determinations, common law 128, 128,
contracts and AWAs 132–133
Performance pay 132, 133
Assessment of effectiveness of assets management 138
Assessment of purchasing against core policies and principles 138–139
Consultants
Summary statement 140
Information on contracts and consultancies is available through 140
AusTender
Additional information in required proforma 140
Absence of provisions in contracts allowing access by the Auditor‑General 139
Contracts exempt from the AusTender 139
Report on performance in implementing the Commonwealth Disability 135
Strategy

Requirement Location 7
Section 5: Financial statements 143–214
Section 6: Other statutory reporting
Occupational health and safety (section 74 of the Occupational Health and 217
Safety Act 1991)
Freedom of information (subsection 8(1) of the Freedom of Information 218–220
Act 1982)
Advertising and market research (Section 311A of the Commonwealth 221
Electoral Act 1918) and statement on advertising campaigns
Ecologically sustainable development and environmental performance 222–223
(Section 516A of the Environment Protection and Biodiversity Conservation
Act 1999)
Other
Grant programs 224
Correction of material errors in previous annual report 224
List of requirements 232

7 Subject index
access and equity, 134
asset management, 138
ACCRA Establishment and CPRS auction of Australian emission units, 62, 73
Implementation Division, 46, 64
auction solution provider, 62
ACCRA Group, 39–40, 64
Audit Committee, 41, 117–18, 121, 122
ACCRA Transition Team

Audit Report No. 26 2009–10: Administration

award, 137
of Climate Change Programs (ANAO), 123
adaptation capacity, 94–5
Audit Report No. 27 2009–10: Coordination
Adaptation, Land and Communications
and Reporting of Australia’s Climate
Division, 44, 93
Change Measures (ANAO), 123–4
adaptation pillar, 35, 36
audits by Australian National Audit Office,
see also climate change, adaptation to;
123–4
Aurion Human Resource Management
adaptation policy, 99
Information System (HRMIS), 128
Adapting to climate change in Australia: an

AusAID, 22, 23, 105, 106
Australian Government position paper,

AusTender, 139
14, 21, 93, 98, 99

Australia–China Climate Change Ministerial
administered programs, 54–6
Dialogue, 106, 109
Administrative Appeals Tribunal
Australian and New Zealand Equipment Energy
application, 126
Efficiency (E3) Program, 82
Administrative Law Section (Legal Services
Australian Capital Territory
Branch)
energy efficiency information on residential
and freedom of information, 220
buildings, 85
advertising and market research, 221
Australian Carbon Trust Limited, 11, 17, 25, 34,
AECOM Australia Pty Ltd

45, 54, 71, 74
and Green Loans Program, 79

Australian Centre for Climate Change
agency resource statement, 225
Adaptation, 56
agriculture
Australian Climate Change Regulatory
exclusion of from CPRS, 16, 62
Authority (ACCRA), 46, 64–5, 73, 127
see also under climate change

deferral of, 11, 39, 42, 43, 65
Agriculture Work Program, 62
establishment blueprint, 43
Ahead of the Game: Blueprint for the

establishment strategy, 42
Reform of Australian Government

governance bodies, 43
Administration, 128
model, 42–3, 64
Allocations Team of ACCRA Establishment and Australian Climate Change Regulatory
CPRS Implementation Division—Business Authority Bill 2009, 64
Delivery Australian Climate Change Science Framework,
award, 137
95, 98
Annual Report 2008–09
Australian Climate Change Science Program,

corrections to, 224
56, 95–6, 98
appliances and equipment
Australian Community Climate and Earth-
and National Strategy for Energy Efficiency,
System Simulator, 95, 96
82–3
Australian National Audit Office
Archives Act 1983, 122
audit reports, 123–4
Asia Pacific Partnership on Clean Development Australian National Audit Office access clause,
and Climate, 101, 106
139
Asia–Pacific Economic Cooperation forum,
104, 108

Australian National Greenhouse Accounts China
National Greenhouse Gas Inventory— bilateral partnership on climate change with, 7
Accounting for the Kyoto Target, May 109
2010, 69
National Development and Reform
National Inventory by Economic Sector 2008,
Commission, 106
69
see also Australia–China Climate Change
see also National Inventory Report (under
Ministerial Dialogue
the UNFCCC) Clean Energy Council, 77
Australian National Registry of Emissions climate change
Units, 16, 61, 73
adaptation to, 14, 21–2, 27–8, 93–100
Australian Public Service Code of Conduct, 37
see also Program 1.3: Adapting to climate

Australian Public Service Values, 37
change
Australian Rainfall and Runoff and agriculture and forestry, 12, 62
revision of, 94–5 see also reducing emissions from

Australian Workplace Agreements (AWAs), deforestation and forest degradation
132, 133
(REDD); reducing emissions from
Australia–New Zealand Climate Change and
deforestation and forest degradation
Business Conference, 109
in developing countries (REDD+);
reforestation
Bamsey, Howard, 50–1
projections, 95
bilateral and regional cooperation, 105–7
and reefs, 96
Blacktown Solar City project, 86
understanding of, 95–6
Bowles, Martin, 52
see also global climate change solution
Building Code of Australia, 14

Climate Change 2009: Faster Change and
energy efficiency provisions, 84, 85
More Serious Risks (Professor Will
Building Energy Efficiency Disclosure Act Steffen), 97
2010, 14, 19, 26, 56, 84

Climate Change Action Fund (CCAF), 65
building framework
deferral of, 54, 65, 73
and National Strategy for Energy Efficiency, climate change adaptation capacity, 28
83
climate change mitigation policy, 24
Bureau of Meteorology
climate change mitigation programs, 11
and Australian Rainfall and Runoff, 94

Climate Change Risks to Australia’s Coast, 100
climate change science, 28
Carbon Neutral Program, 25

see also Australian Climate Change Science
Carbon Pollution Reduction Scheme (CPRS), Program; National Climate Change Science
16, 42, 46, 53, 61–3, 73
Framework
changes to, 16
Climate Change—Foundation Campaign, 54
deferral of, 11, 16, 38, 39–40, 44, 46, 54, 62,
Climate Futures report, 94
63, 73
Climate Strategy and Markets Division, 39
and emissions‑intensive trade‑exposed
Clinton Climate Initiative, 106
(EITE) assistance program, 17
Coal Sector Adjustment Scheme (CSAS), 62, 66
negotiated modifications to, 62, 63
coastal adaptation, 22, 97
redeployment of staff after deferral of, 128

Coastal Council, 98
Carbon Pollution Reduction Scheme Bill 2009,
coastal risk assessment, 14, 97, 100
64
collective agreement see Department of Climate
Cartagena Group, 29, 102, 104

Change Collective Agreement 2009–2011
Chief Information Officer, 127
Comcare
claims, 217
premium, 217
Comley, Blair, 51
Data Reporting and Registration Division, 46
7 Commercial Building Disclosure (CBD), 84
deforestation see reducing emissions from
commercial buildings
and National Strategy for Energy Efficiency,
(REDD)
84
Demand Driven Programs Division, 45
Commonwealth Authorities and Companies Department of Climate Change and Energy

Act 1997, 34
Efficiency
Commonwealth Disability Strategy, 135

departmental overview, 35–57
Commonwealth Electoral Act 1918, 221

financial statements, 143–214
Commonwealth Fraud Control Guidelines, 119
machinery of government changes, 11, 14, 34,

Commonwealth Heads of Government Meeting,
38
104, 108
major achievements, 16–19
Commonwealth Ombudsman
management and accountability, 114–41
investigations, 125–6 mission, 37
Commonwealth Procurement Guidelines, 138,

people, 37
140
see also human resources management
consultancies, 140
report on performance, 60–112
contact for inquiries
values, 37
freedom of information, 220

vision, 37
Copenhagen Accord, 14, 22, 23, 29, 102, 104,
Department of Climate Change Collective
107, 108, 111
Agreement 2009–2011, 132–3
Copenhagen Conference see under United departmental overview, 35–57
Nations Framework Convention on Disability Discrimination Act 1992, 135
Climate Change (UNFCCC)
Corporate and Governance Division, 47
East Asia Summit, 104, 108
corporate governance, 115–20
ecologically sustainable development (ESD),
corporate governance framework, 115–16
222–3
Corporate Plan, 119
initiatives, 222–3
corporate planning and reporting, 119
EITE Expert Advisory Committee, 65
Corporate Support Division, 46, 47, 128
Electricity Sector Adjustment Scheme (ESAS),

Corporate Support Division—Personnel
61, 62, 66, 73
Operations
emissions accounting and reporting, 18, 25
award, 137
Emissions Trading Division, 39, 44, 63
corporations emissions‑intensive trade‑exposed (EITE)

greenhouse gas emissions, energy activities assessment, 24, 39, 44, 63, 66
consumption and energy production data, emissions‑intensive trade‑exposed (EITE)

72, 74
assistance program, 12, 17, 61, 62, 65–6, 73
Corporations Amendment Regulations relating

Employee Assistance Program, 217
to emissions units as financial products, 61
energy consumption and production
Council of Australian Governments (COAG)
accurate measurement and reporting of, 12
Experts Group on Streamlining Greenhouse
see also greenhouse gas emissions and energy
and Energy Reporting, 68
consumption data
National Strategy for Energy Efficiency, 14,
energy efficiency, 19–21, 25–7
26, 38, 81–6, 89–90
see also Program 1.2: Improving Australia’s
Review of Specific RET Issues, 24, 70
energy efficiency
Courtney, Louise
Energy Efficiency in Government Operations,
award, 136
38
energy efficiency labelling, 82

Energy Efficiency Savings Pledge Fund Foil Insulation Safety Program, 20, 26, 55, 80
deferral of, 54, 71

forest degradation see reducing emissions
7
Energy Efficiency Trust, 17, 34, 54
from deforestation and forest degradation
Energy Efficient Homes Package
(REDD); reducing emissions from
Senate inquiry, 125
Energy Efficient Homes Package Solar Hot in developing countries (REDD+);
Water Rebate, 76
reforestation
Energy Rating Label, 82
forestry see under climate change
energy reporting see greenhouse and energy
Framework Convention see United Nations
reporting Framework Convention on Climate Change
EnergyAustralia consortium, 26
(UNFCCC)
Engaging our Pacific island neighbours on Fraud and Compliance Program, 20
climate change: Australia’s approach Fraud Control Plan, 119–20
(Pacific climate change policy document), fraud prevention and control, 119–20
23, 105, 107

freedom of information, 218–20
Engineers Australia
applications received, 220
and Australian Rainfall and Runoff, 94

arrangements for public involvement, 218
Environment Protection and Biodiversity

contact for inquiries, 220
Conservation Act 1999 (EPBC Act), 222

information about the department, 218
environmental performance, 223
procedures for gaining access to documents,
Equipment and Appliance Energy Efficiency
219–20
Program, 38
types of documents available, 218–19
equipment energy efficiency standards and Freedom of Information Act 1982 (FOI Act),
labelling legislation, 83
218, 219
Establishing the Eligibility of Activities under

Freedom of Information Act 1989 (NSW), 220
the Emissions-intensive Trade-exposed

fuel tax, 62
Assistance Program, 66
Evans, Jo Glenday, Skye
award, 136
award, 136
Executive Board, 117
global climate change solution, 22–3, 29
executive management, 50–2
see also Program 1.4: Helping to shape a

exempt contracts, 139
global climate change solution
Experts Group on Streamlining Greenhouse
global hydrological cycle, 95
and Energy Reporting (COAG), 68

global temperature rise
external scrutiny, 123–6 limitation on, 104, 111
Governance and Program Support Division,
Fair Work Act 2009, 132
46–7
fast‑start financing for mitigation and governance committee structure, 116
adaptation, 22–3 governance committees and their roles, 116–19
Faulkner, Patricia see Independent Inquiry graduate development program, 129–30
into the Green Loans Program (Patricia grant programs, 224
Faulkner) Green Building Council of Australia, 141
Fifth National Communication on Climate
Green Loans Program, 11, 13, 20, 45, 54–5,

Change to the UNFCCC, 74, 101, 107, 110
78–9, 92, 125
Finance and Investment Committee, 118
discontinuation of, 27, 79
Financial Management and Accountability Act

intelligence activities and/or investigations,

1997 (FMA Act), 34, 120, 121, 138
120
financial statements, 143–214
problems with, 12, 79
Senate inquiry, 125 Hawke, Dr Allan see Review of the

7 see also Independent Inquiry into the Green Administration of the Home Insulation
Loans Program (Patricia Faulkner) Program (Dr Allan Hawke)
Green Rewards Card, 78
Heating, Ventilation and Air Conditioning High

discontinuation of, 79
Efficiency Systems Strategy, 38
Green Star ratings, 141

Home Insulation Program (HIP), 11, 12, 20, 26,
Green Start program, 27, 45, 55, 79

45, 55, 80, 91, 125
Green Vehicle Guide, 223
closure of, 12, 53, 76, 80
Green Vouchers for Schools, 92
deaths of installers, 12, 20, 80
Greenhouse and Energy Auditor Registration

fraud and non‑compliance, 12, 20, 76, 81
System, 25

greenhouse and energy audits under NGER
120
Act, 66–8 Senate inquiry into Energy Efficient Homes

see also National Greenhouse and Energy
Package and, 125
Reporting System (NGERS)

see also Review of the Administration of

Greenhouse and Energy Data Officer (GEDO), the Home Insulation Program (Dr Allan
18, 45, 46, 66, 67
Hawke)
Greenhouse and Energy Minimum Standards,

26
(HIPRO), 12, 20, 45, 80–1
greenhouse and energy reporting, 17–18, 24–5 Home Insulation Safety Plan, 12, 20, 25–6,

see also National Greenhouse and Energy
80–1
Reporting System (NGERS)

Home Insulation Safety Program, 20, 26, 55,
Greenhouse and Energy Reporting Division, 80
45–6 household assistance, 62
Greenhouse and Energy Reporting (Auditor

Household Water Rebates Section of Demand

Registration) Instrument 2010, 18
Driven Programs—Solar Programs
Greenhouse and Energy Reporting Office
award, 137
Division (GEROD), 64
Human Capital Framework, 128
Greenhouse Friendly initiative, 17
Human Resources Branch, 128
greenhouse gas emissions human resources management, 128–37
accurate measurement and reporting of, 12
reduction of, 16–19, 24–5
Independent Inquiry into the Green Loans
see also Program 1.1: Reducing Australia’s
Program (Patricia Faulkner), 13, 41, 79,

greenhouse gas emissions 116, 124
greenhouse gas emissions and energy independent reviews, 124–5

consumption data see also Independent Inquiry into the Green
corporations registered under the NGER Act, Loans Program (Patricia Faulkner);
67, 74
Review of the Administration of the Home
greenhouse‑intensive water heaters Insulation Program (Dr Allan Hawke)
phasing out of, 83
India
Greening Australia
bilateral partnership on climate change with,
and Solar Homes and Communities Plan, 88
109
Group of Eight (G8), 101, 104

Indian Ocean surface temperatures, 96
Group of Twenty (G20), 29, 104, 108

Indonesia
Group on Earth Observations (GEO) Global
National Carbon Accounting System, 106, 110
Forest Monitoring Network, 105
and REDD+ activity, 23, 106, 109, 110, 112
Influencing International Climate Change

Policy, 56
information technology, 127

information technology network environment
Legal Services Branch see Administrative Law
review of, 121
Section (Legal Services Branch) 7
Insulation Industry Assistance Program, 20,
legislation, 56
26, 55, 81
LivingGreener Collaborative Community
Insulation Worker Adjustment Package, 26
(LGCC), 89
Intergovernmental Panel on Climate Change
LivingGreener online portal, 38, 89
(IPCC), 28, 95, 96–7
Local Adaptation Pathways Program, 95
internal audits, 121–2 Low Emissions Plan for Renters, 56, 91
International Carbon Action Partnership, 105
International Climate Change Adaptation McGee, Andrew

Initiative, 29, 101, 105, 106, 110
award, 137
international climate change policy and
McMorrow, Alison
analysis, 102
award, 137
International Division, 44
McMullan, Hon Bob
international engagement, 103–5
and UN Secretary‑General’s High‑level

International Forest Carbon Initiative, 101, 105,
Advisory Group on Climate Change

110, 112
Financing, 29, 102, 108
international pillar, 35, 36

Major Economies Forum (MEF) on Energy and
see also global climate change solution;
Climate, 29, 101, 104
Program 1.4: Helping to shape a global
management and accountability, 114–41
climate change solution
market research see advertising and market
Investigations and Intelligence Branch, 120
research
Minimum Energy Performance Standards, 14
judicial decisions, 126
minimum energy performance standards

(MEPS), 82
Kalimantan Forests and Climate Partnership, mission, 37
23, 106, 110, 112

mitigation pillar, 35, 36
Kinsella, Stuart see also greenhouse gas emissions, reduction

award, 136
of; Program 1.1: Reducing Australia’s
Knowledge Information and Technology greenhouse gas emissions; Program 1.2:
Committee, 118, 127
Kovacevic, Radi
award, 136
National Australian Built Environment Rating
KPMG
Systems (NABERS), 141
internal audit services, 121
National Authority for the Kyoto Protocol’s
Kyoto Protocol, 18, 44, 68, 69
Clean Development Mechanism and Joint
and CPRS, 16, 39, 42, 53, 63, 73
Implementation, 110
see also National Authority for the Kyoto
National Building Energy Standard-Setting,
Protocol’s Clean Development Mechanism
Assessment and Rating Framework, 83
and Joint Implementation; United Nations
National Carbon Accounting System, 39
Framework Convention on Climate Change
National Carbon Accounting Toolbox (NCAT),

(UNFCCC)
62, 63, 73
National Carbon Offset Standard, 12, 17, 25, 39,
Land Division, 39
45, 63
Large‑scale Renewable Energy Target (LRET),
National Carbon Offset Standard Carbon
16, 24, 70
Neutral Program, 17, 71
learning and development, 129
National Climate Change Adaptation Research

Learning and Development Committee, 129
Facility, 28, 94, 98
Leeper, Geoff, 51
National Climate Change Forum: Adaptation NGER Streamlining Protocol, 25, 68, 74
7 Priorities for Australia’s Coast, 14, 22, 97,

Nishi Building, 141
98, 100
National Climate Change Science Framework, occupational health and safety, 217
28
Occupational Health and Safety Act 1991, 118
National Coastal Risk Assessment, 14, 21

Occupational Health and Safety Committee,
National Energy Efficiency Initiative (Smart
118–19
Grid, Smart City), 19, 38, 55

ocean acidification, 96
Newcastle, 26, 55, 87
Office of the Renewable Energy Regulator, 34,

National Framework for Building Standard
40
Setting, Ratings and Assessment, 26

Outcome 1, 33
National Greenhouse Accounts, 39, 45
online portal—LivingGreener.gov.au, 38, 89

Online System for Comprehensive Activity

Act 2007 (NGER Act), 12, 17–18, 25, 39,
Reporting (OSCAR), 24, 67, 68
45, 56, 64, 66–8, 72
organisational structure, 44–9

Oslo Forest Climate Conference, 112
(Measurement) Determination 2008, 18

Outcome 1—Department, 33, 53, 54

expenses and resources, 226–7
(Audit) Determination 2009, 18, 68
Outcome 1—Office of the Renewable Energy
Regulator, 33
(NGER) measurement determination, outcome and program framework, 53–6

24–5 outcome and program reporting
changes to, 57
Regulations 2008, 18
outcome and program structure, 54

overview, 32–57
System (NGERS), 25, 42, 45, 66–8
and corporation emissions, 72, 74
Pacific Adaptation Strategy Assistance

National Greenhouse Energy Reporting Act
Program, 105–6, 110
2007
Pacific climate change policy document,

intelligence activities and/or investigations, Engaging our Pacific island neighbours on
120
climate change: Australia’s approach, 23,
National Greenhouse Gas Inventory 2008, 74

105, 107
National Infrastructure Climate Change
Pacific Climate Change Science Program, 106,

Adaptation Risk Assessment project, 98
110
National Inventory Report (under the Pacific Islands Forum, 23, 105, 108
UNFCCC), 18, 25, 68–9, 73
Papua New Guinea, 106
National Solar Schools Program, 20, 27, 45, 55,
Papua New Guinea–Australia Forest Carbon
77–8, 92
Partnership, 110
National Strategy for Energy Efficiency (NSEE)
Paris–Oslo process, 23, 108, 112
(COAG), 14, 26, 38, 81–6, 89–90
see also REDD+ Partnership agreement
Nationwide House Energy Rating Scheme, 85
Parkinson, Martin, 50
New Delhi Sustainable Development Summit,
parliamentary committee reports, 125
109
people, 37
New Zealand
see also human resources management
bilateral partnership on climate change with, People Committee, 118
109
performance see report on performance
see also Australia–New Zealand Climate
performance appraisal see remuneration and
Change and Business Conference
performance appraisal of Senior Executive
Newcastle
Service (SES) employees
and Smart Grid, Smart City initiative, 26, 55,
Performance Development Framework, 129
87
portfolio overview, 34

portfolio structure, 33 remuneration and employment conditions for
Prime Minister’s Task Group on Energy
non‑SES employees, 132–3 7
Efficiency, 19
remuneration and performance appraisal of
Procurement Plan, 139
Senior Executive Service (SES) employees,
Procurement Review Board, 138
132
Program 1.1: Reducing Australia’s greenhouse
Remuneration Committee, 132
gas emissions, 53, 54, 61–74
Renewable Energy Bonus Scheme—Solar Hot
administered programs, 54
Water Rebate, 19, 20, 27, 45, 56, 76
analysis of performance, 61–9
Renewable Energy Certificates, 77
performance report, 73–4
Renewable Energy (Electricity) Act 2000, 34,
Program 1.2: Improving Australia’s energy
39, 56, 64
efficiency, 53, 54, 75–92
Renewable Energy (Electricity) (Charge) Act
administered programs, 54–6
2000, 56, 64
renewable energy programs, 26
performance report, 90–2
Renewable Energy Regulator, 24
Program 1.3: Adapting to climate change, 53,
Renewable Energy Target (RET) scheme, 11, 12,

54, 93–100
24, 42

(EITE) activities assessment, 24, 39, 44,

performance report, 98
63, 66
Program 1.4: Helping to shape a global climate
change solution, 53, 54, 101–12
(EITE) assistance program, 17
expansion of, 16–17, 45, 70, 74
analysis of performance, 101–7 and Solar Credits mechanism, 21
performance report, 107–10 see also Large‑scale Renewable Energy Target

Program Management Committee, 118
(LRET); Small‑scale Renewable Energy
Program Management Office (ACCRA), 43
Scheme (SRES)
Public Service Act 1999, 34
Renewable Energy Team
purchaser–provider arrangements, 139
award, 137
purchasing and procurement, 138–9
Renewable Remote Power Generation Program,
38, 55, 89–90, 91, 92
reconciliation action plan (RAP), 135
closure of, 89
records management
Renewables and Energy Efficiency Division, 45
review of, 121–2
Renewables and Energy Efficiency Division

recruitment see workforce planning and
Divisional Support Unit
recruitment
award, 137
REDD+ Partnership agreement, 23, 104, 108,
report on performance, 60–112
112
residential buildings
see also Paris–Oslo process and National Strategy for Energy Efficiency,
reducing emissions from deforestation and 84–5
forest degradation (REDD), 23

resources statements, 225–7
reducing emissions from deforestation and
Review of Specific RET Issues (COAG), 24, 70
forest degradation in developing countries
Review of the Administration of the Home

(REDD+), 44, 104–5, 106, 111, 112
Insulation Program (Dr Allan Hawke), 13,
Indonesia, 23, 106, 109, 110, 112

41, 80, 116, 124
survey of financing and activities, 23, 108
Right to Information Act 2009 (Qld), 220
reforestation, 62
risk management, 119
regional cooperation see bilateral and regional

cooperation sea level rises, 14, 21–2, 96, 97, 100
Secretary’s review, 10–29
sectoral vulnerability Sumatra Forest Carbon Partnership, 23, 106,

7 reduction of, 97–8 110, 112
Senate Standing Committee on Environment, Summer School on Emission Trading for

Communications and the Arts Emerging and Developing Countries, 105,

inquiries into Energy Efficient Homes 110
Package and the Green Loans Program,
125
Technical Options Development Group, 62
Senior Executive Leadership Capability Technology Action Plan on Carbon Capture,

Framework (Australian Public Service Use and Storage, 104
Commission), 132
Thompson, Malcolm, 52
Senior Executive Service (SES) employees ‘three pillars’ of the Australian Government’s

remuneration and performance appraisal of, climate change policy, 35, 36
132
see also adaptation pillar; international pillar;

settlement solution provider, 62
mitigation pillar
Small‑scale Renewable Energy Scheme (SRES),
top management structure, 48–9
16, 24, 70
Townsville Queensland Solar City trials on

Smart Grid, Smart City initiative, 19, 38, 55
Magnetic Island, 86
Newcastle, 26, 55, 87
Transitional Electricity Cost Assistance

Solar Cities Program, 38, 55, 85–6, 92
Program, 62
Solar Credits scheme, 21, 77
trans‑Tasman Officials Group on
Solar Homes and Communities Plan, 21, 45, 55,
Harmonisation of Carbon Pollution
76–7, 88, 91, 92
Reduction Schemes, 110
closure of, 27, 55
Umbrella Group (UG) of countries of the

120
UNFCCC process, 103–4, 108
Solar Hot Water Rebate Program—Energy
United Nations Framework Convention on

Efficient Homes Package, 20, 76
Climate Change (UNFCCC), 23, 29, 44, 68,

102, 103–4, 107, 108
120
Australia’s Fifth National Communication on
Solar Hot Water Rebates, 91
Climate Change to, 74, 101, 107, 110
South Africa Conference, Copenhagen, December 2009, 14,
bilateral partnership on climate change with, 22, 101, 102, 111, 112
107, 109
Conference of Parties in Mexico at the end of
Spencer v Commonwealth of Australia, 126
2010, 29, 104
staff awards, 136–7
financial contributions to, 110
Staff Consultative Committee, 117
see also Kyoto Protocol
staffing information, 130–1
United Nations Secretary‑General’s High‑
stakeholder outreach program to build
level Advisory Group on Climate Change

stakeholders’ awareness of their
Financing, 29, 102, 108
obligations under the NGER legislation, 67
Stakeholder Support and Engagement Division, values, 37
46, 64
vision, 37
Steffen, Professor Will
Climate Change 2009: Faster Change and

workers compensation claims, 217
More Serious Risks, 97

see also Comcare
Sterland, Barry
workforce planning and recruitment, 128
award, 136
workplace diversity and disability strategy, 134
Strategic Communications and Public Affairs World Bank’s Forest Carbon Partnership

Committee, 119
Facility and Forest Investment Program,
Strategies and Coordination Division, 45
105, 110

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Department of Climate Change and Energy Efficiency

2009–10 Annual Report

© Commonwealth of Australia 2010

More information about this report

2 Department of Climate Change and Energy Efficiency 2009–10 Annual Report

Section 1: Secretary’s review 9

How we will report 57

Section 3: Report on performance 59

Section 4: Management and accountability 113

Internal audits 121

Asset management 138

Section 5: Financial statements 143

Section 6: Other statutory reporting 215

6 Department of Climate Change and Energy Efficiency 2009–10 Annual Report

Guide to the report

Other sources of information

Section 1: Secretary’s review

Major achievements in 2009–10 16

Outlook and priorities for 2010–11 24

10 Department of Climate Change and Energy Efficiency 2009–10 Annual Report

12 Department of Climate Change and Energy Efficiency 2009–10 Annual Report

14 Department of Climate Change and Energy Efficiency 2009–10 Annual Report

Enhanced Renewable Energy Target scheme

16 Department of Climate Change and Energy Efficiency 2009–10 Annual Report

EITE industry assistance program

National Carbon Offset Standard

Australian Carbon Trust

Greenhouse and energy reporting

The National Greenhouse and Energy Reporting Act 2007 (NGER Act) established a

Emissions accounting and reporting

Each year, the department prepares and submits Australia’s National Inventory Report

18 Department of Climate Change and Energy Efficiency 2009–10 Annual Report

Improving Australia’s energy efficiency

Green Loans Program

National Solar Schools Program

Renewable Energy Bonus Scheme—Solar Hot Water Rebate

20 Department of Climate Change and Energy Efficiency 2009–10 Annual Report

Adapting to climate change

National coastal adaptation forum

Helping to shape a global climate change solution

Australia’s fast‑start financing for mitigation and adaptation

22 Department of Climate Change and Energy Efficiency 2009–10 Annual Report

Reducing emissions from deforestation and forest degradation in

Engagement with Pacific island neighbours

Enhanced Renewable Energy Target scheme

Assess potential emissions‑intensive trade‑exposed activities

Greenhouse and energy reporting

24 Department of Climate Change and Energy Efficiency 2009–10 Annual Report

National Carbon Offset Standard

Emissions accounting and reporting

Improving Australia’s energy efficiency

National Strategy for Energy Efficiency

In 2010–11, the department will implement the Building Energy Efficiency Disclosure

National Energy Efficiency Initiative

26 Department of Climate Change and Energy Efficiency 2009–10 Annual Report

Adapting to climate change

Climate change science

28 Department of Climate Change and Energy Efficiency 2009–10 Annual Report

30 Department of Climate Change and Energy Efficiency 2009–10 Annual Report

How we will report 57

32 Department of Climate Change and Energy Efficiency 2009–10 Annual Report

Minister for Climate Change, Minister Assisting the Minister for

Department of Climate Change