Senator the Hon. Penny Wong
Minister for Climate Change, Energy Efficiency and Water
Government response to recommendations of the strategic review of Australian Government climate change programs
12 May 2009
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The Australian Government established the Strategic Review of Australian Government Climate Change Programs (‘the Wilkins Review’) in February 2008 to determine whether existing climate change programs are efficient, effective and complementary to the Carbon Pollution Reduction Scheme (CPRS) - so that climate change can be addressed at least cost to the economy.
The Australian Government’s response to the policy recommendations of the Wilkins Review is provided in Attachment 1.
The Wilkins Review considered 62 climate change programs and made recommendations with respect to whether or not they were complementary, transitional or non-complementary to the CPRS.
A summary of the Australian Government’s response to the climate change program-specific recommendations of the Wilkins Review is available in Attachment 2.
The Australian Government has rationalised the delivery of some existing climate change programs in response to the Wilkins Review, to ensure that programs are more effective in combating climate change.
The list of programs should be read in conjunction with the Wilkins Review Final Report which can be found on the Department of Finance and Deregulation website: www.finance.gov.au
The list at Attachment 2 consists of 58 programs. While the Wilkins Review analysed 62 programs in all, four programs (Cooperative Research Centre for Coal in Sustainable Development, National Average Fuel Consumption Target, Alternative Fuels Conversion Program, and Renewable Energy Commercialisation Program) had already ceased by conclusion of the Review in July 2008.
Attachment 1
Response to policy recommendations
| Recommendations from Wilkins Review | Government Response |
|---|---|
Recommendation 1 Principle 1: The Government should rely on the [CPRS] to achieve least cost abatement and only take action in addition to the scheme where there is a demonstrable and compelling case that the market is not working efficiently and that government action will not distort or undermine the scheme. Principle 2: The Government’s key role in adaptation should be to facilitate informed decision making across the economy. Principle 3: The Government should take into account the potential for its non-climate change policies to compromise or enhance the ability of the [CPRS] to achieve least cost abatement. Principle 4: The Commonwealth should be primarily responsible for mitigation policy and all jurisdictions should contribute to a nationally coordinated approach to adaptation. Principle 5: As in all areas of policy, climate change measures should conform to best practice policy design, including the need for an evidence-based assessment of options and rigorous evaluation. |
The Australian Government recognises the need to establish principles for complementary measures to guide climate change policy making. The Council of Australian Governments (COAG) Working Group on Climate Change and Water developed Principles of Complementarity to determine whether measures to reduce emissions complement the Carbon Pollution Reduction Scheme (CPRS). These principles are consistent with those developed by the Wilkins Review and were endorsed by COAG on 29 November 2008. The CPRS White Paper, released in December 2008, states that the COAG Complementarity Principles will be used to guide assessment of emission reduction measures. |
Recommendation 2.1 These findings and actions can be summarised as requiring the Government to:
|
With the planned introduction of the CPRS, there is an opportunity to streamline and better target Government policies and measures. The Government has considered the Wilkins Review recommendations on the 62 programs (of which 58 were active) assessed as a key input into a number of relevant policy review and development processes. These program recommendations were considered as part of the 2009-10 Budget process and details can be found in the Climate Change Ministerial Budget Statement. A summary of the Government’s decisions in this regard is provided in Attachment 2. |
Recommendation 2.2
|
The Wilkins Review proposed eight overarching programs, including four ongoing and four transitional programs which are consistent with the Government’s three policy pillars. The Government recognises the need for a more streamlined approach to climate change programs and the importance of program evaluation. |
Recommendation 2.3 |
The Government supports ongoing review of climate change policies and measures to ensure they remain relevant and effective. The CPRS White Paper, released in December 2008, states that the Complementarity Principles will be used to guide the assessment of emission reduction measures. The timing of reviews may differ between programs based on the individual requirements of each. |
Recommendation 3.1
|
Cooperative action on climate change is essential between governments to ensure that Australia meets its emission reduction targets at least cost. The COAG Working Group on Climate Change and Water was established to ensure an effective national response to climate change. It has to date:
Agreement was also reached to examine and resolve to build on the Energy Efficient Homes program and further improve the energy efficiency of residential and commercial buildings across Australia. |
Recommendation 3.2 |
The Department of Climate Change will continue as a coordinating and lead policy agency, with climate change programs and policy development delivered by appropriate line agencies. |
Recommendation 3.3 |
The Government is considering mechanisms to ensure that Cabinet is informed of the potential for policy proposals to impact on the CPRS. |
Recommendation 3.4 |
The Government supports the assessment of costs and benefits of new policy proposals, including the cost of abatement achieved. The Department of Climate Change is responsible for abatement estimates and is developing methods and guidelines for estimating abatement costs. |
Recommendation 3.5 |
COAG, through the Senior Officials Group on Energy Efficiency, is developing a National Strategy on Energy Efficiency that is expected to be finalised mid-2009. The States also agreed with the Commonwealth on 5 February 2009 that a key part of the COAG National Strategy on Energy Efficiency be a commitment from Commonwealth and State governments to improve the energy efficiency of their own operations. |
Recommendation 4.1
|
The Australian Government recognises the importance of community understanding of the CPRS and climate change more broadly. The Government has undertaken a range of public consultation on the CPRS Green and White Papers. The Government has established a $2.75 billion Climate Change Action Fund, which will commence in 2009-10. A key element of this fund will be the provision of information to a range of business and community organisations on the operation of the CPRS and how they can manage the expected financial impacts. |
Recommendation 4.2 |
The existing powers of the Australian Competition and Consumer Commission (ACCC) under theTrade Practices Act 1974 (TPA) will assist in ensuring that increases in prices following the introduction of the CPRS can be examined and dealt with appropriately. The ACCC has developed a guide, Carbon Claims and the Trade Practices Act, to inform businesses about their obligations under the TPA and to improve the accuracy of information provided to consumers about carbon-related claims. The Government is also preparing an offsets and carbon neutrality standard which is expected to be in place by mid-2009. |
Recommendation 4.3
|
New regulations of any kind should only be implemented where a robust cost benefit analysis demonstrates that the benefits would clearly outweigh the costs and the proposed changes adhere to the regulatory impact analysis (RIA) framework. Any new or change to an existing performance standard should adhere to the RIA framework. The Commonwealth in co-operation with the States and Territories has worked through COAG to make significant progress on developing a National Strategy on Energy Efficiency. COAG agreed at its 30 April 2009 meeting to five key measures to improve the energy efficiency of residential and commercial buildings across Australia. A suite of measures has been funded in the 2009–10 Budget that, subject to satisfactory RIAs, will help implement COAG’s commitments to increase energy efficiency requirements for new residential and commercial buildings, phase in mandatory disclosure of the energy efficiency of commercial and residential buildings at the time of sale or lease, as well as measures to enhance the development of minimum energy performance standards and energy star labelling for appliances and equipment. Potential measures related to vehicles will be considered in the development of policies and measures to encourage the adoption of cost effective energy efficiency opportunities. |
Recommendation 5.1
|
As stated above, the Government in co-operation with the States and Territories has worked through COAG to make significant progress on developing a National Strategy on Energy Efficiency. At its 5 February 2009 meeting COAG endorsed the Commonwealth’s Energy Efficient Homes program to modernise Australian homes, resulting, with the inclusion of the Commonwealth’s earlier commitment made under the Low Emissions Plan for Renters, in the installation of ceiling insulation in up to 2.9 million uninsulated homes. COAG agreed at its 30 April 2009 meeting to five key measures to improve the energy efficiency of residential and commercial buildings and to consider signing an Intergovernmental Agreement on energy efficiency at its next meeting. In relation to energy market reforms, please refer to the Government Response to Recommendation 7.1. |
Recommendation 5.2
|
The Energy Efficiency Opportunities Program is to continue as a transitional measure. The Government recognises the importance of assisting businesses – particularly small businesses – to adjust to the impact of the introduction of the CPRS. The Government has established the $2.75 billion Climate Change Action Fund (CCAF) to help business, industry and community organisations prepare for the impacts of a carbon price by providing information and capital grants to reduce energy use. This includes an Early Action Energy Efficiency Strategies for Business measure to drive knowledge and investment in energy efficiency opportunities. The Government will continue to look at enhancing policies and measures to encourage the adoption of cost effective energy efficiency opportunities in the industrial sector. |
Recommendation 5.3
However, it is important that any such measures would need to be subject to a rigorous cost-benefit analysis of the merits of different approaches and would be instead of, rather than in addition to, existing programs. |
These issues are being addressed through the development of the CCAF and CPRS Household Assistance Measures. The Government has a range of measures to improve energy efficiency and energy performance throughout the community including; |
Recommendation 6.1 |
The Government’s $4.5 billion Clean Energy Initiative will help give investors the confidence they require to back low-emissions technologies and industries to assist Australia’s transition to a lower emissions path. Through this initiative the Government will: invest $1.5 billion in large-scale solar power generation projects under the Solar Flagships Program; provide $465 million for a new body, Renewables Australia, to support research, development, and commercialisation of leading edge renewable energy technologies; and invest $2 billion in industrial-scale carbon capture and storage projects under the Carbon Capture and Storage (CCS) Flagships program; |
Recommendation 6.2 |
The Government recognises the importance of low emissions technology in moving Australia to a low carbon future and is putting in place a Clean Energy Initiative that will help give investors the confidence they require to back low emissions technologies and industries to assist Australia’s transition to a lower emissions path (see response to Recommendation 6.1) The Government will support the establishment of the Australian Carbon Trust, which will incorporate: |
Recommendation 6.3
|
The Government has enacted the world’s most comprehensive carbon capture and storage legislation – the Offshore Petroleum and Greenhouse Gas Storage Act. Through the provision of access and property rights for greenhouse gas injection and storage activities in Commonwealth offshore waters, the legislation provides a management system for ensuring that storage is safe and secure, while balancing the rights of this new industry with the petroleum industry in a manner that encourages investment in both industries. |
Recommendation 6.4 |
On 16 April 2009 the Government launched the Global Carbon Capture and Storage Institute (GCCSI) to drive the rapid international deployment of commercial scale carbon capture and storage projects. |
Recommendation 7.1
|
The Ministerial Council on Energy (MCE) is already considering a number of these matters. Those not already being addressed by MCE will be referred to the MCE for timely consideration. |
Recommendation 7.2 |
The Government supports the development of a vibrant renewable energy industry. Current commitments and industry support needs will be taken into account in ensuring appropriate and effective Government policies and measures. Rebates under the Solar Homes and Communities Plan will be phased out with the proposed introduction of Solar Credits under the expanded national Renewable Energy Target. |
Recommendation 8.1 |
The Government recognises the importance of continuing to pursue reforms that enhance productivity (including those that improve the efficiency of energy, transport and water markets) and remove impediments that undermine the CPRS. |
Recommendation 8.2
|
Under its terms of reference, Australia’s Future Tax System Review (the Henry Review) will examine and make recommendations to create a tax structure that will position Australia to deal with, among other things, the environmental challenges of the 21st century. The terms of reference also ask the Review to consider the interrelationship between the tax and transfer payments systems and the CPRS. The Review released a consultation paper at the end of 2008 and will provide the Treasurer its final report by the end of 2009. |
Recommendation 8.3
|
The Government will refer this recommendation to the Australian Transport Council (ATC) noting that the ATC continues to pursue COAG's road reform plan. |
Recommendation 8.4
|
Agriculture is important in the national emissions profile and the Government recognises the need to ensure that the agriculture sector has the necessary tools and capacity to contribute to meeting Australia’s emission targets. In the CPRS White Paper the Government announced its disposition to include agriculture emissions in the Scheme by 2015. The Government has commenced a work program, in consultation with the agriculture industry, to enable a final decision to be taken in 2013, on whether agriculture emissions will be covered from 2015 or whether alternative measures should be applied. To assist decision making around new sectors entering the CPRS in the coming years, the Government will develop the National Carbon Accounting Toolbox (NCAT). NCAT will be a cost-effective, nationally consistent emissions estimation tool for forestry and agriculture. In addition, the Australian Government’s Climate Change Research Program, funded under the Australia’s Farming Future program, has committed $46.2 million to help the agriculture sector to develop commercial solutions to manage emissions and adapt to climate change. Rural assistance has been reviewed by the Productivity Commission as part of its inquiry into drought support arrangements, in the context of a changing climate. The Commission’s Final Drought Review Report was provided to the Australian Government in February 2009. |
Recommendation 8.5 |
COAG agreed at its 30 April 2009 meeting to reforms to improve the energy efficiency of residential and commercial buildings. COAG also agreed to reform current processes to achieve consistency in the application of building energy efficiency standards across all States. The National Strategy on Energy Efficiency is expected to be finalised by COAG in mid-2009. Measures have been introduced in the 2009–10 Budget that support the COAG agreement to increase the energy efficiency requirements for new residential and commercial buildings, subject to satisfactory RIAs. |
Recommendation 8.6 |
The COAG Working Group on Climate Change and Water is working towards a nationally consistent set of climate change policies and measures that complement the CPRS. This recommendation will be considered in that process. |
Recommendation 9.1 |
The Australian Climate Change Science Program is building our scientific understanding of climate change in our region, and contributing to international understanding of climate drivers of the Southern Hemisphere. The program will help meet increasing demands from decision makers for greater insights into the impacts of climate change and the effort needed both to reduce emissions and adapt to unavoidable climate change impacts. The Government has adopted a new Australian Climate Change Science Framework which sets national climate change science priorities for the next decade; identifies the science capabilities, human capital and infrastructure investment needed to deliver on these priorities; and sets out ways to harness our full science capacity to address those priorities. A high-level coordination group, chaired by Australia’s Chief Scientist, will develop an implementation plan to ensure that all organisations with a significant climate change research capacity are contributing to this nationally coordinated effort to meet Australia’s priority climate change science information needs. |
Recommendation 9.2
|
The COAG Working Group on Climate Change and Water is developing a policy framework to inform a nationally coordinated approach to adaptation. |
Recommendation 10.1 |
The initiatives to transform Australia to a low-carbon economy are central to our contribution to global efforts to avert dangerous climate change. Australia is not acting alone. Australia is working to settle a framework for global action on climate change to take effect once the first commitment period under the Kyoto Protocol expires in 2012. The Government’s efforts will be supported through the ‘Shaping an International Solution to Climate Change’ measure, funded through the 2009-10 Budget. |
Attachment 2
Response to program recommendations
Programs agreed as complementary1 to the CPRS and to continue (15)
| Program | Additional Comment |
|---|---|
Action on Energy Efficiency |
Superseded by the National Strategy on Energy Efficiency measures included in the 2009-10 Budget. |
Asia Pacific Partnership on Clean Development and Climate (APP) |
- |
Climate Change Adaptation Program (previously the Australian Centre for Climate Change Adaptation) |
- |
Climate Change Research Program |
- |
Energy Efficiency of Electrical Appliances |
Superseded by the Expansion of Minimum Performance Standards for Appliances and Equipment and Enhanced Energy Efficiency Labelling measures. These measures will invest $16.6 million over four years to significantly expand the current minimum energy performance standards. |
Green Vehicle Guide |
- |
Hot Water System Phase Out |
Superseded by the National Strategy on Energy Efficiency measures included in the 2009-10 Budget. |
International Adaptation to Climate Change Initiative |
- |
International Forest Carbon Initiative |
- |
Low Emissions Plan for Renters – Insulation Rebate |
Superseded by the Energy Efficient Homes package which will provide ceiling insulation for up to 2.9 million Australian homes. |
National Solar Schools Plan |
Program focus has been modified in line with the Wilkins Review recommendation. |
One Stop Green Shop |
- |
Phase out inefficient light globes |
Superseded by the National Strategy on Energy Efficiency measures included in the 2009-10 Budget. |
Renewable Energy Target (RET) – funding for Office of the Renewable Energy Regulator |
- |
Solar Hot Water Rebates |
Energy Efficient Homes Package increased rebate from $1,000 to $1,600 per home. |
1 The Government considers these programs are transitional also as they will assist in Australia’s transition towards a low emissions economy over the medium term.
Programs agreed as complementary and to continue as Government core business (7)
| Program | Additional Comment |
|---|---|
Carbon Dioxide Capture and Geological Storage – Offshore Regulatory Framework |
Legislation was agreed in November 2008. Funding has been fully expended and ongoing work is being delivered as core business. |
Climate Change Science Program |
The Departmental element of these programs will continue as Government core business. Administration funding arrangements for these programs will continue unchanged. |
Emissions Measurement and Analysis |
- |
Geothermal and Hydrogen Technology Roadmaps |
Roadmaps were launched in 2008 and funding fully expended. The policy objectives are now core business of the Government. |
International Climate Change Strategy (Influencing International Climate Change) |
The Departmental element of these programs will continue as Government core business. Administration funding arrangements for these programs will continue unchanged. |
National Greenhouse and Energy Reporting Scheme |
- |
Strategic National Response |
- |
Programs agreed as transitional to the CPRS and to continue (14)
| Program | Additional Comment |
|---|---|
Carbon Sink Forests |
The tax deductibility arrangements for carbon sink establishment costs to revert to less accelerated write off arrangements from 2011–12 as reflected in existing tax legislation. |
Clean Business Australia – Climate Ready |
- |
Clean Business Australia - Green Building Fund |
Program objectives have been modified in line with Wilkins Review recommendation. |
Clean Business Australia - Retooling for Climate Change |
- |
Clean Energy Innovation Centre |
Continue as planned and be reviewed as part of the evaluation of Enterprise Connect in 2009–10. |
Energy Efficiency Opportunities |
This program will continue to 2012 with the verification and data analysis elements of this measure to be enhanced. |
Energy Innovation Fund |
- |
Green Loans |
This program has been refocussed and the number of subsidised low-interest loans has been reduced from 200,000 to 75,000 over five years |
Green Precincts |
- |
National Clean Coal Fund (renamed the National Low Emissions Coal Fund) |
- |
Renewable Energy Fund |
Subsumed within Renewables Australia and the Solar Flagships Program under the Clean Energy Initiative. |
Renewable Remote Power Generation Program |
Program objectives have been modified in line with Wilkins Review recommendation. |
Solar Cities |
- |
Solar Homes and Communities Plan (formerly known as the Photovoltaic Rebate Programme) |
Program to terminate on commencement of expanded RET legislation and the introduction of ‘Solar Credits’ for small generation units. |
Programs referred to other processes (9)
| Program | Relevant Process |
|---|---|
ARC Centre of Excellence for Advanced Silicon Photovoltaics and Photonics |
The Review of Australia's National Innovation System |
Australian Research Council (ARC) Centre of Excellence for Solar Energy Systems |
The Review of Australia's National Innovation System |
Climate Change Adaptation Partnerships Program |
The National Review of Drought Policy |
Climate Change Adjustment Program |
The National Review of Drought Policy |
Cooperative Research Centre for Greenhouse Gas Technologies |
The Review of Australia's National Innovation System |
CSIRO Climate Adaptation Flagship |
The Review of Australia's National Innovation System |
CSIRO Energy Transformed National Research Flagship |
The Review of Australia's National Innovation System |
Green Car Innovation Fund |
The Review of Australia’s Automotive Industry |
Managing Climate Variability |
The National Review of Drought Policy and no longer designated as a climate change measure |
Programs to cease (13)
| Program | Additional Comment |
|---|---|
Advanced Electricity Storage Technologies |
To cease June 2010. Program now closed and funding fully committed. All contractual obligations to be honoured. Superseded by other renewable energy support programs. |
Coal Mine Methane Reduction |
To cease June 2009. All contractual obligations to be honoured. |
Greenhouse Action in Regional Australia |
To cease June 2009. Superseded by the Climate Change Adaptation program. |
Greenhouse Challenge Plus (including Generator Efficiency Standards and Greenhouse Friendly) |
To cease June 2009. Key business, local government and community engagement elements of the program are being incorporated into the Climate Change Action Fund (CCAF). The Greenhouse Friendly program in its current form will cease in 2010. New arrangements to support the offset market and carbon neutrality will be developed as part of the national carbon offset standard. |
Greenhouse Gas Abatement Program |
To cease June 2009. All contractual obligations to be honoured. |
Local Greenhouse Action |
To cease June 2009. Key business, local government and community engagement elements of the program are being incorporated into CCAF. |
Low Emissions Technology and Abatement |
To cease June 2009. |
Low Emissions Technology Demonstration Fund |
To cease June 2015. Program now closed and funding fully committed. All contractual obligations to be honoured. |
National Climate Change Adaptation Program |
To cease June 2009. Superseded by the Climate Change Adaptation program. |
Renewable Energy Development Initiative |
To cease June 2011. Program now closed and funding fully committed. All contractual obligations to be honoured. |
Renewable Energy Equity Fund |
To cease June 2010. Program now closed and funding fully committed. All contractual obligations to be honoured. |
Small Business and Household Action Initiative |
To cease June 2009. Objectives met through the energy efficiency measures included in the 2009-10 Budget and other programs. |
Wind Energy Forecasting Capability |
To cease June 2009 as planned. |

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